Godawari Power has target of Rs 384

Godawari Power has target of RS 384
Godawari Power has not done anything in the last one week but if one looks at the last one-two months the has appreciated quite a lot. Coming to the fundamentals of the stock, it is basically a manufacturer of sponge iron, billets and ferro alloys the company has recently expanded its capacity in sponge iron and billets. Sponge iron capacity is increased by almost 100%, which was commissioned in April 2007 and the billets capacity is also gone up by 60% so the entire impact of this expansion will start to see it in second half of FY08 and of course FY09.
He further added, "Apart from this the company has benefited by getting into backward integrated i.e. it has recently been allotted the license to mine iron ore in Chattisgarh, the reserves approximately are 50 million tonne in those mines also the Ministry of Coal has allotted coal mines to a consortium of five companies in which Godawari Power has right of approximately 63 million tonne of coal from those mines.
When one would workout the benefit that the company will accrue because of iron ore mines we expect the company to have a savings of Rs 1,400 per tonne and from the coalmines it would benefit by around Rs 600 per tonne. So if one actually works it out and arrives with the NPV (net present value) the combined value of the mine comes to around Rs 127, which we believe is not has been factored into the so the benefit from this will help the stock to achieve price target of Rs 384 in the next 12-15 months