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Higher realisations lead to better performance…
Sesa Goa’s Q4FY11 results came above our estimates. Net sales grew
~50% YoY to | 3623 crore against our estimate of | 3147 crore. Robust
topline growth was mainly driven by strong growth in sales volumes (up
~2% YoY and ~40% QoQ), which stood at 7.53 million (wet metric
tonnes) tonnes. Overall realisations also improved to | 4679/t (up ~52%
YoY and ~20% QoQ). EBITDA grew ~42% YoY and ~72% YoY to ~|
2122 crore mainly on account of higher realisations. PAT also improved
~20% YoY to ~| 1461 crore, lower than our estimates at | 1497 crore.
Going forward, the company is confident of increasing its sales volume as
the ban on iron ore exports by Karnataka has been lifted. However,
exports have not yet begun as permit for the same is pending. The
company’s strong focus on exploration activities at its operations in Goa
and Karnataka have led to significant reserves and resources accretion
with a net addition of 32 MT during the year.
Acquisition of 10.4% stake in Cairn India
On April 19, 2011, the company acquired 20 crore shares in Cairn India
from Petronas International Corporation Ltd at a price of | 331/share.
The company plans to acquire another 20% from the open offer, which
is expected to close on April 30.
Acquisition of Bellary Steel Assets
The acquisition of Bellary Steel Assets’ (BSAL) 0.5 MTPA steel plant at
Bellary was done for a consideration of | 220 crore. The assets include
free hold land of ~700 acres, building and structures, plant and
machinery and other assets of the steel plant. The asset has been
transferred in the name of Sesa Goa.
Valuation
At the CMP of | 319, the stock is trading at 7.6x and 7.3x its FY12E and
FY13E EV/EBITDA, respectively. On a P/E basis, the stock is discounting
its FY12E and FY13E EPS by 5.5x and 5.3x, respectively. We have
incorporated Cairn India’s acquisition in our estimated and rolled over
our valuation to FY13E, thus valuing it at 5.5x FY13E EV/EBITDA. We
have arrived at a target price of | 300 and assigned a HOLD rating to it.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Higher realisations lead to better performance…
Sesa Goa’s Q4FY11 results came above our estimates. Net sales grew
~50% YoY to | 3623 crore against our estimate of | 3147 crore. Robust
topline growth was mainly driven by strong growth in sales volumes (up
~2% YoY and ~40% QoQ), which stood at 7.53 million (wet metric
tonnes) tonnes. Overall realisations also improved to | 4679/t (up ~52%
YoY and ~20% QoQ). EBITDA grew ~42% YoY and ~72% YoY to ~|
2122 crore mainly on account of higher realisations. PAT also improved
~20% YoY to ~| 1461 crore, lower than our estimates at | 1497 crore.
Going forward, the company is confident of increasing its sales volume as
the ban on iron ore exports by Karnataka has been lifted. However,
exports have not yet begun as permit for the same is pending. The
company’s strong focus on exploration activities at its operations in Goa
and Karnataka have led to significant reserves and resources accretion
with a net addition of 32 MT during the year.
Acquisition of 10.4% stake in Cairn India
On April 19, 2011, the company acquired 20 crore shares in Cairn India
from Petronas International Corporation Ltd at a price of | 331/share.
The company plans to acquire another 20% from the open offer, which
is expected to close on April 30.
Acquisition of Bellary Steel Assets
The acquisition of Bellary Steel Assets’ (BSAL) 0.5 MTPA steel plant at
Bellary was done for a consideration of | 220 crore. The assets include
free hold land of ~700 acres, building and structures, plant and
machinery and other assets of the steel plant. The asset has been
transferred in the name of Sesa Goa.
Valuation
At the CMP of | 319, the stock is trading at 7.6x and 7.3x its FY12E and
FY13E EV/EBITDA, respectively. On a P/E basis, the stock is discounting
its FY12E and FY13E EPS by 5.5x and 5.3x, respectively. We have
incorporated Cairn India’s acquisition in our estimated and rolled over
our valuation to FY13E, thus valuing it at 5.5x FY13E EV/EBITDA. We
have arrived at a target price of | 300 and assigned a HOLD rating to it.
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