Bhushan Steel - Fixed costs continue to weigh : :Emkay

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Bhushan Steel

Fixed costs continue to weigh

HOLD

CMP: Rs322                                        Target Price: Rs315

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n     Topline above our expectations at Rs 24.7 bn, up 43% YoY and 11% QoQ, mainly backed by 34% YoY and 13% QoQ growth in sales volume to 5.53 lakh tonne

n     Operating performance also remained better with EBITDA at Rs 7.2 bn, up 47% YoY and 9% QoQ. EBITDA/ tonne stood at Rs 13030, down 4% QoQ but up 10% YoY      

n     Despite good margins APAT stood at Rs 2.1 bn, down 20% YoY and flat QoQ, because of higher interest costs and lower other income for the quarter

n     FY12E and FY13E EPS stand at Rs 42 and Rs 47 respectively.  Cutting our target EV/ EBITDA multiple to 5x for FY13E, which translates to a target price of Rs 315/ share. Maintain Hold