Incorporated in 1973, with an aim of achieving self-reliance in research and development, and supply of critical alloys and products of national security, MIDHANI is one of the leading manufacturers of special steels, super alloys and the only manufacturer of titanium alloys in India. These are high value products which cater to niche end user segments such as defence, space and power.
Outlook & Valuation: In terms of valuations, the pre-issue P/E works out to 30.9x 1HFY2018 annualized earnings (at the upper end of the issue price band), which is high considering MIDHANI’s historical two year CAGR top-line & bottom-line growth. Further, MIDHANI has an undersized order book which lacks revenue visibility, coupled with lower return ratios. Considering the above factors, we recommend NEUTRAL rating on the issue.
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