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http://content.icicidirect.com/mailimages/ICICIdirect_VisaSteel_Q3FY12.pdf
D i s m a l p e r f o r m a n c e …
Visa Steel (VSL) reported a dismal set of numbers for Q3FY12, primarily
on the back of higher operating costs and constraints in supply of raw
materials in Odisha. The topline came at | 384.2 crore (our estimate: |
393.5 crore), which was higher by 10.8% YoY and 55.6% QoQ. On the
back of higher operating costs, the EBITDA margin sharply declined 1270
bps YoY and 350 bps QoQ to 0.8%. As a result, the ensuing EBITDA
during the period under review stood at | 3.2 crore (our estimate: | 47.5
crore), sharply lower both YoY as well as QoQ. The interest cost also
increased sharply by 59.7% YoY and 13.4% QoQ to | 30.7 crore. On the
back of a steep decline in the rupee against the US dollar, there was net
unrealised MTM loss to the tune of | 33.3 crore due to restatement of
foreign currency monetary items. As a result, the ensuing resulting net
loss during the period under review stood at | 38.9 crore.
ƒ Performance impacted by constraints in supply of raw materials
The performance during the quarter under review was impacted on
account of raw materials side constraints in Odisha. As a result, the
sales volumes of pig iron were lower by 75% QoQ and 46% YoY.
Consequently, the utilisation of SMS mill was subdued during
Q3FY12. However, the coke sales volumes were higher by 63% QoQ
and 93% YoY.
V a l u a t i o n
At the CMP of | 59, the stock is discounting FY12E and FY13E EV/EBITDA
by 16.4x and 5.4x, respectively. We have valued the stock on FY13E
EV/EBITDA multiple of 5.0x giving us a target price of | 54 and have
maintained our HOLD rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_VisaSteel_Q3FY12.pdf
D i s m a l p e r f o r m a n c e …
Visa Steel (VSL) reported a dismal set of numbers for Q3FY12, primarily
on the back of higher operating costs and constraints in supply of raw
materials in Odisha. The topline came at | 384.2 crore (our estimate: |
393.5 crore), which was higher by 10.8% YoY and 55.6% QoQ. On the
back of higher operating costs, the EBITDA margin sharply declined 1270
bps YoY and 350 bps QoQ to 0.8%. As a result, the ensuing EBITDA
during the period under review stood at | 3.2 crore (our estimate: | 47.5
crore), sharply lower both YoY as well as QoQ. The interest cost also
increased sharply by 59.7% YoY and 13.4% QoQ to | 30.7 crore. On the
back of a steep decline in the rupee against the US dollar, there was net
unrealised MTM loss to the tune of | 33.3 crore due to restatement of
foreign currency monetary items. As a result, the ensuing resulting net
loss during the period under review stood at | 38.9 crore.
ƒ Performance impacted by constraints in supply of raw materials
The performance during the quarter under review was impacted on
account of raw materials side constraints in Odisha. As a result, the
sales volumes of pig iron were lower by 75% QoQ and 46% YoY.
Consequently, the utilisation of SMS mill was subdued during
Q3FY12. However, the coke sales volumes were higher by 63% QoQ
and 93% YoY.
V a l u a t i o n
At the CMP of | 59, the stock is discounting FY12E and FY13E EV/EBITDA
by 16.4x and 5.4x, respectively. We have valued the stock on FY13E
EV/EBITDA multiple of 5.0x giving us a target price of | 54 and have
maintained our HOLD rating on the stock.
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