MOMENTUM PICK

JBF IND

CMP Rs 97.5

• Company has largest capacity of Textile grade PET chips [4.32Lakh MTs]. It also manufactures Bottle grade PET chips, POY [1 Lakh MTs], FDY [25,000 MTs] and Speciality yarns [25,000 MTs] etc.
• Its subsidiary JBF RRK LLC, in UAE is in tax free zone and manufactures PET Grade Chips [1.5 Lakh MTs] and BOPET Films [75,000 MTs].
• All the products are high margin products, with stable crude prices and improved demand, the outlook for current year is quite robust, as can be seen from Q-1 results.
• Company is expanding capacity of FDY further by 72,000 MTs, at Silvassa at a cost of Rs 210 Crs.
• Company in a prudent move bought back own FCCBs worth $ 14.3 mill [out of 21.3 mill.] at 32.3% discount, last year.
• Consolidated sales and profits of the company are quite robust for even March'09. The current year working appears to be excellent.
• Promoters have increased the holding in latest quarter.
• Valuations of the company appear quite attractive with Market cap at just 2.4 times of cash profits of last year and 2 times of expected cash profits. PE is just 3.2X historically and 2.5 X for expected consolidated EPS of Rs 40/-.
• Look for the Target price of 150/-.