Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jindal Steel and Power (JSP)
Metals & Mining
Steel business disappoints. JSP’s consolidated EBITDA of Rs17.3 bn and net income of
Rs10 bn was 4% and 8.5% lower than our estimate. The earnings miss was primarily
led by weak steel deliveries in the steel business. Power segment performance was
driven by robust generation and better realizations during the quarter. We will revisit
our earnings and valuations post the quarterly earnings call; our below-consensus
estimates will likely increase.
JSP – earnings miss on weak steel deliveries
JSP reported consolidated EBITDA and net income of Rs17.3 bn and Rs10 bn, 4% and 8.5% lower
than our estimate. The miss was primarily on account of weak performance of the steel business.
During the quarter, JSP commissioned Shadeed Iron and Steel’s HBI plant. JSP’s reported
standalone EBITDA of Rs10.7 bn (+37.4% yoy, +14.2% qoq) was 6.7% lower than our estimate
of Rs11.5 bn. Net income of Rs6.5 bn was in line with our estimates but helped by dividend
income of Rs1,171 mn from Jindal Power (JPL) that was not built in our estimate.
Steel deliveries of 531 kt were 7.4% lower than our estimate; the company may have added to
the inventory as compared to our expectation of inventory unwinding. Steel realizations grew
18.1% sequentially to average Rs45,958/tonne in 4QFY11, in line will our expectation, especially
noting that steel prices has increased ~US$100/tonne on a qoq basis. Pellet sales of 225 kt were in
line with our estimate and marginally higher than 200 kt of sales in 3QFY11.
JPL – robust generation and sequential improvement in realizations
JSPL’s subsidiary Jindal Power (JPL) reported 4QFY11 net sales of Rs8.3 bn (-2.8% yoy, 4% qoq)
and PAT of Rs4.9 bn (-5% yoy, 1.7% qoq) against our estimates of Rs8 bn and Rs4.7 bn. Higherthan
estimated revenues and PAT were primarily on account of strong generation of 2,170 MU
(against our estimate of 2,115 MU). Average realization at Rs4.1/kwh (assuming 8% auxiliary
consumption) and cost were in line with our estimate. Gross generation of 2,170 MU implied an
impressive PLF of 102%. We note that JPL clocked a strong 98% PLF for FY2011. JSPL reported
revenues and PAT of Rs33.4 bn (-15% yoy) and Rs20 bn (-14%).
Estimates review post quarterly earnings call
We will revisit earnings estimates post the quarterly earnings call. Our below-consensus estimates
may increase on inclusion of likely shipments of iron ore from Bolivian mines and steel projects
that may be commissioned till FY2013E. Currently, we value JSP at an SOTP-based target price of
Rs640/share. We currently value steel business at Rs282/share. We also assign Rs25 as option value
of Bolivian iron ore mine. We value JSPL’s power business at Rs333/share (Rs309 bn) based on
March 2012E SOTP.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jindal Steel and Power (JSP)
Metals & Mining
Steel business disappoints. JSP’s consolidated EBITDA of Rs17.3 bn and net income of
Rs10 bn was 4% and 8.5% lower than our estimate. The earnings miss was primarily
led by weak steel deliveries in the steel business. Power segment performance was
driven by robust generation and better realizations during the quarter. We will revisit
our earnings and valuations post the quarterly earnings call; our below-consensus
estimates will likely increase.
JSP – earnings miss on weak steel deliveries
JSP reported consolidated EBITDA and net income of Rs17.3 bn and Rs10 bn, 4% and 8.5% lower
than our estimate. The miss was primarily on account of weak performance of the steel business.
During the quarter, JSP commissioned Shadeed Iron and Steel’s HBI plant. JSP’s reported
standalone EBITDA of Rs10.7 bn (+37.4% yoy, +14.2% qoq) was 6.7% lower than our estimate
of Rs11.5 bn. Net income of Rs6.5 bn was in line with our estimates but helped by dividend
income of Rs1,171 mn from Jindal Power (JPL) that was not built in our estimate.
Steel deliveries of 531 kt were 7.4% lower than our estimate; the company may have added to
the inventory as compared to our expectation of inventory unwinding. Steel realizations grew
18.1% sequentially to average Rs45,958/tonne in 4QFY11, in line will our expectation, especially
noting that steel prices has increased ~US$100/tonne on a qoq basis. Pellet sales of 225 kt were in
line with our estimate and marginally higher than 200 kt of sales in 3QFY11.
JPL – robust generation and sequential improvement in realizations
JSPL’s subsidiary Jindal Power (JPL) reported 4QFY11 net sales of Rs8.3 bn (-2.8% yoy, 4% qoq)
and PAT of Rs4.9 bn (-5% yoy, 1.7% qoq) against our estimates of Rs8 bn and Rs4.7 bn. Higherthan
estimated revenues and PAT were primarily on account of strong generation of 2,170 MU
(against our estimate of 2,115 MU). Average realization at Rs4.1/kwh (assuming 8% auxiliary
consumption) and cost were in line with our estimate. Gross generation of 2,170 MU implied an
impressive PLF of 102%. We note that JPL clocked a strong 98% PLF for FY2011. JSPL reported
revenues and PAT of Rs33.4 bn (-15% yoy) and Rs20 bn (-14%).
Estimates review post quarterly earnings call
We will revisit earnings estimates post the quarterly earnings call. Our below-consensus estimates
may increase on inclusion of likely shipments of iron ore from Bolivian mines and steel projects
that may be commissioned till FY2013E. Currently, we value JSP at an SOTP-based target price of
Rs640/share. We currently value steel business at Rs282/share. We also assign Rs25 as option value
of Bolivian iron ore mine. We value JSPL’s power business at Rs333/share (Rs309 bn) based on
March 2012E SOTP.
No comments:
Post a Comment