Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sesa Goa
During 4QFY2011, despite lower production due to export ban in Karnataka and termination
of third-party mining in Orissa, sales volume grew marginally by 1.7% yoy to 7.5mn tonnes
(wmt basis). However, higher iron ore realisation led to 49.8% yoy growth in the top line to
`3,624 in 4QFY2011. During the quarter, iron ore realisation increased by 52.2% to
US$100/tonne. On the operating front, EBITDA grew by 40.9% yoy to `2,118cr. However,
EBITDA margin contracted by 368bp to 58.5% yoy as the positive impact of higher realisation
was offset by increased royalty rates and higher export duty and freight cost. Other income
grew by 30.9% yoy to `169cr, but tax rate increased by 34.7%, leading to only a 20.5% yoy
increase in the bottom line to `1,462cr.
Sesa Goa reported an increase in its R&R to 306mn tonnes as of March 31, 2011 (274mn
tonnes as of March 31, 2010), indicating a mine life of over 14 years based on FY2011
production. We believe the current stock price discounts negatives such as acquisition of
minority stake in unrelated oil business via Cairn India’s stake acquisition, increased export duty
and railway freight and muted volume growth from Goa mines. Sesa Goa is currently trading at
3.2x FY2012E and 2.3x FY2013E EV/EBITDA. On a P/BV basis, the stock is trading at 1.7x
FY2012 and 1.4x FY2013 estimates. We maintain our Buy rating on Sesa Goa and raise our
target price to `385 (`382), valuing the stock at 3.3x EV/EBITDA.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sesa Goa
During 4QFY2011, despite lower production due to export ban in Karnataka and termination
of third-party mining in Orissa, sales volume grew marginally by 1.7% yoy to 7.5mn tonnes
(wmt basis). However, higher iron ore realisation led to 49.8% yoy growth in the top line to
`3,624 in 4QFY2011. During the quarter, iron ore realisation increased by 52.2% to
US$100/tonne. On the operating front, EBITDA grew by 40.9% yoy to `2,118cr. However,
EBITDA margin contracted by 368bp to 58.5% yoy as the positive impact of higher realisation
was offset by increased royalty rates and higher export duty and freight cost. Other income
grew by 30.9% yoy to `169cr, but tax rate increased by 34.7%, leading to only a 20.5% yoy
increase in the bottom line to `1,462cr.
Sesa Goa reported an increase in its R&R to 306mn tonnes as of March 31, 2011 (274mn
tonnes as of March 31, 2010), indicating a mine life of over 14 years based on FY2011
production. We believe the current stock price discounts negatives such as acquisition of
minority stake in unrelated oil business via Cairn India’s stake acquisition, increased export duty
and railway freight and muted volume growth from Goa mines. Sesa Goa is currently trading at
3.2x FY2012E and 2.3x FY2013E EV/EBITDA. On a P/BV basis, the stock is trading at 1.7x
FY2012 and 1.4x FY2013 estimates. We maintain our Buy rating on Sesa Goa and raise our
target price to `385 (`382), valuing the stock at 3.3x EV/EBITDA.
No comments:
Post a Comment