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Consolidated EBITDA and PAT of Jindal Steel and Power (JSPL) were 4%
and 15.7% respectively, above estimates (despite lower steel volume)
due to a strong performance by the power business (both JPL and
standalone). In the standalone entity, while steel and pellet sales volume
dipped 1.2% and 11.8%QoQ respectively, power sales and power EBIT
surged 57.7% and 32%QoQ to 350 MU and INR1,413mn respectively. JPL’s
power sales volume was up 10.4%QoQ at 2.06 bn units along with a
10.2%QoQ increase in blended tariff at INR3.9/unit. We maintain
‘BUY/SO’ with a price target of INR661 per share.
Stand‐alone steel business: Volume disappoints
Steel and pellet sales volume declined 1.2% and 11.8% QoQ to 591kt and 464kt (vs our
assumption of steel: 643kt, pellet: 563kt). However, metallics, steel and pellet
production volume increased 2.4%, 20.2% and 4.5%QoQ respectively, leading to
inventory accumulation. Yet with costs at 9% lower than our expectation, EBITDA was
8.8% above our estimates. PAT was 12.2% above our estimates due to lower capital
charges.
Stand‐alone power business: Generation, EBIT up
Power sales at 350 MU (our assumption: 222MU) and EBIT surged 57.7% and 32% QoQ
to 350MU and INR1,413mn respectively. This improved performance signifies a
profitable ramp up of the 3 x 135MW power units. JSPL has commissioned three units
of 135MW each in January 2012, taking the total units commissioned so far to six.
Performance better than our estimates
Jindal Power (JPL) sold 2.06bn units at a blended tariff of INR3.9/unit (up 10.2% QoQ)
against our estimate of 2.04 bn units and INR 3.75/unit. As a result, revenue and PAT at
INR 8bn and INR 4.8bn were 4.4% and 14.1% higher than our estimate respectively.
Outlook and valuations: Maintain ‘BUY/SO’
While our FY13E EBITDA remains unchanged, we upgrade our PAT estimate by 9% due
to lower interest cost. Also introducing our FY14 earnings estimates with PAT growth of
~6% YoY. We continue to maintain BUY/SO with a target price of INR661.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Consolidated EBITDA and PAT of Jindal Steel and Power (JSPL) were 4%
and 15.7% respectively, above estimates (despite lower steel volume)
due to a strong performance by the power business (both JPL and
standalone). In the standalone entity, while steel and pellet sales volume
dipped 1.2% and 11.8%QoQ respectively, power sales and power EBIT
surged 57.7% and 32%QoQ to 350 MU and INR1,413mn respectively. JPL’s
power sales volume was up 10.4%QoQ at 2.06 bn units along with a
10.2%QoQ increase in blended tariff at INR3.9/unit. We maintain
‘BUY/SO’ with a price target of INR661 per share.
Stand‐alone steel business: Volume disappoints
Steel and pellet sales volume declined 1.2% and 11.8% QoQ to 591kt and 464kt (vs our
assumption of steel: 643kt, pellet: 563kt). However, metallics, steel and pellet
production volume increased 2.4%, 20.2% and 4.5%QoQ respectively, leading to
inventory accumulation. Yet with costs at 9% lower than our expectation, EBITDA was
8.8% above our estimates. PAT was 12.2% above our estimates due to lower capital
charges.
Stand‐alone power business: Generation, EBIT up
Power sales at 350 MU (our assumption: 222MU) and EBIT surged 57.7% and 32% QoQ
to 350MU and INR1,413mn respectively. This improved performance signifies a
profitable ramp up of the 3 x 135MW power units. JSPL has commissioned three units
of 135MW each in January 2012, taking the total units commissioned so far to six.
Performance better than our estimates
Jindal Power (JPL) sold 2.06bn units at a blended tariff of INR3.9/unit (up 10.2% QoQ)
against our estimate of 2.04 bn units and INR 3.75/unit. As a result, revenue and PAT at
INR 8bn and INR 4.8bn were 4.4% and 14.1% higher than our estimate respectively.
Outlook and valuations: Maintain ‘BUY/SO’
While our FY13E EBITDA remains unchanged, we upgrade our PAT estimate by 9% due
to lower interest cost. Also introducing our FY14 earnings estimates with PAT growth of
~6% YoY. We continue to maintain BUY/SO with a target price of INR661.
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