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Apr-Jun 2013 Earnings Preview
JSW Steel
Rating
Reduce
Price (Rs) 604
Target Price (Rs) 650
M/Cap (Rs bn) 134.7
Shares o/s (m) 223.0
Adjusted for merger of JSW-Ispat, JSW Steel’s realisation is expected to fall 1.2% or
Rs440/t at Rs36,290. While, volumes would decline 8% QoQ decline at 2.7m tonnes.
Given the low margin profile of JSW-Ispat’s operations and weak realisations,
consolidated EBITDA/t is expected to fall 10% QoQ at Rs6294. While, on like-to-likebasis,
EBITDA/t is expected to fall 3.6% QoQ at Rs6320. EBITDA is expected to decline
10% QoQ at Rs16.9bn on a like-to-like basis and flat on reported basis. We expect
adjusted consolidated PAT at Rs4bn.
Key Figures (Rs m) ‐ Consolidated
Y/e March FY13 FY14E FY15E
Net Sales 380,949 395,892 426,960
EBITDA 63,892 69,170 75,190
Margin (%) 16.8 17.5 17.6
PAT 12,126 17,221 20,637
EPS (Rs) 54.3 77.2 92.6
Growth (%) 10.7 42.1 19.9
RoE (%) 7.1 9.5 10.5
PE (x) 11.1 7.8 6.5
P / BV (x) 0.8 0.7 0.7
EV / E (x) 6.1 5.6 4.9
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 107,527 99,020 8.6 98,515 395,892 380,949 3.9
EBITDA 16,932 19,006 (10.9) 16,865 69,170 63,892 8.3
Margin (%) 15.7 19.2 (345)bps 17.1 17.5 16.8 70 bps
Reported PAT (3,152) 497 (734.9) 2,959 17,221 9,631 78.8
PAT (Excl. Ex Items) 4,065 4,515 63.6 2,485 17,221 12,126 42.0
Operating Metrics
Sales Vol. (mt) 2.7 2.1 27.5 2.4 9.1 8.9 2.4
Rea lisation / tonne (Rs) 36,290 42,817 (15.2) 38,218 35,651 35,320 0.9
EBITDA / tonne (Rs ) 6,294 9,012 (30.2) 6,969 7,378 6,997 5.4
SAIL
Rating
Reduce
Price (Rs) 48
Target Price (Rs) 54
M/Cap (Rs bn) 197.4
Shares o/s (m) 4,130.5
Net revenue is expected to decline 16.4% QoQ on account of 16.4% decline in
volume and flat realisations. We expect volumes of 2.7m tonnes and realizations at
Rs37,655 for the quarter. EBITDA/tonne is expected to decline 5.5% (Rs127) QoQ at
Rs2,182 on account of lower realisations and volumes. Adjusted PAT is expected to
decline 51% QoQ at Rs2.14bn.
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 439,611 455,942 529,765
EBITDA 40,397 50,764 67,458
Margin (%) 9.2 11.1 12.7
PAT 23,999 21,592 25,667
EPS (Rs) 5.8 5.2 6.2
Growth (%) (35.6) (10.0) 18.9
RoE (%) 5.9 5.2 6.0
PE (x) 8.2 9.1 7.7
P / BV (x) 0.5 0.5 0.5
EV / E (x) 9.6 8.8 7.6
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 101,669 106,407 (4.5) 121,625 455,942 439,611 3.7
EBITDA 5,892 13,785 (57.3) 7,459 50,764 40,397 25.7
Margin (%) 5.8 13.0 (716)bps 6.1 11.1 9.2 194 bps
Reported PAT 1,457 6,964 (79.1) 4,469 21,592 21,706 (0.5)
PAT (Excl. Ex Items) 2,137 8,700 (75.4) 4,358 21,592 23,999 (10.0)
Operating Metrics
Sales Vol. (mt) 2.7 2.5 8.0 3.2 11.9 11.1 7.5
Rea l./Tonne (Rs) 37,655 42,563 (11.5) 37,655 36,894 39,346 (6.2)
EBITDA/Tonne (Rs) 2,182 5,514 (60.4) 2,309 4,255 3,639 16.9
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