Buy Vardhman Special Steel; target of Rs 300: ICICI Direct

ICICI Direct is bullish on Vardhman Special Steel has recommended buy rating on the stock with a target price of Rs 300 in its research report dated July 02, 2021.

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// else // $ (‘#toptitleTXT’).html(tickTxt+typevar+’already exists in your watchlist’); // //} } //$ (‘.accdiv’).html(”); //$ (‘.accdiv’).html(appndStr); } }, //complete:function(d){ // if(typparam1==1) // { // watchlist_popup(‘open’); // } //} }); }); } else { var disNam =’stock’; if($ (‘#impact_option’).html()==’STOCKS’) disNam =’stock’; if($ (‘#impact_option’).html()==’MUTUAL FUNDS’) disNam =’mutual fund’; if($ (‘#impact_option’).html()==’COMMODITIES’) disNam =’commodity’; alert(‘Please select at least one ‘+disNam); } } else { AFTERLOGINCALLBACK = ‘overlayPopup(‘+e+’, ‘+t+’, ‘+n+’)’; commonPopRHS(); /*work_div = 1; typparam = t; typparam1 = n; check_login_pop(1)*/ } } function pcSavePort(param,call_pg,dispId) { var adtxt=”; if(readCookie(‘nnmc’)){ if(call_pg == “2”) { pass_sec = 2; } else { pass_sec = 1; } var url = ‘//www.moneycontrol.com/mccode/common/saveWatchlist.php’; $ .ajax({url:url, type:”POST”, //data:{q_f:3,wSec:1,dispid:$ (‘input[name=sc_dispid_port]’).val()}, data:{q_f:3,wSec:pass_sec,dispid:dispId}, dataType:”json”, success:function(d) { //var accStr= ”; 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ICICI Direct’s research report on Vardhman Special Steel

Vardhman Special Steel (VSSL) has recently been granted the environmental clearance (EC) for expansion of capacity at its existing plant in Ludhiana, to up to 280000 tonnes per annum of rolled production. The company applied for the said approval in CY19. With this approval, the path for enhancement of capacity has been cleared. To begin with, the current rolling capacity of 200000 tonnes per annum would be increased to 250000 tonnes per annum. Total capex for the plan is expected to be ~Rs 250 crore.

Outlook

We value the stock at 7.5x FY23E EV/EBITDA and arrive at a target price of Rs 300 (earlier Rs 240). We maintaining BUY recommendation on the stock.

For all recommendations report, click here

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