*Higher input costs and a one-time payment on LTC kept SAIL’s net profit much below consensus and our estimate. *
***Revenues in line; growth on higher volumes. *In line with our Rs101bn estimate, SAIL reported 19.7% yoy growth in net revenue, to Rs108bn. Sales volumes, at 2.75m tons, were up 18% yoy, due to the low base. Blended realizations grew 3.2% yoy (1% qoq), to Rs39,313 a ton. *EBITDA hit due to costs and one-off increase in staff costs. *EBITDA dropped 31% yoy, to ~Rs12bn, due to higher coking-coal costs and a rise in staff costs yoy. EBITDA margin was 11.1% (the lowest in the last several quarters). Staff costs (up 12% yoy, 9.7% qoq) climbed on a 10% increase in DA (due to the rise in inflation) and a Rs2.4bn one-time payment on account of leave travel concessions (LTA). EBITDA margin should improve qoq. *Reported net profit down ~29%. *Reported net profit declined ~29% yoy, to Rs8.4bn, much below consensus and our estimate. Adjusting for the one-off though, profit was more ore less in line. *Valuation and Risks.* At the current market price (Rs126), SAIL trades at FY12e EV/EBITDA of 6x. This quarter has been its worst, and we expect better profitability, qoq, led by lower costs and stable prices. Key risks remain: delay in expansions; higher-than-expected coking-coal costs. *Safe Harbor Statement:* *Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.* ** *Nothing in this article is, or should be construed as, investment advice.** * ** * * ** ** -- For Anything related with Stock market be Online at http://www.niftyviews.com/ Get free updates on your mobile phone. Sms "Join TSR " and send to 09223492234 FOR TRIAL STOCK/NIFTY/OPTION CALLS You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group. To post to this group, send an email to [email protected] To unsubscribe email [email protected] for more info visit http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB . This is Not a Spam Mail. Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture."
