Jai Balaji Industries Ltd: Gains from the Budget Proposals

The budget 2012-13 is positive for Jai Balaji Industries Ltd, as the company plans to set up 5 million tonne integrated Steel Plant, 3 million tonne Cement Plant and 1,215 MW Power Plant in Raghunathpur, in West Bengal. The company is expected to enhance its presence in Steel and Power business in the near future and hence this budget is important for them. The budget provides many windows of aid for the power sector, notably through duty-free imports of coal and LNG and easier funding---the company could opt for either or both. The company is already in the advanced stage of setting up of 0.35 million tons Coke Oven Plant along with waste heat recovery boiler of 80 TPH at its unit at Durgapur. The company's projects are laden with debts and it can pay off some debts with cheaper foreign loans (ECBs). The extension of tax breaks on new projects is another booster to its balance sheet. Tax exemption for mining equipment could also help the company as it is into captive mining of coal. It is to be noted that, a Joint Venture Company ‘Rohne Coal Company Private Limited’ was formed in 2008-09 with the Registrar of Companies, NCT of Delhi & Haryana, in which the company along with M/s JSW Steel Limited & M/s Bhushan Power & Steel Limited are venture partners. The said Joint Venture Company was formed in terms of allocation of Rohne-Coking Coal Block in the State of Jharkhand by Ministry of Coal, Government of India. It  has has 6.90% stake in the coal block. Moreover, Billet prices are expected to increase after the hike in excise duty from 10% to 12% in the Union Budget 2012-13. Now looking from all angles, it is found that the scrip could move towards Rs.62-65, in the next 2 months time frame.