Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JSW STEEL: Key takeaways
Company confident of improving EBITDA/ ton to US$170 for the March 2011 quarter
from US$140 in the December 2010 quarter. Improvement largely on the back of price
increases take in the January and February 2011. The company indicates that another
price increase is around the corner.
Company indicates that it has enough inventory of coking coal to sustain operations till
March 2011. The company has not made any spot purchases of coking coal. JSW as a risk
mitigation strategy sources some coking coal from US as well (especially in the month of
December and January), even though it entails additional freight cost of US$8-10/ ton,
when compared to shipments from Australia.
JSW has outlined EBITDA/ ton target of US$170 for FY2012E, even though it may start
the year with profitability well below that number.
JSW believes the Street has not fully appreciated the cost savings they can bring to Ispat
Steel. JSW outlined some of the areas of cost savings, i.e., (1) sourcing of iron ore from
Bellary instead of Orissa will help save freight costs; (2) savings on logistics costs; (3) Ispat
has VAT exemption till March 2014; (4) savings in power costs; ISPAT presently buys
power MSEB at Rs6/ KWH, which will reduce to Rs4.5/ unit in case it sources power from
JSW Energy; (5) reduction in coke costs. JSW has outlined EBTIDA target of Rs10.5 bn for
FY2012E.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JSW STEEL: Key takeaways
Company confident of improving EBITDA/ ton to US$170 for the March 2011 quarter
from US$140 in the December 2010 quarter. Improvement largely on the back of price
increases take in the January and February 2011. The company indicates that another
price increase is around the corner.
Company indicates that it has enough inventory of coking coal to sustain operations till
March 2011. The company has not made any spot purchases of coking coal. JSW as a risk
mitigation strategy sources some coking coal from US as well (especially in the month of
December and January), even though it entails additional freight cost of US$8-10/ ton,
when compared to shipments from Australia.
JSW has outlined EBITDA/ ton target of US$170 for FY2012E, even though it may start
the year with profitability well below that number.
JSW believes the Street has not fully appreciated the cost savings they can bring to Ispat
Steel. JSW outlined some of the areas of cost savings, i.e., (1) sourcing of iron ore from
Bellary instead of Orissa will help save freight costs; (2) savings on logistics costs; (3) Ispat
has VAT exemption till March 2014; (4) savings in power costs; ISPAT presently buys
power MSEB at Rs6/ KWH, which will reduce to Rs4.5/ unit in case it sources power from
JSW Energy; (5) reduction in coke costs. JSW has outlined EBTIDA target of Rs10.5 bn for
FY2012E.
No comments:
Post a Comment