RECOMMENDED DATE:24.05.

2010
VOLUME NO: 3/2010
ISSUE NO:41.

www.niftyiews.com
STOCK REPORT- A VIRGIN
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STEEL STOCK.
add logo, photo, COMPANY.UNTRACKED AND
or other image
here. UNKNOWN.
AML STEEL LIMITED (FORMERLY ASHOK MAGNETICS LTD)

• STEEL OPERATIONS IN INDIA AND SRILANKA.

• GREENFEILD EXPANSION IN JHARKHAND

OPERATIONAL.

• 384 ACRES OF IRON ORE MINES AWAITING FOREST

DEPT APPROVAL IN JHARKHAND.(SARAIKELA DISTRICT)

• IRON ORE LEASE APPROVED BY GOVT OF INDIA FOR

20 YEARS FOR 40 MT.
KEY STATS:-
• Code : • IT IS TRADING AT A DISCOUNT TO ITS REPLACEMENT
AMLSTEEL VALUE AT DISCOUNT WITH MOST SECOND RUNG STEEL
STOCKS IN CENTRAL INDIA.
• Market cap : 285mln
• FY09 BV : 76.48
• Total Debt :2402 mln
• CMP :38

TEAM
STOCKRESEARCHERS
Pvt. Ltd.
3 SUBHASHNAGAR CORNER,RAIYA ROAD,
RAJKOT, Gujarat, 360007
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CONTACT:09327744250
HEADLINE
AML Steel Limited is the flagship company of
the group, which was established during 1993 to
set up a plant to manufacture video and audio
cassettes, which was considered to be one of the
largest plants for such products in the whole of
South India. Later, it was decided to diversify
into steel making and therefore it was
conceptualized to set up a steel plant in
Pondicherry near Chennai.
As an offshoot of the plan, first project to
manufacture steel ingots out of scrap iron was
commissioned near Pondicherry where
abundant and uninterrupted power supply is
available.
In order to enrich presence in the steel sector,
AML Steel Ltd., during the year 2003 made
some overseas acquisitions by name Ashok
Steel Industries Sri Lanka. Around the same
time another acquisition too was made near
Pondicherry under the name of Ankit Ispat Pvt
Ltd., All the above companies have been fully
turned around and started generating good cash
returns.
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In order to further enhance it's knowledge and
presence in steel sector AML Steel Ltd., has set
up a company called AML Steel & Power Ltd.,
by which as per the MOU signed with State of
Jharkhand, Ministry of Mines, Government of
India has allocated 384 acres of Iron ore mines
with the deposit of about 40 million metric
tonnes on a 20 year lease vide their letter dated
16th August 2005 and negotiations are on for
further allotment of mines upto 150 million
metric tonnes. As of now the company has not
made significant progress in the
operationalization of the mine.The company has
280000 tpa of coal linkage with CCL.
The Company recently got relisted in NSE as
the company was earlier listed in Madras Stock
exchange as part of the recent MOU between
the two exchanges.
 HIDDEN VALUE
The company posts standalone results to NSE
which does not reflect upon the current state of
financials of the company.
Delete box, or
add a logo, photo, For example while the standalone results show
or other image
the quartelrly sales of 257 millions with a
here.
negative PAT of 1.60 mlns. This does not reflect
the state of financials of the company.

The company can benefit tremendously from
the current bull run in steel peices.Kindly note
that the company uses sponge iron in its
integrated steel plant in Saraikela and thus gets
insulated from volatile coking coal prices.
The company will be a multibagger only when
the iron ore mine gets operational. Since we
don’t have complete financial details of the
company at this stage for FY2010. We initiate
coverage on the stock with an ACCUMULATE
rating on the stock and target price of 75 (FY09
BV) ,Important disclosure enclosed.
Last year while the standalone sales was 899
millions consolidated sales was 2933 millions
The company also owns 73000 shares in Polaris
Ltd. Worth approx 1.6 crs or 2 rs per share.
Way back in 2006 company had filed a DRHP
with SEBI for raising as much as 120 crs via a
FPO.Promoter contribution to the same was 20
crs and fresh issue to public was 100 crs.
Due to poor market sentiment the company did
not went via the equity route and took the debt
funding instead for its greenfeild expansion.

The company SriLankan based subsidiary

Ashok steel industries limited is generating
profits to the tune of 2.5 crs and can significantly
ramp up its sales seeing better GDP growth from
the island nation.

MANDATORY DISCLOSURES:
This document is for information only and is meant for the use of the Recipient & not for circulation.
The information contained in this document has been taken from publicly available
information trade and statistical services & other sources. While the information contained herein is
from sources believed to be reliable, we do not hold ourselves responsible for its Completeness and
Accuracy. All opinions and estimates included in this report constitute our judgment as of this date and are
Subject to change without notice. Investors are expected to use the information contained in this report at their
own risk. This report is not and should not be construed as an offer or the Solicitation of an offer to buy or sell any
securities. TEAM STOCKRESEARCHERS and its affiliates may act as market maker or have assumed an underwriting
position in the securities of companies discussed herein and may sell them to or buy them from
customers on a principal basis.The author holds shares in AML STEEL in his portfolio with investment viewpoint.