Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Results were weaker than expected due to lower realisations:
premium over LME contracted. Overall costs were flat: a $70/t
QoQ decline in manufacturing costs was mostly offset by higher
royalty and staff costs. Interest income beat, and cash balance
rose to Rs162 bn (+Rs5.7 bn): FCF was lower due to advance tax
payment.
● The board has approved a change in dividend policy—now linked to
profits—a welcome change considering the limited use of high cash
reserves in the near future. Interim dividend (Rs1.5/ share) is 22%
of 1H PAT (9% in FY11); annual dividend yield stands at 2.5%.
● Pb smelter should reach 85% utilisation by 4Q. Once full capacity
ramps up, 10-15 kt concentrate will be purchased externally.
Silver capacity should reach 500 kt by FY12 end.
● We expect Zinc prices to remain weak near term given the
uncertainty on China and the global de-stocking but to recover to
$2,300 by 2H FY13. We have cut our estimates accordingly. Our
TP falls to Rs152 from Rs173. We maintain OUTPERFORM.
● Our 2Q12 Sterlite estimates for Sales, EBITDA and PAT are
Rs99.5 bn, Rs21.5 bn and Rs11.7 bn, respectively.
Lacklustre results, change in dividend policy is positive
Results were weaker than expected due to lower realisations on metal
sales (premium over LME contracted). Manufacturing costs saw a
$70/t decline, but this was offset mostly by higher royalty and
employee cost; overall costs were flat. Interest income was higher
than expected, and cash balance increased to Rs162 bn (up Rs5.7 bn
QoQ)—FCF was lower due to the advance tax payment.
The board has approved a change in dividend policy: now dividend will
be linked to profits, which is a welcome change considering the limited
use of high cash reserves in the near future. The interim dividend
declared (Rs1.5/share) is 22% of 1H PAT and management plans to
maintain a similar ratio. This is higher than the 9% payout in FY11. With
limited near-term usage of cash, a dividend yield of 2.5% is welcome.
Key takeaways from conference call
● Pb smelter utilisation should reach 85% by 4Q. Once full capacity
ramps up, 10–15 kt concentrate will be purchased externally.
● Silver capacity should reach 500 kt by FY12 end.
● No plans to move Anglo’s assets from Sterlite to HZL as of now.
Reduce target price to Rs152; maintain OUTPERFORM
We expect Zinc prices to remain weak, recovering to $2300 by 2H13.
We have cut our estimates accordingly. Our TP reduces to Rs152.
With 26% potential upside, we maintain our OUTPERFORM rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Results were weaker than expected due to lower realisations:
premium over LME contracted. Overall costs were flat: a $70/t
QoQ decline in manufacturing costs was mostly offset by higher
royalty and staff costs. Interest income beat, and cash balance
rose to Rs162 bn (+Rs5.7 bn): FCF was lower due to advance tax
payment.
● The board has approved a change in dividend policy—now linked to
profits—a welcome change considering the limited use of high cash
reserves in the near future. Interim dividend (Rs1.5/ share) is 22%
of 1H PAT (9% in FY11); annual dividend yield stands at 2.5%.
● Pb smelter should reach 85% utilisation by 4Q. Once full capacity
ramps up, 10-15 kt concentrate will be purchased externally.
Silver capacity should reach 500 kt by FY12 end.
● We expect Zinc prices to remain weak near term given the
uncertainty on China and the global de-stocking but to recover to
$2,300 by 2H FY13. We have cut our estimates accordingly. Our
TP falls to Rs152 from Rs173. We maintain OUTPERFORM.
● Our 2Q12 Sterlite estimates for Sales, EBITDA and PAT are
Rs99.5 bn, Rs21.5 bn and Rs11.7 bn, respectively.
Lacklustre results, change in dividend policy is positive
Results were weaker than expected due to lower realisations on metal
sales (premium over LME contracted). Manufacturing costs saw a
$70/t decline, but this was offset mostly by higher royalty and
employee cost; overall costs were flat. Interest income was higher
than expected, and cash balance increased to Rs162 bn (up Rs5.7 bn
QoQ)—FCF was lower due to the advance tax payment.
The board has approved a change in dividend policy: now dividend will
be linked to profits, which is a welcome change considering the limited
use of high cash reserves in the near future. The interim dividend
declared (Rs1.5/share) is 22% of 1H PAT and management plans to
maintain a similar ratio. This is higher than the 9% payout in FY11. With
limited near-term usage of cash, a dividend yield of 2.5% is welcome.
Key takeaways from conference call
● Pb smelter utilisation should reach 85% by 4Q. Once full capacity
ramps up, 10–15 kt concentrate will be purchased externally.
● Silver capacity should reach 500 kt by FY12 end.
● No plans to move Anglo’s assets from Sterlite to HZL as of now.
Reduce target price to Rs152; maintain OUTPERFORM
We expect Zinc prices to remain weak, recovering to $2300 by 2H13.
We have cut our estimates accordingly. Our TP reduces to Rs152.
With 26% potential upside, we maintain our OUTPERFORM rating.
No comments:
Post a Comment