Today we have picked our weekly investment pick from a steel sector namely Sunflag iron and steel company.Steel sector has been buzzing for long time an d to meet the investment demand of our invsetors we have come up with this stock as an long term mutltibagger potential pick.Stock is relatively a low beta stock and investors may not be affected by volatile movements.
Sunflag Iron & Steel Company
On carefully looking at the charts stock is trading near 52-week high high and has shown stable consolidation moves even in the recent turmoil markets.If one look carefully a bullish pennant candlestick pattern may form if breakout at 85--90 is met with high increase of volumes.
Stock is currently trading around 78 and has immediate support around 68--64 levels and one may wait for these level to enter for long term view.Stock has immediate resistance around 85--90 and if these resistance are successfully breached and sustained then we make see stock making new life time high.
RSI of 53 and increasing also suggest that stock may be entering overbought zone soon which will be accompanied by rise in volumes to push the stock for a a strong upward trend as market improves.
MACD of positive divergence of 0.14 also suggest that a strong upside momentum may be just around the corner.
Fundamentals of stock
Market Cap:1423.73 crore
EPS:3.62
Face Value 10
P/E:21.83
Qualified Foreign Investor:0.29
About Company
Sunflag Iron and Steel Co. Ltd. is a prestigious unit of the SUN FLAG GROUP. The plant is located in the central part of India at Bhandara, Maharashtra & it is 70 Kms from Nagpur. The plant has a capacity to produce 360,000 tonnes per annum of high quality special steel using liquid pig iron and sponge iron as basic inputs.
The main processes at the plant are,
– Iron making (Mini Blast Furnace, Sponge Iron Plant, Sinter plant).
– Steel Making
– Continuous Casting
– Rolling Mills
– Heat Treatments
– Bright Bar Making
– Inspection
– Quality Assurance
The profiles are Round Bars, Round Cornered Square, Round & Hexagonal wire Rods, Hexagonal straight bars, Flats, Bright Bars (Peeled/Drawn/Ground bars) etc.
The Steel is produced using 100% Iron ore as a basic raw material input. No scrap is sourced from outside.
The steel has very low tramp element contents & free from Radioactive or other harmful & hazardous contamination.
Within a short period of its inception in 1989, the SUNFLAG STEEL has established itself as a major global force. Started as a Spring Steel producer, the company today produces variety of steels. Carbon Steels, Alloy steels, Free & semi free cutting steels, Micro-alloyed steels, Stainless Steels, Spring Steels, Valve Steels, Bearing Steels, Cold Heading Quality Steels, Tool Steels, etc.
Sunflag Steel produces majority of the Steel for Automobile use in Engine, Drives, Transmissions, Suspensions etc. applications. Sunflag Steel also supplies steel to Indian Railways, Ordnance Factories, General Engineering & Power sectors.
Sunflag Iron & Steel Co. Ltd. has a collaboration with Daido Steel Co. Ltd., Japan from 2010. The association is useful for process & Quality enhancements, New Grade Developments, Localization of Indian Steel by the Automobile companies, Continual Improvements, etc.
Apart from catering to the Domestic steel requirements, Sunflag Steel also exports to South East, Middle East, European countries, United States etc.
Sunflag Steel is ISO 9001, TS 16949, ISO 14001 , OHSAS 18001, AD-2000-Merkblatt WO certified & ISO/IEC 17025 approved Testing laboratories by NABL.
Sunflag is Actively engaged in Pollution Control and accrediated by EMS Award.
Conclsuion
Immediate Resistance 85--90
Immediate Support 70--68
Buy Zone:78--70
Target 120--150+ In three months
MORE WILL UPDATE SOON!!
Hi. Good analysis on Sunflag. Based on the current pandemic situation, do u think sunflag will recover and achieve 150 target in the next 4-5 yrs.
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