Sesa Goa’s iron ore sales volume marginally higher in 4QFY2011 ::Angel Broking,

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Sesa Goa’s iron ore sales volume marginally higher in 4QFY2011

For 4QFY2011, due to the export ban in Karnataka since the end of July 2010 and

termination of third-party mining in Orissa in November 2010, iron ore production on a

dry metric tonnes (DMT) basis declined by 21% yoy to 5.49mn tonnes (6.24mn tonnes on

wet metric tonne – WMT basis). However, iron ore sales volume came in marginally higher

at 6.65mn tonnes on DMT basis (7.53mn tonnes on WMT basis), compared to 6.55mn

tonnes (7.37mn tonnes on WMT basis) in 4QFY2010.

For FY2011, iron ore production was marginally lower at 18.8mn tonnes (21.08mn tonnes

on WMT basis), while sales volume was flat at 18.14mn tonnes (20.37mn tonnes on

WMT basis), as against 18.39mn tonnes (20.52mn tonnes on WMT basis) sold

in FY2010.

Recently, the Supreme Court has issued an interim ruling that the Karnataka export ban is

to be lifted from April 20, 2011. However, the final hearing of the case is expected in the

first week of May 2011. We maintain our Buy rating on the stock with a target price of

`382, valuing the stock at 3.0x FY2013E EV/EBITDA.