Growth stocks: Rohit Ferro Tech

Ferro-Alloys maker Rohit Ferro Tech is currently trading at attractive forward valuations. Recent correction in the stock price provides sound investment opportunity for long term investors. Due to unexpected shortage in South Africa, Ferro Alloys prices are booming in the international market. Recent ban on iron ore exports is added advantage.

Rohit Ferro Tech stock price analysis:



CMP: 110.8

P/E: 4.7

1 Year high-low: 194-34

Rohit Ferro Tech share target price:



1 year bear market target: 170-180.

1 year bull market target price: 200-220. (If global Ferro alloys prices sustain)

2 year target: It is trading at forward P/E of 2.3 of FY2010 earnings. Just imagine the opportunity in this stock for long term investors.



Why Rohit Ferro tech is a good long term story?



1. Ferro Alloys is the current great story in commodity markets due to strong demand from steel industry.

2. RFTL acquired a 60% economic interest in two operational coal mines in Indonesia- backward integration.

3. 530% increase in net profit and 230% rise in net sales in the March quarter.

4. Company is on massive expansion plans which augur well for long term growth.

5. Ban on Iron ore exports is good for Ferro Alloys industry.

6. Despite slowdown in economy, steel industry still grows at reasonable pace which is good for Ferro Alloys makers.

7. Valuations are looking reasonable and attractive on forward basis.



Verdict: Rohit Ferro tech is expected to announce very good results in the June quarter. According to analysts, company is expected to report more than 300% growth in net profit in this quarter. This small cap Company is expected to improve EPS in FY2008-09 due to strong growth prospects in Ferro Alloys space. I recommend “Buy” and accumulate more on further fall without hesitation.



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