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Adhunik Metaliks:: Good show by mining segment…
Adhunik Metaliks’ Q3FY11 results came in better than our estimates.
The topline improved ~16% YoY and remained flat QoQ at | 435 crore
against the expected | 423 crore. On the revenue front, the iron and
steel segment contributed ~| 356 crore, growing ~ 13% YoY. OMML’s
revenues grew a robust 86% YoY at | 112 crore due to higher
manganese ore sales volumes and realisations. Consolidated EBITDA
fell ~1170 bps YoY and ~300 bps QoQ due to higher raw material costs
for coke and iron ore. Consolidated PAT for Q3FY11 came in at~ | 54
crore against the expected | 43 crore (up ~116% YoY and down ~4%
QoQ) despite higher interest cost (up ~60% YoY and 12% QoQ). With
the ramping up of mining activities both in iron ore and manganese ore
and commissioning of 540 MW power plant by March 2012, we maintain
our positive outlook on the company. Also, have revised our target price
to | 109, with a BUY rating.
OMML led to the upsurge
OMML reported robust revenue growth of ~86% YoY backed by
higher manganese ore sales volumes and robust sales realisations.
Despite a poor show from the iron ore segment (EBIT margins down
~27% YoY), overall EBIT margins for the segment improved ~26%
YoY driven by the continuing improved performance from the
mining segment (EBIT margins up by ~100% YoY). Commissioning
of the pellet plant and mining operations at Suleipat iron ore mines
is likely to improve volumes, going ahead.
APNRL project on track
Adhunik Power and Natural Resources (APNRL) got equity infusion
of ~| 125 crore from Macquarie SBI Infrastructure Investments and
SBI for setting up a 540 MW power plant that is expected to be
commissioned by March 2012. The first unit will be commissioned
by January 2012 and the second unit by March 2012.
Valuation
At the CMP of | 94, the stock is trading at FY12E P/E of 4.1x and FY12E
EV/EBITDA of 3.9x on a consolidated basis. We have valued the stock at
4x FY12E consolidated EV/EBITDA, thereby arriving at our revised target
price of | 109. We maintain our BUY rating on the stock.
Outlook & earnings revision
The company has posted a robust performance in Q3FY11 led by robust
contribution from OMML. Though the standalone iron and steel business
saw some pressure due to volume drop and muted realisations, it is
expected to improve with the commencement of the Kulum Iron ore mine
providing captive iron ore resources to the segment. Iron ore production
is also expected to get scaled up with the commissioning of the pellet
plant and mining operations in Suleipat iron ore mines.
Thus, the pellet plant capacity will be raised to ~1.2 million tonnes (MT)
with FY12 capacity addition of ~0.5 MT. The management expects the
iron ore segment to post volumes of ~1.5 MT in FY11, further improving
to 1.8 MT in FY12. Similarly, manganese ore production for FY11 is
estimated at ~2,50,000 tonnes improving substantially in FY12 to
5,00,000 tonnes due to the addition of three new iron ore mines.
Implementation of the 540 MW coal based power plant at Jharkhand is
progressing on schedule and is expected to be commissioned by March
2012. The project is backed by captive coal mines in Jharkhand to be
operational by FY13.
Looking at the ramp up in mining activities with the addition of new mines
and better captive availability for the iron and steel segment, we have
revised our estimates both for FY11E and FY12E.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Adhunik Metaliks:: Good show by mining segment…
Adhunik Metaliks’ Q3FY11 results came in better than our estimates.
The topline improved ~16% YoY and remained flat QoQ at | 435 crore
against the expected | 423 crore. On the revenue front, the iron and
steel segment contributed ~| 356 crore, growing ~ 13% YoY. OMML’s
revenues grew a robust 86% YoY at | 112 crore due to higher
manganese ore sales volumes and realisations. Consolidated EBITDA
fell ~1170 bps YoY and ~300 bps QoQ due to higher raw material costs
for coke and iron ore. Consolidated PAT for Q3FY11 came in at~ | 54
crore against the expected | 43 crore (up ~116% YoY and down ~4%
QoQ) despite higher interest cost (up ~60% YoY and 12% QoQ). With
the ramping up of mining activities both in iron ore and manganese ore
and commissioning of 540 MW power plant by March 2012, we maintain
our positive outlook on the company. Also, have revised our target price
to | 109, with a BUY rating.
OMML led to the upsurge
OMML reported robust revenue growth of ~86% YoY backed by
higher manganese ore sales volumes and robust sales realisations.
Despite a poor show from the iron ore segment (EBIT margins down
~27% YoY), overall EBIT margins for the segment improved ~26%
YoY driven by the continuing improved performance from the
mining segment (EBIT margins up by ~100% YoY). Commissioning
of the pellet plant and mining operations at Suleipat iron ore mines
is likely to improve volumes, going ahead.
APNRL project on track
Adhunik Power and Natural Resources (APNRL) got equity infusion
of ~| 125 crore from Macquarie SBI Infrastructure Investments and
SBI for setting up a 540 MW power plant that is expected to be
commissioned by March 2012. The first unit will be commissioned
by January 2012 and the second unit by March 2012.
Valuation
At the CMP of | 94, the stock is trading at FY12E P/E of 4.1x and FY12E
EV/EBITDA of 3.9x on a consolidated basis. We have valued the stock at
4x FY12E consolidated EV/EBITDA, thereby arriving at our revised target
price of | 109. We maintain our BUY rating on the stock.
Outlook & earnings revision
The company has posted a robust performance in Q3FY11 led by robust
contribution from OMML. Though the standalone iron and steel business
saw some pressure due to volume drop and muted realisations, it is
expected to improve with the commencement of the Kulum Iron ore mine
providing captive iron ore resources to the segment. Iron ore production
is also expected to get scaled up with the commissioning of the pellet
plant and mining operations in Suleipat iron ore mines.
Thus, the pellet plant capacity will be raised to ~1.2 million tonnes (MT)
with FY12 capacity addition of ~0.5 MT. The management expects the
iron ore segment to post volumes of ~1.5 MT in FY11, further improving
to 1.8 MT in FY12. Similarly, manganese ore production for FY11 is
estimated at ~2,50,000 tonnes improving substantially in FY12 to
5,00,000 tonnes due to the addition of three new iron ore mines.
Implementation of the 540 MW coal based power plant at Jharkhand is
progressing on schedule and is expected to be commissioned by March
2012. The project is backed by captive coal mines in Jharkhand to be
operational by FY13.
Looking at the ramp up in mining activities with the addition of new mines
and better captive availability for the iron and steel segment, we have
revised our estimates both for FY11E and FY12E.
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