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Monnet Ispat’s 4QFY12 adjusted PAT increased 14% QoQ to INR831m (up 9% YoY) in line with our estimate of
INR880m. Net sales increased 12% QoQ to INR5.4b on account of higher realization.
EBITDA increased 10% QoQ to INR1.4b on account of higher sponge realization and higher power sales volume.
Sponge iron sale realization increased 15% QoQ to INR 24,159/t. Structural steel realization increased 6% QoQ
to INR35,174/t. Scarcity of key inputs ( iron ore and coal) and higher prices has resulted in capacity shutdowns
from secondary producers. This is supporting higher prices for sponge iron and steel.
Sponge iron production was higher by 1% QoQ to 196kt while sales were lower by 2% QoQ to 158kt.
Coal production increased 15% QoQ to 214kt on a lower base of 3QFY12 when production was affected by the
temporary rise in overburden removal ratio. Monnet now has permission to mine 1.7mtpa (earlier 1mtpa).
Power generation also increased 22% QoQ to 226mu with increased coal supply. Power realization increased
3% QoQ to INR3.56/kwh.
Landed cost of iron ore was higher by 6% QoQ to INR6,761/t.
Interest cost was up 29% QoQ to INR243m mainly on account of capitalization of 80MW power plant.
1.5mtpa steel expansion is expected by Oct-2012 except for pellet and coke oven plant. Monnet Power’s
1,050MW project’s phase 1 is expected by October 2013. Net debt in standalone entity is INR30b.
Monnet has rich portfolio of coal allotted for its foray into power generation business. On successful completion
project will give superior returns on account saving on fuel cost due to captive mine. However execution
remains the key for monetizing such large coal assets.
The stock is trading at FY13E P/E of 8.6xand EV/EBTIDA of 10.1x. Maintain Neutral.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Monnet Ispat’s 4QFY12 adjusted PAT increased 14% QoQ to INR831m (up 9% YoY) in line with our estimate of
INR880m. Net sales increased 12% QoQ to INR5.4b on account of higher realization.
EBITDA increased 10% QoQ to INR1.4b on account of higher sponge realization and higher power sales volume.
Sponge iron sale realization increased 15% QoQ to INR 24,159/t. Structural steel realization increased 6% QoQ
to INR35,174/t. Scarcity of key inputs ( iron ore and coal) and higher prices has resulted in capacity shutdowns
from secondary producers. This is supporting higher prices for sponge iron and steel.
Sponge iron production was higher by 1% QoQ to 196kt while sales were lower by 2% QoQ to 158kt.
Coal production increased 15% QoQ to 214kt on a lower base of 3QFY12 when production was affected by the
temporary rise in overburden removal ratio. Monnet now has permission to mine 1.7mtpa (earlier 1mtpa).
Power generation also increased 22% QoQ to 226mu with increased coal supply. Power realization increased
3% QoQ to INR3.56/kwh.
Landed cost of iron ore was higher by 6% QoQ to INR6,761/t.
Interest cost was up 29% QoQ to INR243m mainly on account of capitalization of 80MW power plant.
1.5mtpa steel expansion is expected by Oct-2012 except for pellet and coke oven plant. Monnet Power’s
1,050MW project’s phase 1 is expected by October 2013. Net debt in standalone entity is INR30b.
Monnet has rich portfolio of coal allotted for its foray into power generation business. On successful completion
project will give superior returns on account saving on fuel cost due to captive mine. However execution
remains the key for monetizing such large coal assets.
The stock is trading at FY13E P/E of 8.6xand EV/EBTIDA of 10.1x. Maintain Neutral.
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