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JSW Steel
JSW Steel reported net loss of `669cr in 2QFY2012 at a consolidated level on
account of exceptional losses. The company had reported better-than-expected
standalone numbers for 2QFY2012 on October 21, 2011. Consolidated net sales
grew by 37.7% yoy to `8,134cr (slightly above of our estimate of `7,748cr). Net
sales growth was driven by increases in standalone steel volumes (+18.9% yoy to
1.9mn tonnes) and realization (+14.6% yoy to `42,831/tonne). Consolidated
EBITDA increased by 36.6% yoy to `1,383cr. The company reported exceptional
items related to forex loss of `513cr and loss from JSW Ispat (associate company)
of `612cr during the quarter. Consequently, JSW Steel reported net loss of `669cr
in 2QFY2012 compared to net profit of `373cr in 2QFY2011 at a consolidated
level. However, adjusted net profit, excluding exceptional items, increased by
35.5% yoy to `506cr (higher than our estimate of `334cr). JSW Steel’s US
subsidiary produced 0.10mn tonnes of plates and 0.02mn tonnes of pipes. The
company reported EBITDA of US$6.4mn during the quarter. JSW Steel’s Chilean
mine shipped 0.15mn tonnes of iron ore and earned EBITDA of US$7.2mn.
We recommend Accumulate on the stock with a target price of `699.
Jaiprakash Associates
For 2QFY2012, Jaiprakash Associates (JAL) reported better-than-expected
numbers on all fronts. On the top-line front, the company’s revenue increased by
2.0% on a yoy basis to `3,132cr (`3,071cr), in-line with our estimate of `3,097cr.
The cement segment reported growth of 9.6% on a yoy basis; however, revenue of
the construction and real estate segments declined by 1.0% and 37.6%,
respectively, on a yoy basis. EBITDA margin came in at 23.9% (24.7%), down
80bp yoy and marginally ahead of our expectation of 23.3%. Interest cost stood at
`405.4cr (`323.4cr), a jump of 25.2% yoy and lower than our estimate of
`447.7cr. Interest cost declined by 5% on a sequential basis. Depreciation cost
came at `176.1cr, a jump of 15.3% yoy/2.3% qoq and in-line with our estimate of
`180.7cr. The bottom line came in at `128.7cr (`115.5cr), up 11.4% yoy and
against our estimate of `69.2cr due to high other income (`56.0cr) and lowerthan-
expected interest cost. We maintain our Accumulate view on the stock with an
SOTP-based target price of `85.
Bhushan Steel
Bhushan Steel reported its 2QFY2012 results. Net sales grew by 43.4% yoy to
`2,465cr mainly on account of higher volumes of flat products. Flat products sales
volumes grew by 41.7% yoy to 466,748 tonnes, while long product sales volumes
grew by 34.0% yoy to 86,639 tonnes in 2QFY2012. Long product average
realization increased by 19.9% yoy to `45,164/tonne and flat product average
realization increased by 3.7% yoy to `46,701/tonne. EBITDA increased by 47.4%
yoy to `721cr, representing EBITDA margin of 29.2%. EBITDA/tonne increased to
`13,030 in 2QFY2012 compared to `11,848 in 2QFY2011. Depreciation expense
increased by 185.0% yoy to `151cr on account of increased capacity, while
interest expense increased by 200.3% yoy to `302cr due to increased debt.
Consequently, net profit decreased by 20.1% yoy to `207cr. The company
reported exceptional item related to forex loss of `100cr during the quarter.
Excluding this exceptional item, the company’s net profit grew by 18.5% yoy to
`307cr. We maintain our Neutral view on the stock.
GSPL
Gujarat State Petronet (GSPL) reported its 2QFY2012 results. The company's total
operating revenue increased by 11.0% yoy to `281cr mainly due to higher
realization. Transmission tariff for 2QFY2012 grew by 7.7% yoy to `0.83/scm
mainly due to higher spot volumes during the quarter. Transmission volumes
decreased by 0.3% yoy to 35.2mmscmd. EBITDA grew by 11.3% yoy to `258cr.
During the quarter, depreciation expenses declined by 42.1% to `44cr mainly due
to the decrease in depreciation rate. Interest expenses grew by 39.4% yoy to `34cr
and other income grew by 64.8% yoy to `14cr. Hence, PAT grew by 40.7% yoy
to `129cr. The stock is under review currently.
Areva T&D
Areva T&D announced its 3QCY2011 results, which were below our and street’s
expectations. The top line remained nearly flat on a yoy basis to `1,055cr
(`1,048cr), which was 8.5% lower than our and street’s expectation of `1,153cr.
On the operating front, EBITDAM witnessed lower-than-expected contraction of
241bp yoy to 10.3% (vs. est. 8.0%). Notably, EBITDAM expanded on a qoq basis
by 250bp, which indicates easing of cost pressures, as the company had posted
poor margin of 8.4% and 7.8% in 1QCY2011 and 2QCY2011, respectively.
Nonetheless, flat revenue and margin contraction resulted in a 24.1% yoy decline
in PAT to `47.8cr (`63.0cr). We would like to hear management’s commentary on
future outlook and get more details over the quarterly numbers, post which we will
revise our estimates and recommendation. At the CMP, the stock trades at rich
valuations of 26.2x and 18.5x its CY2011E and CY2012E EPS, respectively.
Currently, the stock is under review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JSW Steel
JSW Steel reported net loss of `669cr in 2QFY2012 at a consolidated level on
account of exceptional losses. The company had reported better-than-expected
standalone numbers for 2QFY2012 on October 21, 2011. Consolidated net sales
grew by 37.7% yoy to `8,134cr (slightly above of our estimate of `7,748cr). Net
sales growth was driven by increases in standalone steel volumes (+18.9% yoy to
1.9mn tonnes) and realization (+14.6% yoy to `42,831/tonne). Consolidated
EBITDA increased by 36.6% yoy to `1,383cr. The company reported exceptional
items related to forex loss of `513cr and loss from JSW Ispat (associate company)
of `612cr during the quarter. Consequently, JSW Steel reported net loss of `669cr
in 2QFY2012 compared to net profit of `373cr in 2QFY2011 at a consolidated
level. However, adjusted net profit, excluding exceptional items, increased by
35.5% yoy to `506cr (higher than our estimate of `334cr). JSW Steel’s US
subsidiary produced 0.10mn tonnes of plates and 0.02mn tonnes of pipes. The
company reported EBITDA of US$6.4mn during the quarter. JSW Steel’s Chilean
mine shipped 0.15mn tonnes of iron ore and earned EBITDA of US$7.2mn.
We recommend Accumulate on the stock with a target price of `699.
Jaiprakash Associates
For 2QFY2012, Jaiprakash Associates (JAL) reported better-than-expected
numbers on all fronts. On the top-line front, the company’s revenue increased by
2.0% on a yoy basis to `3,132cr (`3,071cr), in-line with our estimate of `3,097cr.
The cement segment reported growth of 9.6% on a yoy basis; however, revenue of
the construction and real estate segments declined by 1.0% and 37.6%,
respectively, on a yoy basis. EBITDA margin came in at 23.9% (24.7%), down
80bp yoy and marginally ahead of our expectation of 23.3%. Interest cost stood at
`405.4cr (`323.4cr), a jump of 25.2% yoy and lower than our estimate of
`447.7cr. Interest cost declined by 5% on a sequential basis. Depreciation cost
came at `176.1cr, a jump of 15.3% yoy/2.3% qoq and in-line with our estimate of
`180.7cr. The bottom line came in at `128.7cr (`115.5cr), up 11.4% yoy and
against our estimate of `69.2cr due to high other income (`56.0cr) and lowerthan-
expected interest cost. We maintain our Accumulate view on the stock with an
SOTP-based target price of `85.
Bhushan Steel
Bhushan Steel reported its 2QFY2012 results. Net sales grew by 43.4% yoy to
`2,465cr mainly on account of higher volumes of flat products. Flat products sales
volumes grew by 41.7% yoy to 466,748 tonnes, while long product sales volumes
grew by 34.0% yoy to 86,639 tonnes in 2QFY2012. Long product average
realization increased by 19.9% yoy to `45,164/tonne and flat product average
realization increased by 3.7% yoy to `46,701/tonne. EBITDA increased by 47.4%
yoy to `721cr, representing EBITDA margin of 29.2%. EBITDA/tonne increased to
`13,030 in 2QFY2012 compared to `11,848 in 2QFY2011. Depreciation expense
increased by 185.0% yoy to `151cr on account of increased capacity, while
interest expense increased by 200.3% yoy to `302cr due to increased debt.
Consequently, net profit decreased by 20.1% yoy to `207cr. The company
reported exceptional item related to forex loss of `100cr during the quarter.
Excluding this exceptional item, the company’s net profit grew by 18.5% yoy to
`307cr. We maintain our Neutral view on the stock.
GSPL
Gujarat State Petronet (GSPL) reported its 2QFY2012 results. The company's total
operating revenue increased by 11.0% yoy to `281cr mainly due to higher
realization. Transmission tariff for 2QFY2012 grew by 7.7% yoy to `0.83/scm
mainly due to higher spot volumes during the quarter. Transmission volumes
decreased by 0.3% yoy to 35.2mmscmd. EBITDA grew by 11.3% yoy to `258cr.
During the quarter, depreciation expenses declined by 42.1% to `44cr mainly due
to the decrease in depreciation rate. Interest expenses grew by 39.4% yoy to `34cr
and other income grew by 64.8% yoy to `14cr. Hence, PAT grew by 40.7% yoy
to `129cr. The stock is under review currently.
Areva T&D
Areva T&D announced its 3QCY2011 results, which were below our and street’s
expectations. The top line remained nearly flat on a yoy basis to `1,055cr
(`1,048cr), which was 8.5% lower than our and street’s expectation of `1,153cr.
On the operating front, EBITDAM witnessed lower-than-expected contraction of
241bp yoy to 10.3% (vs. est. 8.0%). Notably, EBITDAM expanded on a qoq basis
by 250bp, which indicates easing of cost pressures, as the company had posted
poor margin of 8.4% and 7.8% in 1QCY2011 and 2QCY2011, respectively.
Nonetheless, flat revenue and margin contraction resulted in a 24.1% yoy decline
in PAT to `47.8cr (`63.0cr). We would like to hear management’s commentary on
future outlook and get more details over the quarterly numbers, post which we will
revise our estimates and recommendation. At the CMP, the stock trades at rich
valuations of 26.2x and 18.5x its CY2011E and CY2012E EPS, respectively.
Currently, the stock is under review.
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