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P A T i m p a c t e d b y M T M …
Steel Authority of India’ (SAIL) Q2FY12 PAT was below our expectation
primarily due to MTM (Mark to Market) forex loss. The topline came at |
10979.6 crore (our estimate: | 11644.3 crore), which was 1.6% higher
YoY and flattish QoQ. Sales volumes stood at ~2.8 million tonnes (MT),
which was flat QoQ. However, on the back of higher input costs, the
EBITDA margin declined 360 bps YoY to 12.1%. The subsequent EBITDA
stood at | 1327.1 crore (our estimate: | 1282.2 crore), which was 21.7%
lower YoY but 1.2% higher QoQ. During the quarter under review, there
was MTM forex loss of | 508.7 crore on account of rupee depreciation
leading to a negative effect on short-term foreign currency loans. The
impact on account of foreign exchange variation is notional in nature. As
a result, the ensuing reported PAT stood at | 494.2 crore, which was
54.6% lower YoY and 41.0% QoQ.
ƒ Volumes, realisation & EBITDA/tonne remain flat QoQ
The realisation during the quarter under review stood at | 39212.9
per tonne, which was flattish on a sequential basis but an increase
of 9.6% YoY. Sales volumes during the quarter under review stood
at ~2.8 MT (Q1FY12: ~2.75 MT while in Q2FY11 it was ~3.0 MT).
The EBITDA/tonne during Q2FY12 stood at | 4754/tonne as
compared to | 4775/tonne in Q1FY12 and | 5619/tonne in Q2FY11.
The EBITDA/tonne during the quarter under review was flat on a
sequential basis but declined by 15% YoY.
V a l u a t i o n
At the CMP of | 120, the stock is trading at FY13E PE of 10.9x and 1.1x
FY13E P/BV. Factoring in the concerns on delay in commissioning and
higher raw material prices, we have valued the stock at 5.5x EV/EBITDA
FY13E to arrive at a target price of | 120 and assigned a HOLD rating to
the stock
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P A T i m p a c t e d b y M T M …
Steel Authority of India’ (SAIL) Q2FY12 PAT was below our expectation
primarily due to MTM (Mark to Market) forex loss. The topline came at |
10979.6 crore (our estimate: | 11644.3 crore), which was 1.6% higher
YoY and flattish QoQ. Sales volumes stood at ~2.8 million tonnes (MT),
which was flat QoQ. However, on the back of higher input costs, the
EBITDA margin declined 360 bps YoY to 12.1%. The subsequent EBITDA
stood at | 1327.1 crore (our estimate: | 1282.2 crore), which was 21.7%
lower YoY but 1.2% higher QoQ. During the quarter under review, there
was MTM forex loss of | 508.7 crore on account of rupee depreciation
leading to a negative effect on short-term foreign currency loans. The
impact on account of foreign exchange variation is notional in nature. As
a result, the ensuing reported PAT stood at | 494.2 crore, which was
54.6% lower YoY and 41.0% QoQ.
ƒ Volumes, realisation & EBITDA/tonne remain flat QoQ
The realisation during the quarter under review stood at | 39212.9
per tonne, which was flattish on a sequential basis but an increase
of 9.6% YoY. Sales volumes during the quarter under review stood
at ~2.8 MT (Q1FY12: ~2.75 MT while in Q2FY11 it was ~3.0 MT).
The EBITDA/tonne during Q2FY12 stood at | 4754/tonne as
compared to | 4775/tonne in Q1FY12 and | 5619/tonne in Q2FY11.
The EBITDA/tonne during the quarter under review was flat on a
sequential basis but declined by 15% YoY.
V a l u a t i o n
At the CMP of | 120, the stock is trading at FY13E PE of 10.9x and 1.1x
FY13E P/BV. Factoring in the concerns on delay in commissioning and
higher raw material prices, we have valued the stock at 5.5x EV/EBITDA
FY13E to arrive at a target price of | 120 and assigned a HOLD rating to
the stock
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