In a few ideas for profit from Moneycontrol Pro, Nandish Shah of Moneycontrol.com spoke about a stock he is tracking closely–IFGL Refractories.

IFGL is into manufacturing specialised refractories used by the iron and the steel industry. December quarter numbers were sub-par on the higher raw material cost.

Shah expects volume growth from existing and new customers backed by growth in steel demand. India will likely witness an incremental steel production capacity of 25-30 million tonnes in 2-3 years.

Higher raw material prices are passed on to the customers through price hikes, which help maintain and increase margins.

According to Shah, the new capacity addition at Vizag is superior in cost structure compared to the older plants. The new plant is modelled and efficient and closer to the port location, ensuring savings on freight costs.

Based on the FY23 projection, IFGL is trading at PE multiples of 11 times. So, according to Shah, investors can accumulate this stock on decline.

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First Published:Apr 29, 2022 11:23 AM IST