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"Balasore Alloys (BAL) has a captive chrome ore mine in Sukinda Valley in Orissa which is about 170 kms from its plant. The mine takes care of the chrome ore requirements of BAL. BAL has been allotted manganese ore mines at Balaghat district of Madhya Pradesh. The produce from mines of Balaghat sector is coveted for its low Phos and Low Fe content. Commercial operation in the said mines has commenced."
"During Q3FY14, net profit has gone up by 786 percent to Rs 11.5 crore on 15.5 percent higher sales of Rs 187.2 crore. OPM & NPM stands at 13.7 percent and 6.1 percent against 8.4 percent and 0.8 percent in Q3FY13. Q3FY14 EPS stands at Rs 1.8. During 9MFY14, net profit has moved up 55 percent to Rs 33.9 crore on 14 percent increased sales of Rs 587.7 crore. OPM & NPM stands at 19.4 percent and 5.8 percent against 14.2 percent and 4.3 percent in 9MFY13. 9MFY14 EPS is Rs 5.3."
"With the steel scenario globally and domestically improving, the ferro alloy industry estimates that the consumption of ferro alloys will increase in the coming years. The Indian Ferro alloy industry is geared up to meet both the domestic requirement of steel industry and maintain a high growth in exports."
"BAL has acquired land, coal linkage and other requisite statutory clearances for setting up of captive power plant. However, the project being very capital intensive, efforts are on to explore the strategic partner for securing financial tie-up. BAL is one of the very few Ferro Alloys manufacturing companies in the country having captive mines and this is a major competitive advantage since availability of chrome ore is very uncertain and the price is also exorbitant. At the CMP of Rs 12, the share is trading at a P/E of 1.6x on FY14E and 1.4x on FY15E. We recommend BUY with a target price of Rs 17 in the medium term", says Sunidhi Securities research report.