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Tata Steel
Tata Steel reported disappointing profitability for 2QFY2012. Consolidated net
sales increased by 14.5% yoy to `32,798cr (above our estimate of `30,936cr)
mainly on account of increased average realizations. Tata Steel India’s net sales
increased by 15.7% yoy to `81,42cr. Tata Steel India operations sales volumes
decreased by 0.7% yoy to 1.65mn tonnes, while Tata Steel Europe (TSE) operations
sales volumes decreased by 1.7% yoy to 3.48mn tonnes in 2QFY2012. Tata Steel
India’s average realization/tonne increased by 18.6% yoy to `46,402, while TSE’s
average realization/tonne decreased by 1.0% yoy to US$1,148 on account of
subdued demand in Europe. EBITDA/tonne decreased by 19.1% and 47.0% yoy to
US$365 and US$30 in Tata Steel India and TSE operations, respectively, as
increased realization (at India operations) was more than offset by higher rawmaterial
costs. Consolidated EBITDA decreased by 25.1% yoy to `2,750cr. Other
income decreased to `120cr compared to `814cr in 2QFY2011. The company
reported exceptional forex loss of `150cr in 2QFY2012. Adjusting for exceptional
items, adjusted net profit decreased by 81.4% yoy to `362cr, significantly below
our estimate of `1,339cr. Consolidated reported net profit stood at `212cr
compared to `1,979cr in 2QFY2011. Standalone net profit decreased by 27.6%
yoy to `1,495cr. Consolidated net debt stood at US$8.4bn as on September 30,
2011. We maintain our Buy rating on the stock; our target price is under review.
DLF
DLF announced its 2QFY2012 numbers. The company’s net sales increased by
6.9% yoy to `2,532cr (`2,369cr), below our estimate of `2,674cr. EBITDA came in
at `1,173cr, up 26.3% yoy, on the back of strong margin expansion. OPM
expanded by 711bp yoy to 46.3%, which was above our estimate of 43.0%. PAT
declined by 11.0% yoy to `372cr, which was slightly below our estimate of `399cr.
The decline in PAT was largely due to higher tax rate during the quarter, which
increased to 28.6% of PBT in 2QFY2012 vs. 14.9% of PBT in 2QFY2011. We
continue to maintain our Neutral recommendation on the stock. We may revise
our estimates and target price post management’s concall.
Hindalco
Hindalco and Novelis reported their 2QFY2012 results separately. Hindalco’s
standalone net sales increased by 7.2% yoy to `6,220cr, driven by increased
realization. However, EBITDA decreased by 4.2% yoy to `669cr on account of
rising costs of power, driven by increased coal prices. Power costs grew by 31.1%
yoy to `753cr. Thus, EBITDA margin slipped by 128bp yoy to 10.8% in
2QFY2012. Other income grew by 114.5% yoy to `176cr. Tax rate stood at 16.8%
compared to 22.0% in 2QFY2011. Consequently, net profit increased by 15.8%
yoy to `503cr. Hindalco has delayed its completion timeline of Mahan Aluminium
smelter to early CY2012 (CY2011-end earlier).
Novelis' net sales grew by 14.1% yoy to US$2,880mn, driven by increased
realization. However, EBITDA decreased modestly by 0.9% yoy to US$228mn on
account of increased cost of goods sold, which grew by 16.5% yoy to
US$2,549mn. The company’s tax expense stood at US$(7)mn compared to
US$56mn in 2QFY2011. Consequently, net profit grew 140.0% yoy to US$120mn
in 2QFY2012.
We maintain our our Buy rating on Hindalco; our target is price under review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tata Steel
Tata Steel reported disappointing profitability for 2QFY2012. Consolidated net
sales increased by 14.5% yoy to `32,798cr (above our estimate of `30,936cr)
mainly on account of increased average realizations. Tata Steel India’s net sales
increased by 15.7% yoy to `81,42cr. Tata Steel India operations sales volumes
decreased by 0.7% yoy to 1.65mn tonnes, while Tata Steel Europe (TSE) operations
sales volumes decreased by 1.7% yoy to 3.48mn tonnes in 2QFY2012. Tata Steel
India’s average realization/tonne increased by 18.6% yoy to `46,402, while TSE’s
average realization/tonne decreased by 1.0% yoy to US$1,148 on account of
subdued demand in Europe. EBITDA/tonne decreased by 19.1% and 47.0% yoy to
US$365 and US$30 in Tata Steel India and TSE operations, respectively, as
increased realization (at India operations) was more than offset by higher rawmaterial
costs. Consolidated EBITDA decreased by 25.1% yoy to `2,750cr. Other
income decreased to `120cr compared to `814cr in 2QFY2011. The company
reported exceptional forex loss of `150cr in 2QFY2012. Adjusting for exceptional
items, adjusted net profit decreased by 81.4% yoy to `362cr, significantly below
our estimate of `1,339cr. Consolidated reported net profit stood at `212cr
compared to `1,979cr in 2QFY2011. Standalone net profit decreased by 27.6%
yoy to `1,495cr. Consolidated net debt stood at US$8.4bn as on September 30,
2011. We maintain our Buy rating on the stock; our target price is under review.
DLF
DLF announced its 2QFY2012 numbers. The company’s net sales increased by
6.9% yoy to `2,532cr (`2,369cr), below our estimate of `2,674cr. EBITDA came in
at `1,173cr, up 26.3% yoy, on the back of strong margin expansion. OPM
expanded by 711bp yoy to 46.3%, which was above our estimate of 43.0%. PAT
declined by 11.0% yoy to `372cr, which was slightly below our estimate of `399cr.
The decline in PAT was largely due to higher tax rate during the quarter, which
increased to 28.6% of PBT in 2QFY2012 vs. 14.9% of PBT in 2QFY2011. We
continue to maintain our Neutral recommendation on the stock. We may revise
our estimates and target price post management’s concall.
Hindalco
Hindalco and Novelis reported their 2QFY2012 results separately. Hindalco’s
standalone net sales increased by 7.2% yoy to `6,220cr, driven by increased
realization. However, EBITDA decreased by 4.2% yoy to `669cr on account of
rising costs of power, driven by increased coal prices. Power costs grew by 31.1%
yoy to `753cr. Thus, EBITDA margin slipped by 128bp yoy to 10.8% in
2QFY2012. Other income grew by 114.5% yoy to `176cr. Tax rate stood at 16.8%
compared to 22.0% in 2QFY2011. Consequently, net profit increased by 15.8%
yoy to `503cr. Hindalco has delayed its completion timeline of Mahan Aluminium
smelter to early CY2012 (CY2011-end earlier).
Novelis' net sales grew by 14.1% yoy to US$2,880mn, driven by increased
realization. However, EBITDA decreased modestly by 0.9% yoy to US$228mn on
account of increased cost of goods sold, which grew by 16.5% yoy to
US$2,549mn. The company’s tax expense stood at US$(7)mn compared to
US$56mn in 2QFY2011. Consequently, net profit grew 140.0% yoy to US$120mn
in 2QFY2012.
We maintain our our Buy rating on Hindalco; our target is price under review.
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