Anand Rathi - Tayo Rolls

Promoted by TATA group along with couple of foreign promoters, wherein TATA's hold 38% while foreign promoters hold around 12% stake. Company is predominantly engaged in manufacture of all kind of ROLLS for steel mills. This is kind of one stop shop for the steel mills to source roll requirement and is market leader in India. Present Roll making capacity is 13,500 MTs, which will be raised to 17,000 MTs by 2008.

Company exports around 30% of the Rolls to developed markets like Europe and USA, where due to high cost, quite a few such facilities are being closed down and company is exploiting the opportunity being a high quality roll maker. Company's clients list includes players like - POSCO, CORUS, Thyssen, China Steel, SSAB etc

Company is targetting FIVE FOLD GROWTH IN FIVE YEARS in roll business. After the acquisition of CORUS by TATA group, it could be legitimately expected that exports to this European player will grow from this TATA company

For the March'07, company is likely to report EPS of Rs 20-21, there by discounting this earnings by just 6 times, which is very attractive for a TATA company with high growth potential.

In our view at current price of Rs 123, its strong Buy with significant potential. One can Buy with stop loss of 110 to look for target of RS 175 in medium term and Rs 220 in long term.

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