I am currently buying Gujarat NRE Coke shares from a long-term perspective. The story behind:
Gujarat NRE Coke - quoting around Rs100/- owns mines in Australia and manufactures coke in India. The raw material for coke production comes from the Australian captive mines. Coke is used in the production of steel and also used in few other industries. With the Steel cycle looking very strong, one of the direct beneficiaries would be Gujarat NRE coke. The coke prices have more than doubled in the international markets in the last 2 years and it is expected to go up further. The company is building a captive power plant of 2.4 MW which can improve the operational efficiency and the margins. Simultaneously it is also expanding the capacity from 1 Million Tonnes to 1.4 Million tonnes P.A.
The Australian coal mines are listed companies in Australia with market capitalisation of close of Rs1600 crores. 91% of the stock is owned by Gujarat NRE coke and the total capitalisation of Gujarat NRE coke is around Rs3200 crores. It is quoting at a PE of around 19-20.
The stock has moved a bit in the current rally from around 55-60 levels to 100-115 levels. In the last 4 days of correction, the stock has come down to Rs97. I today purchased at Rs97.50 and plans to accumulate if it comes down further.
Disclaimer: This is not an invitation to buy shares or securities. This is only my personal opinion. I own these shares. Please think and take your own decision or consult your financial planner before investing in share markets.
PS: 1. By adding a disclaimer, I am trying to become a stock market analyst, so that I dont have any committment!!!!
2. My long term perspective is simple - I dont want to pay any Captial Gains taxes. That is, one year and above.