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Result Update
GSFC
Reco: ACCUMULATE
CMP: Rs 388
Target Price: Rs 530
Results inline; maintain Accumulate
· GSFC reported in line performance- sales of Rs 13bn, 6% yoy, APAT of Rs 1.7bn, -15% yoy. EBITDA margins declined 590bps yoy/410bps qoq to 19.8% due to lower chemical margins
· Fertiliser EBIT margin at 15.3% (est 13%) was ahead of est while chemical margin at 26.6% (est 28%)was lower than est. Decline in chemical margins is in line with decline in spreads
· Caprolactam-benzene spread bounced back to $1710/mt in Jan'12 compared to low of $1480/mt in Dec’11. However, est remain unchanged as we had factored spreads of $1700/mt
· Earnings have started decelerating from Q3FY12 due to decline in spreads. We maintain Accum with TP of Rs 530 despite attractive valuations due to declining trend in spread
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Result Update
GSFC
Reco: ACCUMULATE
CMP: Rs 388
Target Price: Rs 530
Results inline; maintain Accumulate
· GSFC reported in line performance- sales of Rs 13bn, 6% yoy, APAT of Rs 1.7bn, -15% yoy. EBITDA margins declined 590bps yoy/410bps qoq to 19.8% due to lower chemical margins
· Fertiliser EBIT margin at 15.3% (est 13%) was ahead of est while chemical margin at 26.6% (est 28%)was lower than est. Decline in chemical margins is in line with decline in spreads
· Caprolactam-benzene spread bounced back to $1710/mt in Jan'12 compared to low of $1480/mt in Dec’11. However, est remain unchanged as we had factored spreads of $1700/mt
· Earnings have started decelerating from Q3FY12 due to decline in spreads. We maintain Accum with TP of Rs 530 despite attractive valuations due to declining trend in spread
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