BSL is initiating coverage with a buy recommendation and target price of Rs1,979. BSL has extended its presence in the steel value chain through commissioning a 1.9 million tonne HR steel capacity. It is expected to register 26.2% CAGR in volumes over FY2010-15E through completion of expansion plans. BSL's EBITDA/tonne is expected to increase to US$331 in FY2011E due to its strategic relationships with OEMs and investments in the auto sector. The company's debt/equity ratio is expected to decline from 3.3x in FY2009 to 2.0x in FY2012E.
Electrosteel Castings is a leading player in ductile iron pipes in India. The company is expanding into steelmaking through its subsidiary Electrosteel Integrated, which is setting up a 2.2 million tonne steel plant. Electrosteel Castings' backward integration initiatives such as allocating coking coal mines are expected to result in a 1,304 basis point expansion in EBITDA margins from FY2009 to FY2012. Listing Electrosteel Integrated could unlock value for Electrosteel Castings. The analyst initiates coverage on Electrosteel Castings with a Buy recommendation and 18-month target price of Rs72 based on an 8x multiple of FY2012 EPS for the core business and 1x book value
JSW Steel reported lower than expected results for 1QFY2011 with net revenue of Rs4,779cr, down 12.2% quarter-over-quarter due to a decline in sales volume. EBITDA grew 64.7% year-over-year to Rs1,134cr but the margin increased only 646bps to 23.7% due to higher staff costs and other expenses. Net profit was Rs295cr, a 26.2% increase from a year ago but below estimates. JSW Steel finalized a strategic investment deal with JFE Steel worth Rs4,800cr that will help reduce debt and provide access to new technologies. Management expects sales volume and profitability to improve in the coming
BGR Energy has expanded from manufacturing BoP components to executing turnkey BoP projects and full EPC contracts. It has a large order backlog providing revenue visibility. Government plans substantial capacity additions over the next decade, creating huge opportunities for BoP providers. BGR is well positioned as one of few players offering complete turnkey BoP services. It has competitive advantages like in-house manufacturing and engineering capabilities.
- Blue Star reported a 22.6% year-over-year increase in quarterly revenue to Rs875 crore, slightly ahead of estimates. Operating margins were in line with estimates at 12.8%.
- The company has shifted its strategic focus from IT/ITeS and retail segments to hospital, hotel, and infrastructure segments, which have longer execution periods.
- Order inflows increased 43% year-over-year to Rs704 crore for the quarter, indicating an improved outlook. The analyst maintains an "Accumulate" rating with a target price of Rs425.
Sterlite Industries reported net revenue of Rs7,111cr for 4QFY2010, in line with estimates. Net profit was also in line with estimates at Rs1,381cr. Revenue growth was driven by higher metal prices, strong zinc and lead business performance, and higher by-product prices. Sterlite is well positioned to capitalize on strong metal demand through expansion plans and cost reductions. The company also announced a 1:1 bonus issue and stock split.
Bajaj Electricals reported a 19.3% year-over-year increase in quarterly revenue to Rs. 784 crore, slightly ahead of estimates. Revenue growth was driven primarily by the consumer durables division which saw 35.6% growth. However, net profit declined 21.1% to Rs. 37 crore due to additional taxes and a loan write-off. The company maintained a strong order backlog of Rs. 932 crore. While growth outlook remains positive, the analyst maintains a neutral rating given the recent run-up in stock price and expects the stock to trade around 10-12 times estimated earnings.
Tata Steel reported financial results for the first quarter of fiscal year 2011. For the quarter, Tata Steel reported consolidated net revenue of Rs27,195 crore and net profit of Rs1,825 crore. The company's standalone operations saw a 16.5% increase in net revenue compared to the prior year quarter, but a 13.3% decline sequentially due to lower production volumes. Tata Steel's European operations reported a smaller loss than the previous year, with adjusted EBITDA/tonne of US$105 for the quarter. Going forward, the note expects weaker performance from Tata Steel Europe but stronger results from Tata Steel's Indian operations.
Hindustan Construction Company (HCC) reported a 10.8% increase in net sales for the fourth quarter of fiscal year 2010, in line with estimates. However, operating margins of 11.3% disappointed due to four projects not reaching revenue recognition thresholds. While interest costs decreased by 31.8% year-over-year, net profit declined 16.3% due to lower operating margins. The analyst maintains a neutral outlook on HCC stock due to trimmed earnings estimates for fiscal years 2011-2012 but sees potential upside from the planned listing of HCC's Lavasa subsidiary.
Electrosteel Castings is a leading player in ductile iron pipes in India. The company is expanding into steelmaking through its subsidiary Electrosteel Integrated, which is setting up a 2.2 million tonne steel plant. Electrosteel Castings' backward integration initiatives such as allocating coking coal mines are expected to result in a 1,304 basis point expansion in EBITDA margins from FY2009 to FY2012. Listing Electrosteel Integrated could unlock value for Electrosteel Castings. The analyst initiates coverage on Electrosteel Castings with a Buy recommendation and 18-month target price of Rs72 based on an 8x multiple of FY2012 EPS for the core business and 1x book value
JSW Steel reported lower than expected results for 1QFY2011 with net revenue of Rs4,779cr, down 12.2% quarter-over-quarter due to a decline in sales volume. EBITDA grew 64.7% year-over-year to Rs1,134cr but the margin increased only 646bps to 23.7% due to higher staff costs and other expenses. Net profit was Rs295cr, a 26.2% increase from a year ago but below estimates. JSW Steel finalized a strategic investment deal with JFE Steel worth Rs4,800cr that will help reduce debt and provide access to new technologies. Management expects sales volume and profitability to improve in the coming
BGR Energy has expanded from manufacturing BoP components to executing turnkey BoP projects and full EPC contracts. It has a large order backlog providing revenue visibility. Government plans substantial capacity additions over the next decade, creating huge opportunities for BoP providers. BGR is well positioned as one of few players offering complete turnkey BoP services. It has competitive advantages like in-house manufacturing and engineering capabilities.
- Blue Star reported a 22.6% year-over-year increase in quarterly revenue to Rs875 crore, slightly ahead of estimates. Operating margins were in line with estimates at 12.8%.
- The company has shifted its strategic focus from IT/ITeS and retail segments to hospital, hotel, and infrastructure segments, which have longer execution periods.
- Order inflows increased 43% year-over-year to Rs704 crore for the quarter, indicating an improved outlook. The analyst maintains an "Accumulate" rating with a target price of Rs425.
Sterlite Industries reported net revenue of Rs7,111cr for 4QFY2010, in line with estimates. Net profit was also in line with estimates at Rs1,381cr. Revenue growth was driven by higher metal prices, strong zinc and lead business performance, and higher by-product prices. Sterlite is well positioned to capitalize on strong metal demand through expansion plans and cost reductions. The company also announced a 1:1 bonus issue and stock split.
Bajaj Electricals reported a 19.3% year-over-year increase in quarterly revenue to Rs. 784 crore, slightly ahead of estimates. Revenue growth was driven primarily by the consumer durables division which saw 35.6% growth. However, net profit declined 21.1% to Rs. 37 crore due to additional taxes and a loan write-off. The company maintained a strong order backlog of Rs. 932 crore. While growth outlook remains positive, the analyst maintains a neutral rating given the recent run-up in stock price and expects the stock to trade around 10-12 times estimated earnings.
Tata Steel reported financial results for the first quarter of fiscal year 2011. For the quarter, Tata Steel reported consolidated net revenue of Rs27,195 crore and net profit of Rs1,825 crore. The company's standalone operations saw a 16.5% increase in net revenue compared to the prior year quarter, but a 13.3% decline sequentially due to lower production volumes. Tata Steel's European operations reported a smaller loss than the previous year, with adjusted EBITDA/tonne of US$105 for the quarter. Going forward, the note expects weaker performance from Tata Steel Europe but stronger results from Tata Steel's Indian operations.
Hindustan Construction Company (HCC) reported a 10.8% increase in net sales for the fourth quarter of fiscal year 2010, in line with estimates. However, operating margins of 11.3% disappointed due to four projects not reaching revenue recognition thresholds. While interest costs decreased by 31.8% year-over-year, net profit declined 16.3% due to lower operating margins. The analyst maintains a neutral outlook on HCC stock due to trimmed earnings estimates for fiscal years 2011-2012 but sees potential upside from the planned listing of HCC's Lavasa subsidiary.
BGR Energy Systems reported a very strong 4QFY2010 performance, with revenues growing 130.7% and net profit up 130.6% over the previous year. For the full year, revenues grew 59.7% and net profit increased 74.7%. The company maintained a healthy order backlog of Rs10,230cr and expects continued growth in orders. The analyst maintains a Buy recommendation on the stock with a target price of Rs722, noting attractive valuation multiples and expecting revenue and profit to grow at 36.7% and 31.2% CAGR over the next few years.
Bajaj Auto reported strong results for the fourth quarter of fiscal year 2010 that exceeded estimates. Net sales grew 80.5% year-over-year to Rs3,399 crore, driven by an 83.8% increase in volume. Operating profit margin expanded substantially to 22.9% compared to 15.2% in the prior year quarter. Net profit for the quarter was Rs529 crore, up 306% year-over-year and above estimates. For fiscal year 2011, management expects robust volume growth and maintains guidance of 20% operating profit margin despite rising raw material costs.
CESC reported a 2.1% year-over-year growth in net sales to Rs770cr in the fourth quarter of fiscal year 2010, aided by a 1.7% increase in sales volume. The company's operating profit margin improved by 409 basis points to 26% during the quarter, helping net profit rise by 6.4% to Rs100cr. For the full fiscal year 2010, CESC's top-line grew by 8% to Rs3,351cr while bottom-line increased 5.6% to Rs433cr. The analyst maintained a "Buy" recommendation on the stock based on its fiscal year 2012 estimated price-to-earnings ratio of 7.4x and price-to-
CESC reported a 33.7% year-over-year growth in revenue for the first quarter of fiscal year 2011, driven by the commissioning of its new 250MW Budge-Budge power plant. However, operating margins declined from the previous quarter due to a 90.6% year-over-year increase in other expenses. While revenue beat estimates, net profit growth was moderate at 4.8% year-over-year due to higher expenditure, growing at a faster pace than revenues. The company continues construction on its 600MW Chandrapur and Haldia power projects.
The document provides an analysis of Consolidated Construction Consortium's (CCCL) 4QFY2010 results and outlook. Some key points:
- CCCL reported 33.2% revenue growth for 4QFY2010 inline with estimates, but order inflow for FY2010 was below expectations at Rs2,166cr.
- The company's current order book stands at Rs3,392cr, providing 1.4x revenue visibility for FY2011, which is lower than peers.
- The analyst expects 19.2% revenue CAGR for CCCL over FY2010-2012 on the back of its order book and recovery in private capex.
- C
Balrampur Chini Mills' 2QSY2010 results were below expectations due to higher cane costs and increased contribution from mandatory levy sugar quotas. Total sales grew 32% to Rs421 crore driven by strong sugar prices, though margins declined significantly due to raw material costs and levy quotas. The analyst maintains a Neutral rating due to fair valuations and expects sugar prices and industry profitability to stabilize in the coming year.
Larsen & Toubro (L&T) reported modest results for the first quarter of fiscal year 2011 that were below analyst expectations on revenue but positively surprised on margins. Revenue grew 6.4% year-over-year to Rs. 7,885 crore, below estimates, due to flat performance in the engineering and construction segment. However, operating margins expanded significantly by 170 basis points due to lower subcontracting costs. The order backlog remained strong at Rs. 1,07,816 crore as of June 30, 2010 and order inflows were led by the power segment. While most positives are priced into the stock, further upside could come from value unlocking at subsidiary levels.
Axis Bank has announced its 1QFY2011 results. Net profit grew 32.0% to Rs742cr, better than estimates due to higher than expected net interest income. Advances grew robustly by 39.1% year-over-year driven by corporate lending. Deposits also increased strongly by 33.8% year-over-year. While net interest margins declined, operating performance was strong with stable asset quality. The analyst maintains an 'Accumulate' rating and target price of Rs1,477, implying 10% upside.
HDFC Bank reported a 33.9% year-on-year increase in net profit to Rs. 812 crore for the first quarter of FY2011, which was close to analyst estimates. Key highlights included a 40.2% rise in loan advances and an improvement in asset quality. The bank saw robust growth across parameters such as net interest income, deposits, and CASA ratio. While recommending a 'Buy' rating, analysts believe HDFC Bank is well positioned for continued high quality growth driven by its expansion plans and improving economic conditions.
McNally Bharat Engineering Co. Ltd. (MBE) reported disappointing financial results for the first quarter of fiscal year 2011, with revenues, earnings, and margins coming in below previous estimates. While MBE's order backlog remains strong at Rs. 4,803 crores, providing high revenue visibility, its subsidiary McNally Sayaji also saw subdued performance. However, analysts maintain a 'Buy' recommendation due to MBE's experience in various sectors, ongoing government infrastructure spending, and significant projected market opportunities over the next few years totaling Rs. 51,600 crores. Estimates have been revised downward to account for the weak quarterly performance.
NTPC reported a 7.9% year-over-year increase in net sales for the fourth quarter of fiscal year 2010, slightly ahead of estimates. Operating profit grew 1.9% year-over-year due to a 2.3% increase in sales volumes from commissioning new plants and higher plant load factors, though margins declined. Net profit declined 4.5% due to one-time provisions and lower interest rates. The analyst maintains an "Accumulate" rating and target price of Rs230, seeing continued growth from NTPC's regulated business model and expansion plans offset by potential project delays.
Hindalco's subsidiary Novelis reported strong results for 4QFY2010. Top-line grew 24.8% year-over-year to US $2.42 billion as sales volumes increased 16.1% year-over-year. Adjusted EBITDA spiked 336% year-over-year to US $231 million. Novelis is focusing on increasing capacity in emerging markets, announcing plans to expand capacity in Brazil by 50% at a cost of US $300 million. Following the expiration of Novelis's metal price ceiling contracts and expected benefits from price increases and cost savings, the report maintains a "Buy" recommendation on Hindalco.
Sterlite Industries reported lower than expected results for the first quarter of fiscal year 2011. Net revenue grew 30.6% year-over-year to Rs5,925 crore, below Angel Research estimates, due to lower production from planned maintenance shutdowns and resource issues. EBITDA grew 48.3% to Rs1,452 crore but margins expanded less than expected. Net profit increased 49.9% to Rs1,008 crore, also below estimates. Segment performance was mixed, with copper improving but aluminum declining due to cost pressures. The results were impacted by higher costs and lower production than anticipated.
National Aluminium reported a 47.3% year-over-year increase in net revenue to Rs. 1,604 crore for the fourth quarter of fiscal year 2010, exceeding estimates. EBITDA margins expanded substantially by 2,496 basis points year-over-year to 33.7% due to lower raw material, power, and staff costs. As a result, net profit increased 371.5% year-over-year and 152.3% quarter-over-quarter to Rs. 392 crore. However, the analyst maintains a "Sell" rating due to rich valuations compared to peers.
1) HCC reported a 13.6% increase in net sales to Rs.995.4 crore for 1QFY2011, in line with Angel Research estimates. Operating profit grew 9.3% to Rs.125.8 crore.
2) Net profit increased 55.6% to Rs.28.3 crore, marginally ahead of estimates due to higher operating margins and lower taxes.
3) Angel Research maintains a Neutral view on HCC, valuing it at Rs.126/share on an SOTP basis, with limited upside from current levels given its valuation of 36.5x FY2012 EPS.
Hindalco reported strong results for the first quarter of fiscal year 2011. Revenue grew 29.2% year-over-year to Rs. 2,533 crore, driven by a 12.7% increase in aluminum shipments. Adjusted EBITDA more than doubled to Rs. 263 crore, resulting in adjusted EBITDA margins of 10.4%. However, net profit declined 65% to Rs. 50 crore due to higher interest and tax expenses. Management expects continued growth in demand and benefits from capacity expansions. The stock currently trades at attractive valuations and the analyst maintains a Buy rating with a target price of Rs. 204.
Manpower Inc. had record revenues and earnings in 2007. Revenues increased 17% to $20.5 billion while net earnings grew 22% to $484.7 million. The company has diversified its services over the past decade to include specialty services beyond temporary staffing, such as permanent recruitment and leadership development. This has improved profit margins and reduced sensitivity to economic cycles. Investments in new services like recruitment process outsourcing have positioned Manpower for continued growth.
Oriental Bank of Commerce reported a 41.1% rise in net profit for the quarter compared to the same period last year. Net interest income grew 118.4% on strong loan growth of 20.3% and deposit growth of 19.8%. Asset quality was stable with gross and net NPA ratios of 1.7% and 0.7% respectively. The bank upgraded its target price for OBC stock to Rs. 409 based on improved near-term net interest margins and asset quality.
Bajaj Auto reported strong results for the first quarter of fiscal year 2011. The company's top line was marginally above expectations, driven by a 70% year-over-year increase in total volumes. EBITDA margins expanded slightly by 50 basis points year-over-year to 20%. Net profit increased 101% year-over-year to Rs590 crore, beating estimates, aided by higher other income and improved operating leverage. Overall, robust volume growth and margin expansion led to better-than-expected financial performance during the quarter.
Federal Bank reported a 3.3% year-over-year decline in net profit to Rs132cr for the first quarter of fiscal year 2011, lower than estimates due to lower non-interest income and higher provisions. Asset quality pressures emerged as gross and net NPAs increased substantially from the previous quarter. Advances and deposits growth of 16.6% and 10.2% respectively lagged industry averages. CASA deposits grew faster than overall deposits. The bank maintained an Accumulate rating based on attractive valuation and strong core returns, though earnings quality faced pressure from rising NPAs.
For the first quarter of fiscal year 2011 (1QFY2011):
1) Hero Honda's net sales grew 12% year-over-year to Rs. 4,297 crore, in line with estimates, while operating profit fell 7% and net profit declined 2% due to higher input costs.
2) Operating margins decreased significantly to 14% from 17% in the prior year quarter due to a 345 basis point rise in raw material costs.
3) The analyst maintains revenue growth estimates but revises operating margin forecasts lower to account for pressure from increasing raw material prices.
Bosch reported strong results for 2QCY2010, with net sales growing 36% year-over-year to Rs. 1,700 cr, in line with expectations. Operating profit margin expanded by 122 basis points due to lower raw material costs and staff expenses. Net profit for the quarter grew 11% to Rs. 210 cr, broadly in line with estimates. Bosch maintained its Accumulate rating on the stock, expecting continued growth in auto demand to boost earnings in the coming years.
BGR Energy Systems reported a very strong 4QFY2010 performance, with revenues growing 130.7% and net profit up 130.6% over the previous year. For the full year, revenues grew 59.7% and net profit increased 74.7%. The company maintained a healthy order backlog of Rs10,230cr and expects continued growth in orders. The analyst maintains a Buy recommendation on the stock with a target price of Rs722, noting attractive valuation multiples and expecting revenue and profit to grow at 36.7% and 31.2% CAGR over the next few years.
Bajaj Auto reported strong results for the fourth quarter of fiscal year 2010 that exceeded estimates. Net sales grew 80.5% year-over-year to Rs3,399 crore, driven by an 83.8% increase in volume. Operating profit margin expanded substantially to 22.9% compared to 15.2% in the prior year quarter. Net profit for the quarter was Rs529 crore, up 306% year-over-year and above estimates. For fiscal year 2011, management expects robust volume growth and maintains guidance of 20% operating profit margin despite rising raw material costs.
CESC reported a 2.1% year-over-year growth in net sales to Rs770cr in the fourth quarter of fiscal year 2010, aided by a 1.7% increase in sales volume. The company's operating profit margin improved by 409 basis points to 26% during the quarter, helping net profit rise by 6.4% to Rs100cr. For the full fiscal year 2010, CESC's top-line grew by 8% to Rs3,351cr while bottom-line increased 5.6% to Rs433cr. The analyst maintained a "Buy" recommendation on the stock based on its fiscal year 2012 estimated price-to-earnings ratio of 7.4x and price-to-
CESC reported a 33.7% year-over-year growth in revenue for the first quarter of fiscal year 2011, driven by the commissioning of its new 250MW Budge-Budge power plant. However, operating margins declined from the previous quarter due to a 90.6% year-over-year increase in other expenses. While revenue beat estimates, net profit growth was moderate at 4.8% year-over-year due to higher expenditure, growing at a faster pace than revenues. The company continues construction on its 600MW Chandrapur and Haldia power projects.
The document provides an analysis of Consolidated Construction Consortium's (CCCL) 4QFY2010 results and outlook. Some key points:
- CCCL reported 33.2% revenue growth for 4QFY2010 inline with estimates, but order inflow for FY2010 was below expectations at Rs2,166cr.
- The company's current order book stands at Rs3,392cr, providing 1.4x revenue visibility for FY2011, which is lower than peers.
- The analyst expects 19.2% revenue CAGR for CCCL over FY2010-2012 on the back of its order book and recovery in private capex.
- C
Balrampur Chini Mills' 2QSY2010 results were below expectations due to higher cane costs and increased contribution from mandatory levy sugar quotas. Total sales grew 32% to Rs421 crore driven by strong sugar prices, though margins declined significantly due to raw material costs and levy quotas. The analyst maintains a Neutral rating due to fair valuations and expects sugar prices and industry profitability to stabilize in the coming year.
Larsen & Toubro (L&T) reported modest results for the first quarter of fiscal year 2011 that were below analyst expectations on revenue but positively surprised on margins. Revenue grew 6.4% year-over-year to Rs. 7,885 crore, below estimates, due to flat performance in the engineering and construction segment. However, operating margins expanded significantly by 170 basis points due to lower subcontracting costs. The order backlog remained strong at Rs. 1,07,816 crore as of June 30, 2010 and order inflows were led by the power segment. While most positives are priced into the stock, further upside could come from value unlocking at subsidiary levels.
Axis Bank has announced its 1QFY2011 results. Net profit grew 32.0% to Rs742cr, better than estimates due to higher than expected net interest income. Advances grew robustly by 39.1% year-over-year driven by corporate lending. Deposits also increased strongly by 33.8% year-over-year. While net interest margins declined, operating performance was strong with stable asset quality. The analyst maintains an 'Accumulate' rating and target price of Rs1,477, implying 10% upside.
HDFC Bank reported a 33.9% year-on-year increase in net profit to Rs. 812 crore for the first quarter of FY2011, which was close to analyst estimates. Key highlights included a 40.2% rise in loan advances and an improvement in asset quality. The bank saw robust growth across parameters such as net interest income, deposits, and CASA ratio. While recommending a 'Buy' rating, analysts believe HDFC Bank is well positioned for continued high quality growth driven by its expansion plans and improving economic conditions.
McNally Bharat Engineering Co. Ltd. (MBE) reported disappointing financial results for the first quarter of fiscal year 2011, with revenues, earnings, and margins coming in below previous estimates. While MBE's order backlog remains strong at Rs. 4,803 crores, providing high revenue visibility, its subsidiary McNally Sayaji also saw subdued performance. However, analysts maintain a 'Buy' recommendation due to MBE's experience in various sectors, ongoing government infrastructure spending, and significant projected market opportunities over the next few years totaling Rs. 51,600 crores. Estimates have been revised downward to account for the weak quarterly performance.
NTPC reported a 7.9% year-over-year increase in net sales for the fourth quarter of fiscal year 2010, slightly ahead of estimates. Operating profit grew 1.9% year-over-year due to a 2.3% increase in sales volumes from commissioning new plants and higher plant load factors, though margins declined. Net profit declined 4.5% due to one-time provisions and lower interest rates. The analyst maintains an "Accumulate" rating and target price of Rs230, seeing continued growth from NTPC's regulated business model and expansion plans offset by potential project delays.
Hindalco's subsidiary Novelis reported strong results for 4QFY2010. Top-line grew 24.8% year-over-year to US $2.42 billion as sales volumes increased 16.1% year-over-year. Adjusted EBITDA spiked 336% year-over-year to US $231 million. Novelis is focusing on increasing capacity in emerging markets, announcing plans to expand capacity in Brazil by 50% at a cost of US $300 million. Following the expiration of Novelis's metal price ceiling contracts and expected benefits from price increases and cost savings, the report maintains a "Buy" recommendation on Hindalco.
Sterlite Industries reported lower than expected results for the first quarter of fiscal year 2011. Net revenue grew 30.6% year-over-year to Rs5,925 crore, below Angel Research estimates, due to lower production from planned maintenance shutdowns and resource issues. EBITDA grew 48.3% to Rs1,452 crore but margins expanded less than expected. Net profit increased 49.9% to Rs1,008 crore, also below estimates. Segment performance was mixed, with copper improving but aluminum declining due to cost pressures. The results were impacted by higher costs and lower production than anticipated.
National Aluminium reported a 47.3% year-over-year increase in net revenue to Rs. 1,604 crore for the fourth quarter of fiscal year 2010, exceeding estimates. EBITDA margins expanded substantially by 2,496 basis points year-over-year to 33.7% due to lower raw material, power, and staff costs. As a result, net profit increased 371.5% year-over-year and 152.3% quarter-over-quarter to Rs. 392 crore. However, the analyst maintains a "Sell" rating due to rich valuations compared to peers.
1) HCC reported a 13.6% increase in net sales to Rs.995.4 crore for 1QFY2011, in line with Angel Research estimates. Operating profit grew 9.3% to Rs.125.8 crore.
2) Net profit increased 55.6% to Rs.28.3 crore, marginally ahead of estimates due to higher operating margins and lower taxes.
3) Angel Research maintains a Neutral view on HCC, valuing it at Rs.126/share on an SOTP basis, with limited upside from current levels given its valuation of 36.5x FY2012 EPS.
Hindalco reported strong results for the first quarter of fiscal year 2011. Revenue grew 29.2% year-over-year to Rs. 2,533 crore, driven by a 12.7% increase in aluminum shipments. Adjusted EBITDA more than doubled to Rs. 263 crore, resulting in adjusted EBITDA margins of 10.4%. However, net profit declined 65% to Rs. 50 crore due to higher interest and tax expenses. Management expects continued growth in demand and benefits from capacity expansions. The stock currently trades at attractive valuations and the analyst maintains a Buy rating with a target price of Rs. 204.
Manpower Inc. had record revenues and earnings in 2007. Revenues increased 17% to $20.5 billion while net earnings grew 22% to $484.7 million. The company has diversified its services over the past decade to include specialty services beyond temporary staffing, such as permanent recruitment and leadership development. This has improved profit margins and reduced sensitivity to economic cycles. Investments in new services like recruitment process outsourcing have positioned Manpower for continued growth.
Oriental Bank of Commerce reported a 41.1% rise in net profit for the quarter compared to the same period last year. Net interest income grew 118.4% on strong loan growth of 20.3% and deposit growth of 19.8%. Asset quality was stable with gross and net NPA ratios of 1.7% and 0.7% respectively. The bank upgraded its target price for OBC stock to Rs. 409 based on improved near-term net interest margins and asset quality.
Bajaj Auto reported strong results for the first quarter of fiscal year 2011. The company's top line was marginally above expectations, driven by a 70% year-over-year increase in total volumes. EBITDA margins expanded slightly by 50 basis points year-over-year to 20%. Net profit increased 101% year-over-year to Rs590 crore, beating estimates, aided by higher other income and improved operating leverage. Overall, robust volume growth and margin expansion led to better-than-expected financial performance during the quarter.
Federal Bank reported a 3.3% year-over-year decline in net profit to Rs132cr for the first quarter of fiscal year 2011, lower than estimates due to lower non-interest income and higher provisions. Asset quality pressures emerged as gross and net NPAs increased substantially from the previous quarter. Advances and deposits growth of 16.6% and 10.2% respectively lagged industry averages. CASA deposits grew faster than overall deposits. The bank maintained an Accumulate rating based on attractive valuation and strong core returns, though earnings quality faced pressure from rising NPAs.
For the first quarter of fiscal year 2011 (1QFY2011):
1) Hero Honda's net sales grew 12% year-over-year to Rs. 4,297 crore, in line with estimates, while operating profit fell 7% and net profit declined 2% due to higher input costs.
2) Operating margins decreased significantly to 14% from 17% in the prior year quarter due to a 345 basis point rise in raw material costs.
3) The analyst maintains revenue growth estimates but revises operating margin forecasts lower to account for pressure from increasing raw material prices.
Bosch reported strong results for 2QCY2010, with net sales growing 36% year-over-year to Rs. 1,700 cr, in line with expectations. Operating profit margin expanded by 122 basis points due to lower raw material costs and staff expenses. Net profit for the quarter grew 11% to Rs. 210 cr, broadly in line with estimates. Bosch maintained its Accumulate rating on the stock, expecting continued growth in auto demand to boost earnings in the coming years.
Hindalco Result Update 4 qfy2010-110510Angel Broking
Hindalco reported financial results for the fourth quarter of fiscal year 2010. Net sales increased 45.3% over the same quarter of the previous year due to higher aluminum and copper prices. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins expanded significantly due to higher prices, though copper production declined because a smelter was shut down. Overall results were ahead of estimates due to lower interest costs and a tax benefit. The company is increasing aluminum production capacity substantially in the next few years and is well positioned to benefit from expected growth in aluminum demand and its low production costs.
Hindustan Zinc reported strong financial results for the fourth quarter of fiscal year 2010. Net revenues were ahead of estimates due to higher sales of silver and zinc/lead concentrates. Net profit grew 124.7% year-over-year to Rs1,239cr, in line with estimates, driven by rising metal prices and increased production volumes. The analyst maintains an "Accumulate" rating and target price of Rs1,399, believing the company is well-positioned to benefit from expanding capacity and higher silver output.
MPL Result Update 4qfy2010-030510-finalAngel Broking
Madhucon Projects reported disappointing results for the fourth quarter of fiscal year 2010 that were below expectations. While revenue grew robustly due to higher subcontracting in the power segment, operating margins hit a historical low of 6.4% due to the heavy subcontracting. The analyst maintains a "Buy" rating but lowers the target price to Rs. 190 per share based on revised estimates factoring in lower margins and a higher holding company discount applied to the valuation of Madhucon Infra subsidiary. Near-term revenue visibility comes from existing power segment orders but margins are expected to remain under pressure from ongoing subcontracting.
Elecon Engineering is a leading provider of material handling equipment and gear solutions in India. It has a 26% market share in the domestic gear market, making it the leader. The company is well positioned to benefit from an estimated Rs32,500 crore of opportunities in the material handling equipment industry over the next few years, driven by growth in core sectors like power, steel, and coal. Elecon's order book and revenues are expected to grow at a CAGR of 40% and 13.5%, respectively, during FY2010-12, supported by a recovery in industrial activity and capital expenditures. The company's strong position in the stable gear market also helps support its profitability.
Elecon Engineering is a leading provider of material handling equipment and gear solutions in India. The company is well positioned to benefit from increasing industrial capital expenditures in sectors like power and steel. The analyst estimates Elecon will grow sales at a CAGR of 13.5% and adjusted profits at 37% over fiscal years 2010-2012 due to improving financials and recovery in the material handling equipment industry. The report initiates coverage on Elecon with a buy recommendation and target price of Rs102 based on attractive valuations and growth opportunities.
Motherson Sumi Systems (MSSL) reported a 32% year-over-year increase in net sales to Rs. 1,905 crores for the first quarter of fiscal year 2011, below expectations. Operating margins increased 370 basis points year-over-year to 9.8% but fell short of expectations and declined sequentially. Net profit for the quarter came in below expectations at Rs. 60 crores due to lower-than-expected revenue growth and margins. Management indicated input costs and currency impacts would be gradually passed on to customers, and the analyst maintains an 'Accumulate' rating while lowering the target price.
JK Tyre reported net sales growth of 23% year-over-year for the quarter, but profit was below expectations due to a substantial increase in raw material costs. Raw material prices increased significantly both quarter-over-quarter and year-over-year, squeezing operating margins. The company has plans to expand capacity across segments to capitalize on demand growth and offset rising input costs, with most new capacity coming online in 2011-2012.
1) For 1QFY2011, Punj Lloyd posted disappointing results with net sales declining 41.7% year-over-year. Operating profits declined 56.1% and the company reported a net loss of Rs 30.6 crore.
2) The top-line was lower than expected, leading the company to downgrade its FY2011 and FY2012 revenue estimates. Problem orders like Ensus and Heera are now out of the picture.
3) While past performance was weak, the outlook is more positive as slow-moving orders have picked up and most challenges are now behind the company. With many negatives priced in, the analyst maintains a "Buy" rating on expectations of improved performance in F
Bhushan Steel reported lower sales volume in 1QFY2011 compared to the previous quarter, however average gross realizations increased. Despite lower top-line performance, margins expanded due to lower raw material costs. Net profit increased by 19.7% year-over-year due to margin expansion, though it declined 14.6% sequentially. The analyst maintains a 'Buy' recommendation and sees volumes growing over the next few years as expansion plans are completed.
1) Monnet Ispat & Energy reported an 18% year-over-year increase in net sales to Rs420 crore for the first quarter of FY2011 due to higher realizations in steel sales.
2) EBITDA margins dipped slightly by 138 basis points to 28.8% despite sales growth, due to a 27.5% rise in raw material costs from higher iron ore prices.
3) Net profit grew by 18.7% year-over-year to Rs73 crore for the quarter, in line with top-line growth, as interest expenses declined.
Graphite india - Initiating Coverage 28.04.10Angel Broking
Graphite India is the world's fifth largest manufacturer of graphite electrodes, a key input for electric arc furnace (EAF) steel production. The graphite electrode industry is expected to rebound with EAF steel production growing at a 10.8% CAGR from 2009-2011 as production shut down during the recession resumes. Graphite India is well positioned to benefit from this growth with its capacity expansion plans. The company also enjoys a strong labor cost advantage versus global peers which should support margin expansion going forward as capacity additions taper off and a greater portion of the cost benefit is retained. The analyst initiates coverage with a buy rating and 12-month target price of Rs117 per share.
Gateway Distriparks reported quarterly results that were marginally below estimates. Revenue growth was driven by a 24.2% year-over-year increase in the higher-margin Rail business. However, CFS revenues fell 9.2% due to a fire. Profits increased significantly due to tax write backs. While funds from Blackstone were slightly delayed, management expects funds in the next quarter and for Rail to break even on profits this fiscal year. Falling market share at a key container terminal remains a concern.
Aurobindo Pharma has transformed from a low-margin API player to a high-margin formulation player. The company is expected to see net sales and recurring profits grow at a CAGR of 15.6% and 29.1% through FY2012 due to supply agreements with Pfizer and AstraZeneca, growth in the US market, and their ARV formulation business. The report initiates coverage on Aurobindo Pharma with a buy recommendation and a target price of Rs. 1,330, representing growth potential of 18.7%
Sarda Energy and Minerals reported strong results for the first quarter of fiscal year 2011. Net sales grew 132.8% year-over-year to Rs217 crore due to higher sales volumes and realizations of sponge iron and ferro alloys. EBITDA grew 973.2% year-over-year to Rs50 crore as margins expanded significantly due to lower raw material costs from captive coal and iron ore supplies. Adjusted net profit increased to Rs27 crore from a loss of Rs7 crore in the prior year quarter. The company is well positioned to benefit from backward integration, commercial production of pellets, and increased production of power and ferro alloys.
Godawari Power & Ispat reported mediocre results for the first quarter of FY2011 with net sales falling 9.6% year-over-year to Rs196 crore due to reduced sponge iron production and lower steel sales. EBITDA margins grew 383 basis points year-over-year to 18.4% but fell 119 basis points quarter-over-quarter due to higher coal and iron ore costs. Net profit declined 12.8% year-over-year to Rs13 crore. The brokerage maintains a 'Buy' rating with a revised target price of Rs313, expecting earnings to grow at a 93.6% CAGR through FY2012 given ramped up iron
1) Finolex Cables reported a 50.4% year-over-year increase in net sales to Rs. 493.1 crore for the first quarter of FY2011, driven by strong growth in the electrical cables segment.
2) Operating margins declined to 8% from 15.2% in the prior year quarter due to higher raw material costs, though margins improved sequentially.
3) Net profit increased 4.5% year-over-year to Rs. 23 crore for the quarter despite margin pressure, with sales growth offsetting higher costs.
Consolidated Construction Consortium (CCCL) reported net sales of Rs.508 crore for 1QFY2011, in line with expectations. Operating margins of 8.3% and net profits of Rs.18.8 crore were also as expected. Order inflows grew 152% year-over-year to Rs.1,706 crore, indicating a revival in commercial and infrastructure segments. CCCL maintains an order backlog of Rs.4,527 crore, providing visibility for the next few years. While margins and profits met estimates this quarter, analysts maintain an 'Accumulate' rating given strong order backlog and expected 20% earnings growth over FY2010-12.
Sadbhav Engineering reported a 42% increase in net sales and 83.8% increase in net profit for the first quarter of fiscal year 2011 compared to the previous year. The company saw robust growth due to a rise in order book over the last few quarters and has guided for over 35% revenue growth over the next 12 months. However, the analyst downgraded the stock to Reduce due to rich valuations and concerns over potential execution challenges due to a record high order backlog.
The Indian markets are expected to open higher, tracking gains in most Asian markets. Spain has asked for a bailout of up to €100 billion for its banking system. Chinese exports grew more than expected in May. In India, shares extended gains for a fifth session despite weak global cues as major central banks held off on additional stimulus. The key support and resistance levels for the Nifty are 5,023 and 5,114 respectively. L&T has bagged orders worth Rs. 483 crore to build commercial vessels in Qatar. Vedanta Resources has acquired a 24.5% stake in Raykal Aluminium for Rs. 201 crore.
Axis Bank reported a 27.0% year-over-year increase in net profit to Rs. 942 crore for the first quarter of fiscal year 2012, in line with analyst estimates. Business growth momentum slowed as advances declined 7.4% quarter-over-quarter and deposits fell 3.0% quarter-over-quarter, moderating the bank's cash-deposit ratio to 40.5% from 41.1% last quarter. However, asset quality remained healthy with slippage ratio declining to 0.8% and gross and net NPA ratios stable.
1) For 1QFY2012, Electrosteel Castings reported 16.4% sales growth but margins declined due to higher raw material costs. EBITDA fell 18.2% and net profit declined 7.2%.
2) While sales volumes grew, costs increased more due to a rise in raw material costs as a percentage of sales.
3) The company maintains a buy recommendation due to initiatives in steelmaking and backward integration that should lower costs starting in FY2013 and valuation remains attractive.
1) For 1QFY2012, Persistent Systems reported revenues of ₹224 crore, up 5.2% over the previous quarter and 23.6% over the same period last year.
2) EBITDA was ₹40 crore, up 5.3% over the previous quarter but margins declined.
3) PAT was ₹28 crore, down 16.8% over the previous quarter due to higher taxes.
4) Management maintained revenue guidance of 29% growth for FY2012 and expects PAT to remain flat despite higher tax rates.
HT Media reported a 22.7% year-over-year increase in revenue to ₹494 crore for the first quarter of FY2012. Revenue was also up 5.8% quarter-over-quarter. Advertising revenue grew 17% year-over-year, with 18% growth in English and 15% growth in Hindi. Operating profit rose 11.8% year-over-year to ₹87.8 crore due to higher other income and lower tax rates, although operating margins contracted by 174 basis points. The company maintained its Accumulate rating based on expectations of continued revenue growth and margin expansion.
The summary is:
1) The derivative report analyzes the performance of the Nifty futures, options, and key stocks from the previous trading session on July 18, 2011.
2) It provides details on changes in open interest, premium levels, volatility, and turnover for various derivatives contracts.
3) Trading strategies and technical analysis is also given for some stocks along with risk-reward profiles of sample spreads trades for the Nifty.
The market ended lower, with the Sensex and Nifty closing down 0.3%. Mid- and small-cap indices closed higher. Select heavyweights like Hindalco Industries and BHEL gained 1-3%, while TCS and Tata Motors lost 1-2%. In corporate news, Motherson Sumi Systems agreed to acquire an 80% stake in Peguform for €141.5 million. HDFC Bank, Cadila Healthcare, Crompton Greaves, and Ashok Leyland are scheduled to announce their quarterly results. The trend for the day will be decided by whether Nifty trades above or below the levels of 18,533/5,572 in early trade.
- GSM subscriber additions in India continued their declining trend in June 2011, with net additions of 9.6 million, down 10% from the previous month.
- All major operators except BSNL reported a drop in subscriber additions. Bharti and Vodafone each added 2.1 million subscribers.
- The total GSM subscriber base reached 598.8 million in June 2011, with Bharti, Vodafone, Idea and BSNL maintaining their major market shares.
The document provides a technical analysis of the Indian stock market indices Sensex and Nifty for the week of July 16, 2011. It summarizes that the indices declined over 1.5% for the week and are currently trading in a range between 18,326/5496 on the downside and 19,132/5740 on the upside. It notes that a break above or below this range would dictate the direction of the upcoming trend. The analysis also lists pivot levels for 50 Nifty stocks to watch in the coming week.
The document provides a summary of derivative market activity in India for July 18, 2011. Key points include:
- Nifty futures open interest increased 0.67% while Mini Nifty increased 3.48% as the market closed at 5581.10
- Nifty July futures closed at a premium of 5.85 points and August futures at a premium of 22.60 points
- Implied volatility of at-the-money options decreased from 18% to 17.3%
- Total open interest in the market was Rs. 135,158 crore with stock futures open interest at Rs. 34,675 crore.
The indices opened flat but traded choppily throughout the day. Metal, auto and realty stocks declined while IT stocks gained. The indices are currently trading in a range between 18,326-18,810/5496-5653 on the downside and 19,132-19,094/5740-5700 on the upside. A break above these resistance levels could lead to further gains while a break below support could result in losses extending to 17,805-17,950/5350-5400. Pivot levels for 50 Nifty stocks are provided.
- The key Indian stock indices declined slightly, with the Sensex and Nifty closing down 0.3%.
- GSM subscriber additions in India continued their declining trend in June across most major operators such as Idea, Bharti Airtel, and Vodafone. Total GSM subscriber addition was 9.6 million, down 10% from the previous month.
- Tata Motors reported flat annual global sales growth in June 2011 compared to the previous year.
- South Indian Bank reported a 41.2% year-over-year increase in net profit to Rs. 82 crores for the first quarter of fiscal year 2012, slightly below analyst estimates.
- Business growth remained strong, with advances growth of 31.2% and deposits growth of 35.5% year-over-year. However, net interest margins compressed by 29 basis points sequentially to 2.8% due to a sharp rise in the bank's cost of deposits.
- Non-interest income was boosted by treasury gains, but fee income growth was modest. Asset quality was stable with gross and net NPAs rising marginally, and provision coverage at a comfortable 73.1%.
Bajaj Auto reported marginally lower-than-expected results for the first quarter of fiscal year 2012, with net sales growth of 22.8% year-over-year driven by a 17.7% increase in volumes. However, operating margins contracted by 145 basis points quarter-over-quarter to 19.1% due to a 150 basis point increase in raw material costs. As a result, net profit grew by 20.5% year-over-year to ₹711 crore, which was slightly below analyst estimates. Going forward, the analyst expects further margin pressure and has revised downward its earnings estimates for fiscal years 2012 and 2013 to factor in higher raw material costs and changes to export incentives.
1) Tata Consultancy Services (TCS) reported strong results for the first quarter of fiscal year 2012, outperforming expectations with revenue growth of 6.3% over the previous quarter and 31.4% over the same quarter of the previous fiscal year.
2) A key highlight was 7.4% quarter-over-quarter growth in business volumes. While profit margins declined due to wage hikes, net profit remained flat due to foreign exchange gains.
3) Management maintained a positive outlook, highlighting strong demand environment and deal pipeline, and expects pricing increases later in the fiscal year.
The document summarizes the Indian stock market outlook and performance on July 15, 2011. It reports that domestic indices closed with modest gains of 0.1-0.4%, while global indices declined. Wholesale price inflation in India rose to 9.44% in June 2011, above estimates and persisting above 9% for seven months, driven by increases in primary articles and fuel costs. Key benchmark levels are identified for determining if the market may continue rallying or correct in the near term.
The summary is:
1) The derivative report analyzes the movement in Nifty futures, options, and individual stocks between July 14-15, 2011.
2) Nifty futures open interest decreased while mini Nifty open interest increased as the market closed at 5599.80.
3) Implied volatility of at-the-money options increased from 17.6% to 18%.
The Sensex and Nifty indices opened lower and traded with volatility, closing marginally lower. On the sectoral front, Realty, Banks and Healthcare gained while IT and FMCG fell. The advance-decline ratio favored advancing stocks. On the daily chart, prices tested but did not close above the downward gap area of 18,679-18,589/5,601-5,580 levels. Immediate resistance is seen at 18,735/5,633, while 18,449/5,541 is crucial support.
1) Infosys reported modest revenue growth of 3.2% qoq for 1QFY2012. EBITDA and margins declined due to wage hikes.
2) Guidance for 2QFY2012 revenue growth was lower than expected at 3.5-5% qoq. Annual revenue growth guidance was unchanged.
3) The analyst revised EPS estimates down and cut the target price to INR 3,200 due to macro concerns and muted guidance.
This document summarizes a derivative report from India Research dated July 13, 2011. Some key points:
- The Nifty futures open interest increased 0.51% while Minifty futures open interest rose 8.2% as the market closed at 5526.15.
- Implied volatility of at-the-money options increased from 18% to 19.75%. PCR-OI decreased from 1.20 to 1.15.
- Total open interest of the market is Rs. 125,816 crore and stock futures open interest is Rs. 33,500 crore.
- FII were net sellers of Rs. 969 crore in the cash market segment. Put-call
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumMJDuyan
(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 𝟏)-𝐏𝐫𝐞𝐥𝐢𝐦𝐬
𝐃𝐢𝐬𝐜𝐮𝐬𝐬 𝐭𝐡𝐞 𝐄𝐏𝐏 𝐂𝐮𝐫𝐫𝐢𝐜𝐮𝐥𝐮𝐦 𝐢𝐧 𝐭𝐡𝐞 𝐏𝐡𝐢𝐥𝐢𝐩𝐩𝐢𝐧𝐞𝐬:
- Understand the goals and objectives of the Edukasyong Pantahanan at Pangkabuhayan (EPP) curriculum, recognizing its importance in fostering practical life skills and values among students. Students will also be able to identify the key components and subjects covered, such as agriculture, home economics, industrial arts, and information and communication technology.
𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞 𝐍𝐚𝐭𝐮𝐫𝐞 𝐚𝐧𝐝 𝐒𝐜𝐨𝐩𝐞 𝐨𝐟 𝐚𝐧 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫:
-Define entrepreneurship, distinguishing it from general business activities by emphasizing its focus on innovation, risk-taking, and value creation. Students will describe the characteristics and traits of successful entrepreneurs, including their roles and responsibilities, and discuss the broader economic and social impacts of entrepreneurial activities on both local and global scales.
How to Manage Reception Report in Odoo 17Celine George
A business may deal with both sales and purchases occasionally. They buy things from vendors and then sell them to their customers. Such dealings can be confusing at times. Because multiple clients may inquire about the same product at the same time, after purchasing those products, customers must be assigned to them. Odoo has a tool called Reception Report that can be used to complete this assignment. By enabling this, a reception report comes automatically after confirming a receipt, from which we can assign products to orders.
CapTechTalks Webinar Slides June 2024 Donovan Wright.pptxCapitolTechU
Slides from a Capitol Technology University webinar held June 20, 2024. The webinar featured Dr. Donovan Wright, presenting on the Department of Defense Digital Transformation.
Gender and Mental Health - Counselling and Family Therapy Applications and In...PsychoTech Services
A proprietary approach developed by bringing together the best of learning theories from Psychology, design principles from the world of visualization, and pedagogical methods from over a decade of training experience, that enables you to: Learn better, faster!
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...indexPub
The recent surge in pro-Palestine student activism has prompted significant responses from universities, ranging from negotiations and divestment commitments to increased transparency about investments in companies supporting the war on Gaza. This activism has led to the cessation of student encampments but also highlighted the substantial sacrifices made by students, including academic disruptions and personal risks. The primary drivers of these protests are poor university administration, lack of transparency, and inadequate communication between officials and students. This study examines the profound emotional, psychological, and professional impacts on students engaged in pro-Palestine protests, focusing on Generation Z's (Gen-Z) activism dynamics. This paper explores the significant sacrifices made by these students and even the professors supporting the pro-Palestine movement, with a focus on recent global movements. Through an in-depth analysis of printed and electronic media, the study examines the impacts of these sacrifices on the academic and personal lives of those involved. The paper highlights examples from various universities, demonstrating student activism's long-term and short-term effects, including disciplinary actions, social backlash, and career implications. The researchers also explore the broader implications of student sacrifices. The findings reveal that these sacrifices are driven by a profound commitment to justice and human rights, and are influenced by the increasing availability of information, peer interactions, and personal convictions. The study also discusses the broader implications of this activism, comparing it to historical precedents and assessing its potential to influence policy and public opinion. The emotional and psychological toll on student activists is significant, but their sense of purpose and community support mitigates some of these challenges. However, the researchers call for acknowledging the broader Impact of these sacrifices on the future global movement of FreePalestine.
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A Visual Guide to 1 Samuel | A Tale of Two HeartsSteve Thomason
These slides walk through the story of 1 Samuel. Samuel is the last judge of Israel. The people reject God and want a king. Saul is anointed as the first king, but he is not a good king. David, the shepherd boy is anointed and Saul is envious of him. David shows honor while Saul continues to self destruct.
1. Initiating Coverage | Steel
May 28, 2010
Bhushan Steel BUY
CMP Rs1,396
Bullish on the Margin curve Target Price Rs1,979
Bhushan Steel (BSL), India’s leading value-added steel producer, has extended its Investment Period 12 Months
presence in the steel value chain with the commissioning of its 1.9mn tonnes HR
Stock Info
steel capacity. We expect BSL to register 26.2% CAGR in volumes over
FY2010-15E, on completion of Phase-III expansion by October 2012. This would Sector Steel
be sweetened by EBITDA/tonne increasing to US $331 in FY2011E. Being one of Market Cap (Rs cr) 5,929
the first entrants in auto grade steel in India, BSL with its strategic relationships with Beta 1.6
OEMs and growing investments by foreign OEMs would witness lower demand
52 Week High / Low 1,856/506
risks and uncertainties. With debt/equity expected to decline from 3.3x in FY2009
to 2.0x in FY2012E, we Initiate Coverage on the stock with a Buy recommendation Avg. Daily Volume 131390
and Target Price of Rs1,979, valuing the stock at 6.5x FY2012E EV/EBITDA. Face Value (Rs) 10
At our Target Price, the stock would trade at 1.2x FY2012E EV/IC. BSE Sensex 16,863
Entering a new orbit: With the commissioning of its new HR plant, BSL has moved Nifty 5,067
from being a steel converter to a leading primary producer of steel, extending its
Reuters Code BSSL.BO
presence in the steel value chain. The company is also expanding its HR capacity
Bloomberg Code BHUS IN
by 2.5mn tonnes by October 2012E, taking its total HR capacity to 4.4mn tonnes.
Volume growth sweetened by increasing EBITDA/tonne: With the commissioning Shareholding Pattern (%)
of BSL's Phase-III expansion plan, we expect sales volume to grow at a 26.2%
Promoters 69.2
CAGR over FY2010-15E, much higher than peers , which are expected to register
10-14% CAGR in volumes. Despite BSL not having raw material linkages, we MF / Banks / Indian FIs 24.8
expect EBITDA to register 42.3% CAGR over FY2010-12E through a combination FII / NRIs / OCBs 2.2
of BF-EAF technology and low conversion cost. Thus, BSL is expected to earn
Indian Public / Others 3.8
EBITDA/tonne of US $331 in FY2011E and US $345 in FY2012E.
Top supplier of niche auto grade products: Over the years, BSL has been shifting Abs. (%) 3m 1yr 3yr
its customer base from the trade segment to OEMs/exports. We believe growing Sensex 2.6 18.0 17.1
investments by foreign OEMs and the strategic alliance with Sumitomo Metal
BSL (12.7) 119.5 110.2
complement its OEM relationships and will likely help BSL mitigate demand risks.
Key Financials
Y/E March (Rs cr) FY2009 FY2010E FY2011E FY2012E
Net Sales 4,943 5,641 6,290 7,131
% chg 18.3 14.1 11.5 13.4
Net Profit 421 829 968 1,259
% chg (0.6) 96.9 16.7 30.0
EPS (Rs) 99.2 195.3 228.0 296.4
OPM(%) 20.8 25.7 37.5 41.1
P/E (x) 14.1 7.1 6.1 4.7
P/BV (x) 2.4 1.8 1.4 1.1
Paresh Jain
RoE (%) 20.8 29.2 26.0 26.1
+91 22 4040 3800 Ext: 348
RoCE (%) 8.7 10.0 12.6 14.0
Email: pareshn.jain@angeltrade.com
Net Debt/Equity 3.3 3.1 2.5 2.0
Pooja Jain
EV/IC (x) 1.3 1.2 1.1 1.0
+91 22 4040 3800 Ext: 311
EV/EBITDA (x) 13.5 11.0 7.0 5.7 Email: pooja.j@angeltrade.com
Source: Company, Angel Research
Please refer to important disclosures at the end of this report
2. Bhushan Steel | Initiating Coverage
Investment Arguments
Entering a new orbit
BSL is a leading player in India producing value-added steel products used in the
automobile and white goods sectors. The company offers a superior product mix in
the value-added segment as compared to large players like Tata Steel (India), SAIL,
JSW Steel and Essar Steel. In addition to offering galvanized steel, cold rolled (CR)
steel, galume, color-coated steel - which the large players also offer - BSL also offers
precision pipes, hardened and tempered cold rolled steel strips (H&T) and high tensile
steel strappings (HTSS).
Exhibit 1: BSL extending its presence in the steel value chain
Source: Angel Research; *Partly integrated; ** Post commissioning of the Phase-II expansion
BSL has moved from being a converter BSL has undertaken an expansion plan in Orissa to increase its foothold in the industry.
to a primary steel producer The project is being executed in three phases, with Phase-I already commissioned in
FY2007 and Phase-II commissioned recently. Post the completion of Phase-II, the
company's primary steel-making capacity has increased to 2.2mn tonnes. Moreover,
commissioning of the HR capacity has extended BSL's presence in the steel value
chain, from being a converter to a primary steel producer. Phase-III is currently under
execution and is expected to come on stream by 3QFY2013E. On completion of
Phase-III, BSL's primary capacity will increase to 4.7mn tonnes, making it one of the
leading steel producer.
Exhibit 2: Existing Capacity Exhibit 3: Total estimated capacity by FY2015E
Source: Company, Angel Research Source: Company, Angel Research
May 28, 2010 2
3. Bhushan Steel | Initiating Coverage
Under Phase-II, BSL is also setting up a 300MW power plant under Bhushan Energy,
where it holds a 26% stake. While 150MW of the power plant was commissioned in
June 2009, the remaining is likely to get commissioned by June 2010E. The transfer
pricing for the power plants under Bhushan Energy is fixed at Rs4.0 per unit.
Orissa expansion plan executed in Exhibit 4: Orissa project details
various stages (tonnes) Phase I Phase II Phase III Total
Sponge iron 680,000 680,000 1,360,000
Hot metal 1,269,000 2,900,000 4,169,000
Billets 340,000 340,000
Slabs 2,000,000 3,000,000 5,000,000
HR coils 1,900,000 2,500,000 4,400,000
Coke oven 850,000 1,200,000 2,050,000
Sinter plant 1,670,000 3,810,000 5,480,000
Power (MW) 110 300* 410
Completion date FY2007 Q1FY2011E Q3FY2013E
Total Cost (Rs cr) 1,500 5,500 8,500 15,500
Source: Company, Angel Research; * Under Bhushan Energy
Expanding its color coated capacity BSL is expanding its color coated capacity by 80,000 tonnes at Sahibabad and is
and setting up an ERW plant setting up a 0.5mn tonne ERW plant at Khopoli. The total project cost of the color-
coated and ERW plant is estimated to be Rs150cr and Rs1,200cr, respectively. The
color-coated plant is expected to come on stream by June 2010E and the ERW plant
is likely to be commissioned by FY2013E. The company is also in the process of
setting up power plants of 185MW (under Bhushan Energy) and 197MW (under BSL),
which are likely to be commissioned by March 2012E and October 2012E, respectively.
However, the financial closure for the 197MW power plant is yet to be achieved and
the expected cost is likely to be Rs960cr.
Exhibit 5: Other projects
Detail Capacity (tonnes) Timeframe Location Cost (Rs cr)
Color-coated plant 80,000 Jun'2010E Sahibabad 150
ERW plant 500,000 FY2013E Khopoli 1,200
Power plant* 185MW Mar'2012E Orissa 750
Power plant 197MW Oct'2012E Orissa 960
Source: Company, Angel Research; * Under Bhushan Energy
Volume growth sweetened by increasing EBITDA/tonne
Sales volume to grow at a 26.2% CAGR BSL currently has a CR capacity of 1.0mn tonnes, and the total primary steel capacity
over FY2010-15E after completion of Phase-II has increased to 2.2mn tonnes, which is expected to
increase to 4.7mn tonnes post the Phase-III expansion. With the commissioning of the
Phase-III expansion plan, we expect BSL's sales volume to grow at a 26.2% CAGR
over FY2010-15E, much higher than its peers, including SAIL, Tata Steel (India) and
JSW Steel, which are expected to register volume growth at 10-14% CAGR. We expect
BSL's sales volume for FY2011E and FY2012E to be 1.6mn tonnes and 1.9mn tonnes,
respectively; post the Phase-III expansion plan, sales volume will likely increase to
4.1mn tonnes and 4.6mn tonnes in FY2014E and FY2015E, respectively.
May 28, 2010 3
4. Bhushan Steel | Initiating Coverage
Exhibit 6: Sales volume growth to jump in FY2014E Exhibit 7: Highest volume growth amongst peers
Source: Company, Angel Research Source: Company, Angel Research
Excess HR coils to be sold in the open With the recent commissioning of the Phase-II project, BSL's upstream sales volume is
market from FY2012E expected to increase to 0.82mn tonnes in FY2012E from 0.27mn tonnes in FY2010,
as excess HR coils are sold in the open market (approx 0.5mn tonnes in FY2012E).
With no significant capacity being added downstream, sales volume is expected to be
flat at 1.07mn tonnes in FY2012E. The flat segment continues to dominate the
company's product mix, increasing to 78.2% in FY2012E from 72.0% in FY2010;
while the long portfolio as a percentage of total sales volume is expected to decline to
21.8% in FY2012E from 28% in FY2010.
Exhibit 8: Upstream operations gaining steam Exhibit 9: Product profile skewed towards the flat segment
Source: Company, Angel Research Source: Company, Angel Research
Lo w e r c o nv e rsi o n c o st a nd Despite BSL not being integrated, cost of production is expected to be low due to a) its
technological advantage to lower unique combination of BF-EAF technology to produce steel and b) lower conversion
overall cost costs. The usage of BF-EAF technology will result in lower coal costs. While the blast
furnace requires coking coal, the electric arc furnace requires thermal coal, which is
significantly cheaper than coking coal. This will help keep raw material prices under
check and in line with its non integrated peers like JSW Steel.
The technological advantage is also accompanied by low conversion cost. For
FY2011E, we expect BSL's conversion cost to be around US $107/tonne as compared
to other players such as SAIL, Tata Steel (India) and JSW Steel, which are likely to incur
a cost of US $130-330/tonne.
May 28, 2010 4
5. Bhushan Steel | Initiating Coverage
Exhibit 10: Lower coal costs... Exhibit 11: along with lower conversion cost...
Source: Angel Research; Note: FY2011E numbers Source: Angel Research; Note: FY2011E numbers
Consequently, BSL is expected to earn an EBITDA/tonne of US $331 and US $345 in
FY2011E and FY2012E, respectively, which is likely to be at the higher end of the
industry curve, whereas SAIL, Tata Steel (India) and JSW Steel are expected to register
an EBITDA/tonne of US $170-300.
Exhibit 12: ...leading to higher EBITDA/tonne. Exhibit 13: EBITDA/tonne vis-à-vis other players
Source: Company, Angel Research Source: Company, Angel Research
We expect BSL’s EBITDA to grow at a 42.3% CAGR from FY2010-12E - much higher
than its peers such as SAIL, Tata Steel (India) and JSW Steel which are expected to
grow at ~9-23% CAGR over FY2010-12E.
May 28, 2010 5
6. Bhushan Steel | Initiating Coverage
Exhibit 14: BSL to register higher EBITDA growth
Source: Company, Angel Research
Top supplier of niche auto grade products
Dominant supplier to the auto and BSL is a dominant supplier to the auto and white goods sectors. The company has its
white goods sectors manufacturing facilities at Shahibabad (Uttar Pradesh) and Khopoli (Maharashtra),
where it enjoys close proximity to its customers. At Sahibabad, BSL has a dedicated
service centre for large OEM customers. The company’s Khopoli facility is well
connected to ports, facilitating smooth export operations.
Over the period, BSL has shifted its customer base from the trade segment to OEMs/
exports. Consequently, the company's share in the OEM segment improved to 66% in
FY2009 from 55% in FY2003, while share in the trade segment declined to 7% in
FY2009 from 33% in FY2003. Moreover, contracts with OEMs are typically quarterly,
semiannual or annual; this reduces BSL's exposure to volatility in the spot market.
Exhibit 15: Increasing share in the OEM segment
FY2003 FY2009
Source: Company, Angel Research
May 28, 2010 6
7. Bhushan Steel | Initiating Coverage
OEMs increasing their foothold in the Indian market
Total estimated investment in the auto The Indian economy's growth over the past few years and the ailing auto sector in
component industry is likely to be developed markets such as Europe, US and Japan are the primary drivers for setting
Rs510-560bn for the next five years up of new capacities and capital flow to the Indian automobile industry. In order to
capitalize on growing demand, massive investment plans have been announced by
domestic and foreign OEMs, thus resulting into higher demand for auto components.
According to Crisil Research, the total estimated investment in the auto component
industry is likely to be in the range of Rs510-560bn for the next five years
(FY2011E-15E).
Exhibit 16: Major Investment plans announced by OEMs (Rs cr)
Domestic OEMs International OEMs
Players Additional Capacity Planned Investments Players Additional Capacity Planned Investments
Mahindra & Mahindra 200,000 4,000 Renault-Nissan 400,000 4,500
Tata-Fiat 100,000 4,000 Ford India 100,000 2,500
Tata Motors 250,000 3,000 Intl. Cars & Motors 24,000 800
Honda Siel Cars India 180,000 3,000 Bosch - 2,000
Toyota Kirloskar Motors 100,000 1,400 Setco Automotive - 1,000
Source: Crisil Research, D&B
Although car ownership in emerging markets is rising, there is a significant gap
between car ownership in developed markets and emerging markets. In the UK there
are 511 cars on roads for every 1,000 citizens, whereas there are only 11 cars per
1,000 people in India and 22 per 1,000 people in China.
Significant gap between car ownership Exhibit 17: Huge potential exists to be tapped by OEMs
in developed markets and emerging
markets
Source: Deloitte
India a preferred hub for global OEMs: Labor advantage
Trained manpower at competitive cost The move towards India is also driven by the trained manpower at competitive costs.
in India The cost of labor in emerging countries like India is a fraction of that in the developed
world. The lower cost advantage is also increasing the attractiveness of India vis-à-vis
other markets for OEMs.
May 28, 2010 7
8. Bhushan Steel | Initiating Coverage
Cost of labor in India is a fraction of Exhibit 18: Labor cost comparison (US $/hour)
that in the developed world
Source: Deloitte
First mover advantage
India imports nearly 30% of high-grade Currently, Indian automakers import nearly 30% of high-grade automotive steel.
automotive steel Annual demand for auto grade steel is expected to grow at ~13% till FY2015E. In
order to capitalize on the strong demand, Indian companies have recently entered
into technical tie-ups with their foreign counterparts. JSW Steel has entered into a
technical tie-up with Japan's JFE Corp and Uttam Galva has signed an agreement
with ArcelorMittal. JSW's tie-up will help the company produce high-grade skin panels,
now being imported, for cars and bikes. Recently, Tata Steel (India) has formed a
51:49 joint venture with Japan's Nippon Steel for the production of automotive CR
products. By virtue of being an early mover, BSL stands to gain as it had first entered
into a six-year strategic alliance with Sumitomo Metal Industries of Japan in 1997 for
making auto grade steel. Later in 2003, the alliance for the process know-how was
further extended for six years. Recently, Sumitomo has inked an agreement with BSL
for sourcing HR coils from the latter's new plant in Orissa. In our view, the strategic
alliance complements its OEMs' relationships, and we believe it is likely to help the
company in mitigating demand risks.
Strong track record and a consistent profit-making company
Stable EBITDA margin, timely servicing Traditionally, BSL has been a pure converter (converting HR coils into CR and other
of debt and regular dividends paying value added products). The company's margins were dependent on the differential of
company HR coil and CR coil prices, which resulted in stable margins withstanding the cyclicality
of the industry. BSL's EBITDA margin has remained stable between 15-20% for FY1999-
2009. Moreover, timely servicing of debt and regular dividends to shareholders over
the years are other positives about the company.
May 28, 2010 8
9. Bhushan Steel | Initiating Coverage
Exhibit 19: Stable margins over the years Exhibit 20: Consistently paying dividend
Source: Company, Angel Research Source: Company, Angel Research
Future catalyst: Raw material linkages in progress
BSL is trying to increase its raw material integration to reduce its raw material costs.
Currently, BSL sources 60-70% of its iron ore requirements from NMDC and the
balance is procured from the spot market. The company imports its coking coal
requirements from Australia and thermal coal is sourced from Mahanadi coal fields
and e-auction.
Over the last couple of years, the company has been allotted iron ore and coal
blocks in India and has also made investments overseas. However, we have not
factored the benefit of the same in our estimates.
Iron ore
BSL has been allocated Marsua Tirba mines in Keonjhar district, Orissa with reserves
of 70mn tonnes. The company is in the process of receiving the forest and environmental
clearance.
Coal and coking coal
BSL has been allotted coal mines in New Patrapara, Orissa, in a joint venture with
Visa Steel, SMC Power Generation Ltd, Orissa Sponge Iron and Steel, Deepak Steel
and Power, Sri Metaliks and Adhunik Corp.; BSL owns a 50% stake in the joint venture.
Total reserves are estimated to be 650mn tonnes, of which BSL's share will be 325mn
tonnes.
In addition, BSL has been allotted the Andal East Coal block in West Bengal, with
estimated reserves of 235mn tonnes, and the Urtan North coking coal block in Madhya
Pradesh, which has an estimated reserves of 55mn tonnes.
Bowen Energy
BSL, through its subsidiary Bhushan Steel (Australia) Pty, holds a 60% stake in Bowen
Energy. The company has already spent US $50mn for the development of mines. It
has the right to explore four major coal mines: 1) 2 open-cut steam thermal mines
(West Rollestone and Tarang Projects), 2) one underground coking coal mine (black
water south projects) and 3) one underground coking, Pulverised coal injection (PCI),
thermal coal mine (East Middlemount).
May 28, 2010 9
10. Bhushan Steel | Initiating Coverage
Financial Analysis
Muted revenue growth in the near term
BSL's net revenue to grow at a 12.4% We expect BSL's net revenue to grow at a 12.4% CAGR over FY2010-12E, mainly
CAGR over FY2010-12E driven by the commissioning of its 1.9mn tonnes of HR coil capacity. As HR produced
will be used for captive consumption (100% in FY2011E, 70% in FY2012E), sales
volumes are expected to grow at a 14.0% CAGR. Average realisations are expected
to dip marginally in FY2012E as external sales of HR takes place. Consequently, net
revenue is expected to grow by 11.5% yoy to Rs6,290cr in FY2011E and by 13.4% yoy
to Rs7,131cr in FY2012E.
Exhibit 21: Revenue growth muted Exhibit 22: Average realisation to dip marginally
Source: Company, Angel Research Source: Company, Angel Research
OPM and net profit to increase significantly
EBITDA likely to grow at a 42.3% CAGR Despite muted revenue growth, the company's EBITDA is likely to grow at a 42.3%
o ve r FY 20 10 -1 2E as c ap ti ve H R CAGR over FY2010-12E as captive HR replaces external purchase of HR. This will be
replaces external purchase of HR supported by low conversion costs and technological advantage of the BF-EAF process
for steelmaking, which will result in lower utilisation of coking coal.
EBITDA is expected to increase by 62.7% yoy to Rs2,357cr in FY2011E and by 24.4%
to Rs2,933cr in FY2012E. Consequently, EBITDA margin is likely to expand by 1178bp
to 37.5% in FY2011E and by 365bp to 41.1% in FY2012E. Thus, driven by the strong
operational performance, we expect net profit to increase by 16.7% yoy to Rs968cr in
FY2011E and by 30% to Rs1,259cr in FY2012E. Net profit margin is expected to
improve from 14.7% in FY2010 to 15.4% in FY2011E, which is further expected to
extend to 17.7% in FY2012E.
May 28, 2010 10
11. Bhushan Steel | Initiating Coverage
Exhibit 23: EBITDA margins on an uptrend... Exhibit 24: followed by improved net profit margin...
Source: Company, Angel Research Source: Company, Angel Research
Return ratios improving
Return ratios to improve As Phase-II expansion starts contributing to the cash flows we expect RoCE to increase
to 12.6% and 14.0% in FY2011E and FY2012E, respectively, from 8.7% in FY2009.
RoE is also expected to increase from 20.8% in FY2009 to 26% in FY2011E and
26.1% in FY2012E.
Exhibit 25: ...leading to higher ratios.
Source: Company, Angel Research
Net debt/equity to decline
Net debt/equity to decline to 2.5x in BSL's net debt is expected to increase until FY2012E as the funding of Rs8,500cr for
FY2011E and 2.0x in FY2012E from Phase-III expansion is still remaining. However, we believe the increase in cash flow
3.3x in FY2009 resulting from Phase-II expansion will lead to a decline in the company's net
debt-equity ratio. We expect net debt/equity to decline to 2.5x in FY2011E and 2.0x in
FY2012E from 3.3x in FY2009. Net debt/EBITDA is also expected to decline from
7.7x in FY2009 to 3.7x in FY2012E.
May 28, 2010 11
12. Bhushan Steel | Initiating Coverage
Exhibit 26: Net Debt/Equity to decline Exhibit 27: Net Debt/EBITDA to dip
Source: Company, Angel Research Source: Company, Angel Research
Free cash flow turning positive from FY2013E
Given that most of the capex is expected to be incurred in FY2011E and FY2012E, we
expect the company's free cash flow to turn positive from FY2013E onwards, as
Phase-III starts generating cash flows.
Exhibit 28: Free cash flow to turn positive
Source: Company, Angel Research
May 28, 2010 12
14. Bhushan Steel | Initiating Coverage
Sensitivity Analysis
Exhibit 30: Realisations
1% change will impact our FY11 EPS by 1.9% 1% change will impact our FY12 EPS by 2.5%
(US $/tonne) 475 525 575 625 675 (US $/tonne) 475 525 575 625 675
EPS (Rs) 150.8 189.4 228.0 266.5 305.1 EPS (Rs) 168.3 232.4 296.4 360.5 424.6
Source: Angel Research
Exhibit 31: Exchange rate
1% change will impact FY11E EPS by 3.3% 1% change will impact FY12E EPS by 3.1%
(INR/US $) 40 42.5 45 47.5 50 (INR/US $) 40 42.5 45 47.5 50
EPS (Rs) 145.6 186.8 228.0 269.2 310.4 EPS (Rs) 194.2 245.3 296.4 347.5 398.6
Source: Angel Research
Exhibit 32: Iron ore costs
1% change will impact FY11E EPS by 0.4% 1% change will impact FY12E EPS by 0.4%
(Rs/tonne) 2150 2200 2250 2300 2350 (Rs/tonne) 2175 2225 2275 2325 2375
EPS (Rs) 232.4 230.2 228.0 225.7 223.5 EPS (Rs) 302.2 299.3 296.4 293.6 290.7
Source: Angel Research
Exhibit 33: Coking coal costs
1% change will impact FY11E EPS by 0.5% 1% change will impact FY12E EPS by 0.5%
(US $/tonne) 190 200 210 220 230 (US $/tonne) 190 210 230 250 270
EPS (Rs) 238.5 233.2 228.0 222.7 217.4 EPS (Rs) 323.8 310.1 296.4 282.8 269.1
Source: Angel Research
Exhibit 34: Coal costs
1% change will impact FY11E EPS by 0.3% 1% change will impact FY12E EPS by 0.3%
(Rs/tonne) 2200 2250 2300 2350 2400 (Rs/tonne) 2250 2300 2350 2400 2450
EPS (Rs) 231.4 229.7 228.0 226.2 224.5 EPS (Rs) 300.4 298.4 296.4 294.5 292.5
Source: Angel Research
Risks and Concerns
Delay in expansion plans
The Orissa project is critical for BSL's growth. Any delay in ramping up of the new
capacities and commissioning of Phase-III may affect our estimates.
Adverse movement in product prices
Any adverse movement in product prices is likely to have a negative impact on the
company's earning and our estimates.
Captive raw material still missing
Currently, BSL does not have captive raw material linkages as the allotted mines are
in the preliminary stages of approvals. In the event of rising raw material prices and
the company's inability to pass on the cost push can affect our estimates negatively
May 28, 2010 14
15. Bhushan Steel | Initiating Coverage
Outlook and Valuation
At the CMP BSL is trading at 7.0x FY2011E and 5.7x FY2012E EV/EBITDA and 1.4x
,
FY2011E and 1.1x FY2012E P/BV respectively. The company's stock price has corrected
,
by 21% over the last one month. With net debt/equity expected to decline from 3.3x in
FY2009 to 2.0x in FY2012E accompanied by volume growth of 14% CAGR over
FY2010-12E and EBITDA growth of 42.3% CAGR over the same period, we believe
the current valuation does not factor in the company's future growth potential fully.
We Initiate Coverage on the stock with a Buy recommendation and Target Price
of Rs1,979 valuing the stock at 6.5x FY2012E EV/EBITDA. At our Target Price, the
stock would trade at 1.2x FY2012E EV/IC.
On a relative basis also, the company is trading cheaper than its peers. On the return
ratios front, BSL is expected to have a healthy margin of 37.5% and 41.1% in FY2011E
and FY2012E, respectively as compared to its peers, which are expected to have
EBITDA margin of 12-24% over the same period. The RoE for BSL is expected to be at
the higher end of around 26% in FY2011E and FY2012E as compared to its peers.
Exhibit 35: Valuation Ratio
Companies CMP Target Price Reco P/E (x) P/BV (x) EV/EBITDA (x)
FY10 FY11E FY12E FY10 FY11E FY12E FY10 FY11E FY12E
SAIL 206 - Neutral 12.6 12.7 12.4 2.6 2.2 2.0 7.9 8.1 7.7
Tata Steel* 496 697 Buy - 8.1 8.7 1.6 1.4 1.2 11.7 6.5 5.9
JSW Steel* 1,090 1,360 Buy 17.2 11.8 9.3 2.3 1.9 1.6 8.6 7.0 5.4
Bhushan Steel 1,396 1,979 Buy 7.1 6.1 4.7 1.8 1.4 1.1 11.0 7.0 5.7
Source: Company, Angel Research; *Tata Steel, JSW Steel are consolidated numbers
Exhibit 36: Return Ratio
Companies EBITDA margin (%) RoE (%) RoCE (%)
FY10 FY11E FY12E FY10 FY11E FY12E FY10 FY11E FY12E
SAIL 24.5 22.1 22.5 22.5 19.0 16.9 20.9 18.0 16.8
Tata Steel* 7.9 12.5 12.8 - 17.9 14.7 5.2 11.8 11.7
JSW Steel* 22.2 23.3 23.6 16.1 19.4 20.2 11.1 13.8 15.6
Bhushan Steel 25.7 37.5 41.1 29.2 26.0 26.1 10.0 12.6 14.0
Source: Company, Angel Research; *Tata Steel, JSW Steel are consolidated numbers
Exhibit 37: 1-year forward P/E band
Source: Bloomberg, Angel Research
May 28, 2010 15
16. Bhushan Steel | Initiating Coverage
Exhibit 38: 1-year forward P/BV band
Source: Bloomberg, Angel Research
Exhibit 39: 1-year forward EV/EBITDA band
Source: Bloomberg, Angel Research
May 28, 2010 16
17. Bhushan Steel | Initiating Coverage
Business Overview
BSL is a leading player in India producing value-added steel products used in the
automobile and white goods sectors. The company offers a superior product mix in
the value-added segment. Incorporated in 1989, with a capacity of 0.06mn tonnes,
BSL has emerged as one of the fastest growing companies with the current capacity of
2.2mn tonnes of saleable steel.
Exhibit 40: Growth path of BSL
Source: Company, Angel Research
Rich product portfolio
BSL produces CR steel, galvanized steel and special steel, ranging from CRCA, galume,
color-coated sheets, HTSS, H&T to drawn tubes. The company was the first to
manufacture and market auto grade CR steel in India. BSL manufactures CR coils
and sheets upto a width of 1,700mm and galvanised steel coils and sheets up to a
width of 1,350mm.
Exhibit 41: Downstream profile
Products Plants (tonnes) Total
Sahibabad Khopoli
Cold Rolling
Widest (upto 1700) 350,000 - 350,000
Wider (upto 1200) 100,000 350,000 450,000
Narrow (upto 550 mm) 50,000 150,000 200,000
Total Cold Rolling 500,000 500,000 1,000,000
Galvanized Sheets 225,000 240,000 465,000
Hardened & Tempered Strips - 11,000 11,000
Color Coated Sheets - 80,000 80,000
Galume (Aluminium and Zinc coated - 70,000 70,000
Drawn/Precision Tubes 15,000 85,000 100,000
High Tensile Steel Strappings - 25,000 25,000
Alloy Steel/Wire Rods 63,000 - 63,000
Service Centre 300,000 - 300,000
Captive Power 24MW 24MW 48MW
Source: Company, Angel Research
May 28, 2010 17
18. Bhushan Steel | Initiating Coverage
Location advantage
BSL's downstream operations are located at Sahibabad and Khapoli and its upstream
plant is strategically located in Orissa. While downstream plants are closely associated
to BSL's user industries, upstream operations enjoy close proximity to raw material
mines.
Exhibit 42: Plants closely associated to user industries
Source: Company, Angel Research
Diversified customer base
BSL is a regular supplier to white goods and automobile manufacturers. Over the
years, BSL has managed to develop strong relationships with OEMs and has the best
names, such as Daewoo, LG Electronics, Whirlpool, Electrolux, IFB and Carrier, in its
customer portfolio. The company exports to the US, China, Ethiopia, UAE, Myanmar,
Senegal, Iran, Australia, New Zealand, Saudi Arabia and African countries.
Exhibit 43: Key customers
Automobile sector
Maruti, Tata Motors, Mahindra & Mahindra, Ashok Leyland, Bajaj Auto, Hyundai,
Fiat, Ford, General Motors, Honda, Hindustan Motors, Neel Metal Products, Veegee
Industrial Enterprise, Yamaha
Consumer durable sector
LG, Godrej & Boyce, Electrolux, Whirlpool, Videocon, Samsung, BPL
Source: Company, Angel Research
May 28, 2010 18
23. Bhushan Steel
Disclaimer
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Securities Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment
decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are
those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading
volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources
believed to be true, and is for general guidance only. Angel Securities Limited has not independently verified all the information contained
within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents
or data contained within this document. While Angel Securities Limited endeavours to update on a reasonable basis the information
discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so.
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Neither Angel Securities Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section).
Disclosure of Interest Statement Bhushan Steel
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock Yes
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below Rs 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to -15%) Sell (< -15%)
24. Bhushan Steel
Address: Acme Plaza, ‘A’ Wing, 3rd Floor, M.V. Road, Opp. Sangam Cinema, Andheri (E), Mumbai - 400 059.
Tel : (022) 3952 4568 / 4040 3800
Research Team
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V Srinivasan Research Associate (Cement, Power) v.srinivasan@angeltrade.com
Aniruddha Mate Research Associate (Infra, Real Estate) aniruddha.mate@angeltrade.com
Mihir Salot Research Associate (Logistics, Shipping) mihirr.salot@angeltrade.com
Chitrangda Kapur Research Associate (FMCG, Media) chitrangdar.kapur@angeltrade.com
Vibha Salvi Research Associate (IT, Telecom) vibhas.salvi@angeltrade.com
Pooja Jain Research Associate (Metals & Mining) pooja.j@angeltrade.com
Technicals:
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Mileen Vasudeo Technical Analyst vasudeo.kamalakant@angeltrade.com
Derivatives:
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