Sesa Goa Strong headwinds to impact performance HOLD :Emkay

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Sesa Goa

Strong headwinds to impact performance

HOLD

CMP: Rs200                                        Target Price: Rs191

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n     APAT at Rs 6.9 bn includes Rs 1.2 bn contribution from Cairn India. Core APAT of Rs 5.7 bn was down by 47% YoY. The company has declared interim dividend of Rs 2/share

n     EBITDA at Rs 9.1 bn was down 26% YoY. EBITDA/ tonne for iron ore business stood at ~US$41 as against US$47 during Q3FY11 on higher export duty (at 20%) on iron ore

n     Topline up 16% YoY at Rs 26.2 bn on higher sales volume of 5.04 mt (4.78 mt Q3FY11) and better realizations (Rs 4743/ tonne) boosted by sharp depreciation in INR

n     Considering strong regulatory headwinds we reduce our FY13 volume assumptions. Core FY13 EPS now stands at Rs 22 (down 6%). Reduce our SOTP target price to Rs 191; Hold