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D i s m a l p e r f o r m a n c e …
Visa Steel reported a dismal set of numbers for Q2FY12, primarily on the
back of higher operating costs and muted sales volumes. The topline
came at | 246.9 crore (our estimate: | 399.4 crore), which was 25.2%
lower YoY and 32.8 lower QoQ. On the back of higher operating costs,
EBITDA margin sharply declined 880 bps YoY and 790 bps QoQ to 4.3%.
As a result, the ensuing EBITDA during the period under review stood at |
10.5 crore (our estimate: | 52.3 crore), lower by 75.6% YoY and 76.5%
QoQ. The interest cost also increased sharply by 68.2% YoY and 50.2%
QoQ to | 27.1 crore. On the back of a steep decline in rupee against US$,
there was net unrealised loss to the tune of | 38.6 crore arising out of
restatement of foreign currency monetary items. As a result, the ensuing
resulting net loss during the period under review stood at | 38.2 crore.
ƒ Sales volumes lower both YoY as well as QoQ
The sales volumes during the quarter under review were lower both
YoY as well as QoQ. Coke sales volumes during the quarter under
review stood at 42032 tonnes, which was lower by 39% QoQ and
32% YoY while pig iron sales volumes stood at 18957 tonnes, which
was lower by 51% QoQ and 52% YoY. Ferro chrome sales volumes
stood at 4101 tonnes, lower by 23% QoQ and 75% YoY. Sponge
iron sales volumes at 27037 tonnes were lower by 9% QoQ.
V a l u a t i o n
At the CMP of | 58, the stock is discounting FY12E and FY13E EV/EBITDA
by 10.3x and 5.2x, respectively. We have valued the stock on FY13E
EV/EBITDA multiple of 5x giving us a target price of | 53. We have
maintained our HOLD rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
D i s m a l p e r f o r m a n c e …
Visa Steel reported a dismal set of numbers for Q2FY12, primarily on the
back of higher operating costs and muted sales volumes. The topline
came at | 246.9 crore (our estimate: | 399.4 crore), which was 25.2%
lower YoY and 32.8 lower QoQ. On the back of higher operating costs,
EBITDA margin sharply declined 880 bps YoY and 790 bps QoQ to 4.3%.
As a result, the ensuing EBITDA during the period under review stood at |
10.5 crore (our estimate: | 52.3 crore), lower by 75.6% YoY and 76.5%
QoQ. The interest cost also increased sharply by 68.2% YoY and 50.2%
QoQ to | 27.1 crore. On the back of a steep decline in rupee against US$,
there was net unrealised loss to the tune of | 38.6 crore arising out of
restatement of foreign currency monetary items. As a result, the ensuing
resulting net loss during the period under review stood at | 38.2 crore.
ƒ Sales volumes lower both YoY as well as QoQ
The sales volumes during the quarter under review were lower both
YoY as well as QoQ. Coke sales volumes during the quarter under
review stood at 42032 tonnes, which was lower by 39% QoQ and
32% YoY while pig iron sales volumes stood at 18957 tonnes, which
was lower by 51% QoQ and 52% YoY. Ferro chrome sales volumes
stood at 4101 tonnes, lower by 23% QoQ and 75% YoY. Sponge
iron sales volumes at 27037 tonnes were lower by 9% QoQ.
V a l u a t i o n
At the CMP of | 58, the stock is discounting FY12E and FY13E EV/EBITDA
by 10.3x and 5.2x, respectively. We have valued the stock on FY13E
EV/EBITDA multiple of 5x giving us a target price of | 53. We have
maintained our HOLD rating on the stock.
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