Please Share:: 
Usha Martin’s Kathautia coal block has extracted coal output to the tune
of ~2.0 Million tones till date from the date of commencement of mine.
Hence as per the recent SC ruling for the Kathautia coal block Usha
Martin’s outgo with respect to the penalty will be to the tune of ~| 60
crore .
Elevated debt levels an area of concern
Usha Martin’s debt levels have notably increased over the last couple of
years. UML’s gross debt has increased from | 2959.4 crore in FY12 to
| 3694.3 crore in FY13 and further to | 3743.3 crore in FY14. On account
of an increase in debt levels, UML’s debt-equity ratio has worsened over
the last couple of years. The D/E ratio of UML has increased from 1.6x
during FY12 to ~1.9x during FY14E. As on 30th June 2014 Gross Debt and
Net Debt on a consolidated basis stands at | 4057 and | 3910 crore
respectively. As on 30th June 2014 Gross Debt and Net Debt on a
standalone basis stands at | 3753 and | 3648 crore respectively.
Subdued capacity utilisation level
Over the last couple of years sub-optimal business conditions like
continuing slowdown in the domestic auto sector (specifically in medium
and heavy commercial vehicle segment) has kept sales volumes of UML
under pressure. Subsequently, a muted demand scenario has led to
subdued capacity utilisations levels. During FY14, UML operated its billet
capacity at ~64% on account of the slowdown in demand from the key
user industry segment.
Dropping coverage….
We have a cautious view on UML on the back of de-allocation of coal
block and elevated debt levels. Post de-allocation, the Company will meet
its requirement of coal from alternative sources which will impact UML’s
cost of production and profitability. Furthermore, going forward we
expect interest and depreciation cost to stay on elevated levels which is
likely to weigh on bottomline. Hence we are dropping coverage on the
stock.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
-->
Usha Martin’s Kathautia coal block has extracted coal output to the tune
of ~2.0 Million tones till date from the date of commencement of mine.
Hence as per the recent SC ruling for the Kathautia coal block Usha
Martin’s outgo with respect to the penalty will be to the tune of ~| 60
crore .
Elevated debt levels an area of concern
Usha Martin’s debt levels have notably increased over the last couple of
years. UML’s gross debt has increased from | 2959.4 crore in FY12 to
| 3694.3 crore in FY13 and further to | 3743.3 crore in FY14. On account
of an increase in debt levels, UML’s debt-equity ratio has worsened over
the last couple of years. The D/E ratio of UML has increased from 1.6x
during FY12 to ~1.9x during FY14E. As on 30th June 2014 Gross Debt and
Net Debt on a consolidated basis stands at | 4057 and | 3910 crore
respectively. As on 30th June 2014 Gross Debt and Net Debt on a
standalone basis stands at | 3753 and | 3648 crore respectively.
Subdued capacity utilisation level
Over the last couple of years sub-optimal business conditions like
continuing slowdown in the domestic auto sector (specifically in medium
and heavy commercial vehicle segment) has kept sales volumes of UML
under pressure. Subsequently, a muted demand scenario has led to
subdued capacity utilisations levels. During FY14, UML operated its billet
capacity at ~64% on account of the slowdown in demand from the key
user industry segment.
Dropping coverage….
We have a cautious view on UML on the back of de-allocation of coal
block and elevated debt levels. Post de-allocation, the Company will meet
its requirement of coal from alternative sources which will impact UML’s
cost of production and profitability. Furthermore, going forward we
expect interest and depreciation cost to stay on elevated levels which is
likely to weigh on bottomline. Hence we are dropping coverage on the
stock.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://content.icicidirect.com/mailimages/IDirect_UshaMartin_Q1FY15_update.pdf
No comments:
Post a Comment