Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P e r f o r m a n c e d e n t e d b y h i g h e r c o s t s …
SAIL’s Q1Y12 results came below our estimates on the back of higher
input costs and employee costs. Net sales came in at | 10926 crore (our
estimate: | 11457.1 crore), higher by 19.6% YoY but a decline of 10.2%
QoQ. Sales volumes at 2.75 million tonnes (MT) was lower by 12.4% QoQ
but higher by 18% YoY. EBITDA margins remained under pressure (down
~ 820 bps YoY, ~720 bps QoQ) due to higher raw material cost and
stood at 12.0%. EBITDA at | 1311.4 crore (our estimate: | 1833.7 crore)
was lower by 28.8% YoY and 44% QoQ. Net profit at | 838.1 crore (our
estimate: | 1121.7 crore) was lower by 28.8% YoY and 44.4% QoQ.
ƒ EBITDA/tonne takes a hit due to higher input and employee cost
During the quarter under review, the EBITDA per tonne stood at ~|
4775.5 per tonne, decline of 36.5% QoQ and 40.5% YoY. In Q1FY12,
a steep rise in inputs costs had led to a sharp decline in the
operating margins of the company (down ~ 820 bps YoY, ~720 bps
QoQ). The impact of higher coal prices on Q1FY11 costs was ~| 580
crore (out of this ~| 422 crore was on account of higher cost
imported coking coal). The employee cost stood at | 2251.18 crore
(increase of 11.9% YoY and 9.7% QoQ) due to the increase in
dearness allowance (DA) and other provisions. The impact of the
higher DA was ~ | 110 crore while increased provisioning for
retirement benefits and leave encashment resulted in a | 100 crore
increase in employee cost.
V a l u a t i o n
At the CMP of | 120, the stock is trading at FY13E PE of 10.6x and FY13E
EV/EBITDA of 7.9x. Factoring in the concerns on higher raw material
prices and higher wage cost, we have valued the stock at 5.5x EV/EBITDA
FY13E to arrive at a target price of | 128. We have assigned a HOLD
rating to the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P e r f o r m a n c e d e n t e d b y h i g h e r c o s t s …
SAIL’s Q1Y12 results came below our estimates on the back of higher
input costs and employee costs. Net sales came in at | 10926 crore (our
estimate: | 11457.1 crore), higher by 19.6% YoY but a decline of 10.2%
QoQ. Sales volumes at 2.75 million tonnes (MT) was lower by 12.4% QoQ
but higher by 18% YoY. EBITDA margins remained under pressure (down
~ 820 bps YoY, ~720 bps QoQ) due to higher raw material cost and
stood at 12.0%. EBITDA at | 1311.4 crore (our estimate: | 1833.7 crore)
was lower by 28.8% YoY and 44% QoQ. Net profit at | 838.1 crore (our
estimate: | 1121.7 crore) was lower by 28.8% YoY and 44.4% QoQ.
ƒ EBITDA/tonne takes a hit due to higher input and employee cost
During the quarter under review, the EBITDA per tonne stood at ~|
4775.5 per tonne, decline of 36.5% QoQ and 40.5% YoY. In Q1FY12,
a steep rise in inputs costs had led to a sharp decline in the
operating margins of the company (down ~ 820 bps YoY, ~720 bps
QoQ). The impact of higher coal prices on Q1FY11 costs was ~| 580
crore (out of this ~| 422 crore was on account of higher cost
imported coking coal). The employee cost stood at | 2251.18 crore
(increase of 11.9% YoY and 9.7% QoQ) due to the increase in
dearness allowance (DA) and other provisions. The impact of the
higher DA was ~ | 110 crore while increased provisioning for
retirement benefits and leave encashment resulted in a | 100 crore
increase in employee cost.
V a l u a t i o n
At the CMP of | 120, the stock is trading at FY13E PE of 10.6x and FY13E
EV/EBITDA of 7.9x. Factoring in the concerns on higher raw material
prices and higher wage cost, we have valued the stock at 5.5x EV/EBITDA
FY13E to arrive at a target price of | 128. We have assigned a HOLD
rating to the stock.
No comments:
Post a Comment