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Apr-Jun 2013 Earnings Preview
Tata Steel
Rating
Reduce
Price (Rs) 260
Target Price (Rs) 270
M/Cap (Rs bn) 252.5
Shares o/s (m) 971.4
Standalone net revenue (incl. other operating income) is expected to decline 13%
QoQ on account of 12.2% fall in volumes and 0.8% (Rs313/t) decline in realisations.
Thanks to lower volumes and weak realisations, EBITDA/t would decline 3% QoQ
(Rs407/t) at Rs13,355. Hence, EBITDA would decline 15.5% QoQ at Rs27.9bn, while,
PAT would grow 0.6% QoQ at Rs13.2bn on account of 630bps fall in tax rate.
Key Figures (Rs m) ‐ Consolidated
Y/e March FY13 FY14E FY15E
Net Sales 1,347,115 1,443,096 1,521,833
EBITDA 123,212 148,791 163,274
Margin (%) 9.1 10.3 10.7
PAT 3,323 24,323 34,528
EPS (Rs) 3.4 25.0 35.5
Growth (%) (83.6) 632.0 42.0
RoE (%) 0.9 7.0 9.6
PE (x) 76.0 10.4 7.3
P / BV (x) 0.7 0.7 0.7
EV / E (x) 6.9 6.0 5.6
Quarterly Table (Rs m) ‐ Standalone
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 93,698 89,080 5.2 107,705 432,560 381,994 13.2
EBITDA 27,910 27,798 0.4 33,040 124,778 111,262 12.1
Margin (%) 29.8 31.2 (142)bps 30.7 28.8 29.1 (28)bps
Reported PAT 13,174 13,566 (2.9) 13,092 61,391 50,630 21.3
PAT (Excl. Ex Items) 13,178 13,566 (2.9) 13,092 61,391 43,884 39.9
Operating Metrics
Sales volume (m tonnes) 2.0 1.6 26.1 2.3 8.6 7.5 14.8
Realisation / Tonne (Rs) 35,514 40,650 (12.6) 35,827 36,150 37,784 (4.3)
EBITDA / Tonne (Rs) 13,955 17,527 (20.4) 14,498 14,514 14,863 (2.3)
Tata Steel
Rating
Reduce
Price (Rs) 260
Target Price (Rs) 270
M/Cap (Rs bn) 252.5
Shares o/s (m) 971.4
Key Figures (Rs m) ‐ Consolidated
Y/e March FY13 FY14E FY15E
Net Sales 1,347,115 1,443,096 1,521,833
EBITDA 123,212 148,791 163,274
Margin (%) 9.1 10.3 10.7
PAT 3,323 24,323 34,528
EPS (Rs) 3.4 25.0 35.5
Growth (%) (83.6) 632.0 42.0
RoE (%) 0.9 7.0 9.6
PE (x) 76.0 10.4 7.3
P / BV (x) 0.7 0.7 0.7
EV / E (x) 6.9 6.0 5.6
Tata Steel Europe’s (TSE) EBITDA/t is expected by US$22 QoQ at US$11 on account
of higher iron ore cost and lower scale. Thanks to lower earnings in both domestic
and TSE, we expect consolidated EBITDA to decline 31% QoQ at Rs30.1bn. We expect
loss of Rs14m as against profit of Rs8.8bn and Rs6bn in Q4FY13 and Q1FY13,
respectively.
Quarterly Table (Rs m) – Consolidated
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 297,791 338,212 (12.0) 346,505 1,444,801 1,347,115 7.3
EBITDA 30,138 34,033 (11.4) 43,689 150,491 123,212 22.1
Margin (%) 10.1 10.1 6 bps 12.6 10.4 9.1 127 bps
Reported PAT (14) 5,979 (100.2) (65,285) 28,623 (70,576) (140.6)
PAT (Excl. Ex Items) (14) 5,979 (100.2) 8,843 28,623 3,323 761.5
Operating Metrics
Sales Vol.-Corus (mt) 3.3 3.2 2.8 3.4 13.7 13.1 4.8
EBITDA/Tn-Corus (US$) 11 35 (67.9) 33 25 11 135.8
Sales Vol.-South East
(mt)
0.8 0.7 11.1
0.8 3.3 3.0 8.6
EBITDA/Tn-SEAN (US$) 42.0 23.6 77.9 51.7 30.0 29.1 3.2
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