Bhushan Steel -Higher depreciation, interest cost to weigh HOLD:Emkay

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Bhushan Steel

Higher depreciation, interest cost to weigh

HOLD

CMP: Rs375                                        Target Price: Rs425

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n     Topline performance came better than our expectations at Rs 22.3 bn, up 63% YoY and 14% QoQ, mainly backed by 58% YoY and 15% QoQ growth in sales volume to 4.89 lakh tonne

n     EBITDA performance also has been better than our estimate at Rs 6.6 bn, up 62% YoY and 10% QoQ. EBITDA/ tonne stood at Rs 13500, down 5% QOQ but up 2% YoY      

n     APAT at Rs 2.1 bn, up 2% YoY and down 27% QoQ, met our estimates despite higher revenue and EBITDA on 119% and 63% QoQ rise respectively in depreciation and interest costs

n     We revise down our EPS for FY12E and FY13E to Rs 42 and Rs 47 respectively with a target price of Rs 425/ share; Maintain Hold