BUY Godawari Power & Ispat - Good show; fixed costs to be a concern ::Emkay

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Godawari Power & Ispat

Good show; fixed costs to be a concern

BUY

CMP: Rs151                                        Target Price: Rs210

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n     Results ahead of our estimates; Standalone topline at Rs 4.2 bn, up 28% QoQ, Consolidated revenues stand at Rs 4.94 bn, down 9% QoQ. YoY figures not comparable due to mergers 

n     Absolute EBITDA (cons) remain higher than estimates at Rs 759 mn, down 33% QoQ. EBITDA margin also contracted 549 bps QoQ to 15.4% 

n     Sequential fall in depreciation, interest costs and tax expenses helped the company to post APAT of Rs 310 mn, down 32% QoQ

n     Operational performance to be challenged by higher fixed costs; Cutting FY12E and FY13E EPS to Rs 35.1 and Rs 41.7 respectively; Valuation still cheap, maintain Buy