Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Essar Oil
Q4FY11 GRMs in line with UBSe
Q4FY11: Results marginally above UBS estimates
Essar oil reported net profit of Rs3.2bn for Q4FY11 (slightly higher than UBS
estimate) as compared to a profit of Rs1.8bn in Q4FY10. EBITDA at Rs8.9bn
grew 43% YoY, 16% QoQ. EBITDA margin improved 40bps over Q3FY11 due to
higher GRMs. Other income at Rs270mn decreased 56% QoQ. The company
processed 3.7mt of crude in Q4FY11, -1.9% QoQ, +1.7% YoY.
Refining margin was US$8.2/bbl vs. US$7.2 in 3Q11
Refining margin including sales tax for the quarter was US$8.2/bbl (US$7.2/bbl in
Q3FY11) vs. Singapore complex GRM of US$7.4/bbl. Essar spread to Singapore
GRM was US$0.75/bbl vs.US$1.7/bbl last quarter. Sales tax benefit was
US$2.9/bbl in Q4FY11. We expect sales tax benefit to decline going forward as
proportion of domestic sales in Gujarat becomes lesser. Till FY11, the company
has used little more than half of sales tax benefit (Rs48bn) allowed to it.
Refinery expansion by Sept’11
Refinery expansion is on schedule to be completed by September 2011. After the
planned shutdown of 35 days in Sept-Oct’11 for tie-in of certain new units, we
expect higher refinery throughput and GRMs to be reflected by Q4FY12. Most of
the equipments have been purchased and the expansion has an overall completion
of 86%.
Valuation: Reiterate Buy with a price target of Rs175
We value the stock on a sum-of-the-parts basis: refinery, retail and upstream at
Rs140, Rs17/sh and Rs18 per share, resp. The stock has risen 6.5% over 3MTD.
Essar Oil
Essar Oil is a part of Essar Holdings Limited, a subsidiary of Essar Global
Limited. It operates a 14mtpa refinery on the west coast of India and plans to
increase refining capacity to 18mtpa by March 2011 and to 36mtpa by March
2013. The company's assets include developmental rights in proven exploration
blocks, and it has over 1,200 retail outlets across India with plans to expand to
3,000 outlets.
Statement of Risk
Refining margins and execution of the refinery upgrade are key business risks
for Essar at this stage. Progress on E&P can provide upside.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Essar Oil
Q4FY11 GRMs in line with UBSe
Q4FY11: Results marginally above UBS estimates
Essar oil reported net profit of Rs3.2bn for Q4FY11 (slightly higher than UBS
estimate) as compared to a profit of Rs1.8bn in Q4FY10. EBITDA at Rs8.9bn
grew 43% YoY, 16% QoQ. EBITDA margin improved 40bps over Q3FY11 due to
higher GRMs. Other income at Rs270mn decreased 56% QoQ. The company
processed 3.7mt of crude in Q4FY11, -1.9% QoQ, +1.7% YoY.
Refining margin was US$8.2/bbl vs. US$7.2 in 3Q11
Refining margin including sales tax for the quarter was US$8.2/bbl (US$7.2/bbl in
Q3FY11) vs. Singapore complex GRM of US$7.4/bbl. Essar spread to Singapore
GRM was US$0.75/bbl vs.US$1.7/bbl last quarter. Sales tax benefit was
US$2.9/bbl in Q4FY11. We expect sales tax benefit to decline going forward as
proportion of domestic sales in Gujarat becomes lesser. Till FY11, the company
has used little more than half of sales tax benefit (Rs48bn) allowed to it.
Refinery expansion by Sept’11
Refinery expansion is on schedule to be completed by September 2011. After the
planned shutdown of 35 days in Sept-Oct’11 for tie-in of certain new units, we
expect higher refinery throughput and GRMs to be reflected by Q4FY12. Most of
the equipments have been purchased and the expansion has an overall completion
of 86%.
Valuation: Reiterate Buy with a price target of Rs175
We value the stock on a sum-of-the-parts basis: refinery, retail and upstream at
Rs140, Rs17/sh and Rs18 per share, resp. The stock has risen 6.5% over 3MTD.
Essar Oil
Essar Oil is a part of Essar Holdings Limited, a subsidiary of Essar Global
Limited. It operates a 14mtpa refinery on the west coast of India and plans to
increase refining capacity to 18mtpa by March 2011 and to 36mtpa by March
2013. The company's assets include developmental rights in proven exploration
blocks, and it has over 1,200 retail outlets across India with plans to expand to
3,000 outlets.
Statement of Risk
Refining margins and execution of the refinery upgrade are key business risks
for Essar at this stage. Progress on E&P can provide upside.
No comments:
Post a Comment