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www.niftyiews.comSTOCK REPORT- A VIRGINSTEEL STOCK.COMPANY.UNTRACKED ANDUNKNOWN.

AML STEEL LIMITED (FORMERLY ASHOK MAGNETICS LTD)

•

STEEL OPERATIONS IN INDIA AND SRILANKA.

• GREENFEILD EXPANSION IN JHARKHANDOPERATIONAL.

• 384 ACRES OF IRON ORE MINES AWAITING FORESTDEPT APPROVAL IN JHARKHAND.(SARAIKELA DISTRICT)

• IRON ORE LEASE APPROVED BY GOVT OF INDIA FOR20 YEARS FOR 40 MT.

• IT IS TRADING AT A DISCOUNT TO ITS REPLACEMENTVALUE AT DISCOUNT WITH MOST SECOND RUNG STEEL

STOCKS IN CENTRAL INDIA.

KEY STATS:-

• Code :

AMLSTEEL

• Market cap : 285mln

• FY09 BV : 76.48

• Total Debt :2402 mln

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TEAMSTOCKRESEARCHERS

Pvt. Ltd.

3 SUBHASHNAGAR CORNER,RAIYA ROAD,RAJKOT, Gujarat, 360007

www.niftyviews.com

CONTACT:09327744250

RECOMMENDED DATE:24.05.2010

VOLUME NO: 3/2010

ISSUE NO:41.

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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 sametime 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.

HEADLINE

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 dated16th 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.



The company posts standalone results to NSE

which does not reflect upon the current state of

financials of the company.

For example while the standalone results show

the quartelrly sales of 257 millions with a

negative PAT of 1.60 mlns. This does not reflect

the state of financials of the company.

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.

HIDDEN VALUE

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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.

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 availableinformation 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.

tsr long term calls rocking again

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