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Sesa Goa
Sesa Goa announced its 3QFY2011 results. The company reported moderate growth of
19.1% yoy to `2,250cr, above our estimates of `1,855cr. Net sales were above our
expectations on account of higher-than-expected realisation on iron ore sales; however,
sales volumes were below our expectations. During 3QFY2011, production was lower on
account of extended monsoons and restricted road timings in Goa. Moreover, we believe the
state-wide ban on export of iron ore from Karnataka hit its operations in Karnataka. Hence,
overall sales volumes of iron ore and pig iron declined by 21% yoy and 12% yoy to 5.4mn
tonnes and 0.6mn tonnes, respectively. Furthermore, EBITDA margin was below our estimate
on account of higher-than-expected logistics and royalty costs.
Although we will raise our iron ore sales realisation estimates for FY2012E in our 3QFY2011
update report, we lack proper clarity on sales volumes growth. Hence, we wait for further
clarity in the upcoming concall with management. The stock is currently under review.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Sesa Goa
Sesa Goa announced its 3QFY2011 results. The company reported moderate growth of
19.1% yoy to `2,250cr, above our estimates of `1,855cr. Net sales were above our
expectations on account of higher-than-expected realisation on iron ore sales; however,
sales volumes were below our expectations. During 3QFY2011, production was lower on
account of extended monsoons and restricted road timings in Goa. Moreover, we believe the
state-wide ban on export of iron ore from Karnataka hit its operations in Karnataka. Hence,
overall sales volumes of iron ore and pig iron declined by 21% yoy and 12% yoy to 5.4mn
tonnes and 0.6mn tonnes, respectively. Furthermore, EBITDA margin was below our estimate
on account of higher-than-expected logistics and royalty costs.
Although we will raise our iron ore sales realisation estimates for FY2012E in our 3QFY2011
update report, we lack proper clarity on sales volumes growth. Hence, we wait for further
clarity in the upcoming concall with management. The stock is currently under review.
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