Book Profit Now - Lloyds Steel Industries

We had recommended Lloyds Steel Industries to our investors in issue No 6 (Dated March 1-14, 2010) at Rs 11. Despite its inconsistent performance and bumpy ride in the earlier years, we had recommended the scrip to our investors. Our recommendation was backed by the factors like strong financial performance of the company in the 9MFY10, its diversified business mix and last but not the least its debt restructuring plans.

Further, the investment of promoters at Rs 10 per share provided a cushion towards the down side. Considering all these factors we had recommended the counter with a target price of Rs 16 in one year. Now the scrip has already exceeded the target and is trading at Rs 18.75, providing an appreciation of more than 70 per cent. As the recommended target is achieved we feel the prudent strategy will be to book profit at current levels. The Q4FY10 results are expected to be good as the impact of the debt restructuring will be seen in the quarter.

Further the rise in metal prices is also expected to help the company improve on the margins front. So combination of both is expected to help the company put in strong performance. Hence we recommend the investors to take the Q4FY10 results as opportunity to book profit.