Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JSP's 2Q12 EBITDA was 10% above our estimate of Rs15.4bn, driven by strong performance of
the steel division. However, we cut our FY12/13 estimates by 14% each due to delays in ramp-up
of the 1,350MW power plant and 2MT Angul steel plant. JSP remains our top pick in the steel
space. Maintain Buy.
2QFY12: strong steel performance beats our expectations
Jindal Steel and Power’s (JSP) consolidated net revenues of Rs44.2bn, up 44% yoy and 12%
qoq, were driven by higher steel volumes and realisations. Steel revenues were Rs36.3bn, up
65% yoy and 19% qoq, and power revenues were Rs9.6bn, down 9% qoq, with lower PLF of
92.5% due to a maintenance shutdown at the 1000MW plant. Steel product sales were up 29%
yoy and 31% qoq at 598kt and pellet sales were up 52% qoq at 526kt. Captive power sales were
222MU vs 259MU in 1Q. Driven by higher-than-expected steel volumes, EBITDA was Rs17.0bn,
up 14% yoy and 5% qoq, 10% higher than our forecast of Rs15.4bn. Adjusted net profit was
Rs9.6bn. Steel’s share of total EBIT was 67% – the highest since 1QFY09, when the 1000MW
plant was not fully commissioned.
1350MW CPP ramp-up has been delayed; 2400MW Tamnar II is on track
Of the 10 CPP units at Raigarh and Angul, three units of 135MW each have been commissioned
so far. However, the units are taking time to stabilise; hence, power sales are yet to ramp up.
Management still expects to commission the remaining units by March 2012, but we factor in
delays. We expect lead times to decline with each unit, as JSP gets familiar with the middlingbased
technology. We forecast sales of 1,104MU in FY12 and 3,666MU in FY13. The 2400MW
plant is on schedule to be commissioned by FY14, though there is no coal linkage for 1200MW
yet. The 1000MW plant continues to operate at full capacity and generate stable cash flows. We
forecast average tariffs of Rs4 per unit for FY12/FY13.
Maintain Buy with a new TP of Rs670
We cut our FY12/FY13 EPS forecasts by 14% each, given the delayed commissioning of the
1350MW CPP, our higher coking coal price forecasts and our revised assumptions of other costs.
We value the steel business at 5.5x FY13F EV/EBITDA (vs 7.5x earlier) due to a fall in peer
average multiples (see Table 4) and use DCF to value the power businesses. Maintain Buy with a
new SoTP-based TP of Rs670 (down from Rs800).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JSP's 2Q12 EBITDA was 10% above our estimate of Rs15.4bn, driven by strong performance of
the steel division. However, we cut our FY12/13 estimates by 14% each due to delays in ramp-up
of the 1,350MW power plant and 2MT Angul steel plant. JSP remains our top pick in the steel
space. Maintain Buy.
2QFY12: strong steel performance beats our expectations
Jindal Steel and Power’s (JSP) consolidated net revenues of Rs44.2bn, up 44% yoy and 12%
qoq, were driven by higher steel volumes and realisations. Steel revenues were Rs36.3bn, up
65% yoy and 19% qoq, and power revenues were Rs9.6bn, down 9% qoq, with lower PLF of
92.5% due to a maintenance shutdown at the 1000MW plant. Steel product sales were up 29%
yoy and 31% qoq at 598kt and pellet sales were up 52% qoq at 526kt. Captive power sales were
222MU vs 259MU in 1Q. Driven by higher-than-expected steel volumes, EBITDA was Rs17.0bn,
up 14% yoy and 5% qoq, 10% higher than our forecast of Rs15.4bn. Adjusted net profit was
Rs9.6bn. Steel’s share of total EBIT was 67% – the highest since 1QFY09, when the 1000MW
plant was not fully commissioned.
1350MW CPP ramp-up has been delayed; 2400MW Tamnar II is on track
Of the 10 CPP units at Raigarh and Angul, three units of 135MW each have been commissioned
so far. However, the units are taking time to stabilise; hence, power sales are yet to ramp up.
Management still expects to commission the remaining units by March 2012, but we factor in
delays. We expect lead times to decline with each unit, as JSP gets familiar with the middlingbased
technology. We forecast sales of 1,104MU in FY12 and 3,666MU in FY13. The 2400MW
plant is on schedule to be commissioned by FY14, though there is no coal linkage for 1200MW
yet. The 1000MW plant continues to operate at full capacity and generate stable cash flows. We
forecast average tariffs of Rs4 per unit for FY12/FY13.
Maintain Buy with a new TP of Rs670
We cut our FY12/FY13 EPS forecasts by 14% each, given the delayed commissioning of the
1350MW CPP, our higher coking coal price forecasts and our revised assumptions of other costs.
We value the steel business at 5.5x FY13F EV/EBITDA (vs 7.5x earlier) due to a fall in peer
average multiples (see Table 4) and use DCF to value the power businesses. Maintain Buy with a
new SoTP-based TP of Rs670 (down from Rs800).
No comments:
Post a Comment