1. 1QFY2011 Result Update | Steel
August 02, 2010
Bhushan Steel BUY
CMP Rs1,559
Performance Highlights Target Price Rs1,979
Particulars (Rs cr) 1QFY2011 1QFY2010 % chg (yoy) 4QFY2010 % chg (qoq) Investment Period 12 months
Net sales 1,373 1,305 5.2 1,609 (14.7)
EBITDA 408 297 37.4 419 (2.7) Stock Info
% margin 29.7 22.8 696bp 26.1 366bp Sector Steel
Net profit 206 172 19.7 241 (14.6) Market Cap (Rs cr) 6,623
Source: Company, Angel Research Beta 1.6
Muted top-line performance led by lower sales volume: For 1QFY2011, Bhushan 52 Week High / Low 1856/696
Steel (BSL) reported a 14.4% yoy (21.2% qoq) decline in sales volume to 309,333 Avg. Daily Volume 117146
tonnes, of which flat sales accounted for 215,808 tonnes and long products sales Face Value (Rs) 10
stood at 93,525 tonnes. However, on the positive side, average gross realisation BSE Sensex 18,081
increased by 23.9% yoy and 9.3% qoq to Rs47,879/tonne. Consequently, net Nifty 5,432
revenue grew by 5.2% yoy but fell by 14.7% qoq to Rs1,373cr. The 1.9mn tonne Reuters Code BSSL.BO
hot strip mill is under trial runs and BSL produced 62,789 tonnes of hot rolled
Bloomberg Code BHUS@IN
steel during the quarter. The mill is expected to be commissioned in 2QFY2011.
Solid margins in 1QFY2011: Despite muted top-line performance, EBITDA
margin expanded by 696bp yoy and 366bp qoq to 29.7% mainly on account of Shareholding Pattern (%)
lower raw-material cost. Raw-material cost as a percentage of revenue fell to Promoters 69.2
54.6% in 1QFY2011 as compared to 66.1% in 1QFY2010 and 60.8% in MF / Banks / Indian Fls 25.3
4QFY2010. Consequently, EBITDA grew by 37.4% yoy to Rs408cr but declined FII / NRIs / OCBs 1.9
2.7% qoq. EBITDA/tonne increased to US $289 from US $232 in 4QFY2010 and Indian Public / Others 3.5
US $169 in 1QFY2010. Consequently, net profit increased by 19.7% yoy to
Rs206cr but declined 14.6% sequentially.
Outlook and valuation: At the CMP of Rs1,559, the stock is trading at 7.3x Abs. (%) 3m 1yr 3yr
FY2011E and 6.0x FY2012E EV/EBITDA. We expect BSL to post a 26.2% CAGR in Sensex 3,0 15.4 20.7
volumes over FY2010–15E on completion of its Phase-III expansion plan by BSL (12.7) 99.6 135.8
October 2012E along with EBITDA/tonne increasing to US $331 in FY2011E.
Moreover, with debt/equity expected to decline from 3.3x in FY2009 to 2.0x in
FY2012E, we maintain our Buy recommendation on the stock with a Target Price
of Rs1,979, valuing the stock at 6.5x FY2012E EV/EBITDA.
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
EBITDA margin (%) 20.8 25.7 37.5 41.1
P/E (x) 15.7 8.0 6.8 5.3 Paresh Jain
P/BV (x) 2.7 2.0 1.6 1.2 Tel: 022-40403800 Ext: 348
RoE (%) 20.8 29.2 26.0 26.1 pareshn.jain@angeltrade.com
RoCE (%) 8.7 10.0 12.6 14.0
Pooja Jain
EV/Sales (x) 2.9 3.0 2.7 2.5
Tel: 022-40403800 Ext: 311
EV/EBITDA (x) 14.2 11.5 7.3 6.0 pooja.j@angeltrade.com
Source: Company, Angel Research
Please refer to important disclosures at the end of this report 1

2. Bhushan Steel | 1QFY2011 Result Update
Exhibit 1: 1QFY2011 performance
Y/E March (Rs cr) 1QFY11 1QFY10 yoy % FY10 FY09 yoy %
Net sales 1,373 1,305 5.2 5,641 4,943 14.1
Raw material 750 862 (13.0) 3,538 3,352 5.5
% of net sales 54.6 66.1 62.7 67.8
Staff cost 25 18 38.4 84 101 (16.9)
% of net sales 1.8 1.4 1.5 2.0
Other expenditure 190 128 48.8 570 475 20.0
% of net sales 13.8 9.8 10.1 9.6
Total expenditure 965 1,008 (4.3) 4,192 3,928 6.7
% of net sales 70.3 77.2 74.3 79.5
Operating profit 408 297 37.4 1,449 1,015 42.8
OPM (%) 29.7 22.8 25.7 20.5
Other operating income - - - - 14 -
EBITDA 408 297 37.4 1,449 1,029 40.8
EBITDA margin (%) 29.7 22.8 25.7 20.8
Interest 79 49 60.4 217 252 (14.1)
Depreciation 53 54 (1.5) 220 234 (6.2)
Other income 6 33 (82.8) 116 18 539.8
Exceptional items - - - -
PBT 281 226 24.3 1,128 561 101.2
% of net sales 20.5 17.3 20.0 11.3
Tax 76 54 38.7 299 139 114.3
% of PBT 26.9 24.1 26.5 24.9
PAT 206 172 19.7 829 421 96.9
% of net sales 15.0 13.2 14.7 8.5
EPS (Rs) 48.4 40.5 19.7 195.3 99.2 96.9
Source: Company, Angel Research
Exhibit 2: Quarterly production trend
(tonnes) 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 yoy % qoq %
Flat products 439,000 411,325 455,901 503,085 461,859 5.2 (8.2)
Cold rolled steel 281,490 264,388 298,835 318,725 257,213 (8.6) (19.3)
Galvanized steel 130,122 119,753 127,060 154,214 114,033 (12.4) (26.1)
H&T 1,934 2,440 2,581 2,641 2,609 34.9 (1.2)
HTSS 1,307 1,417 2,466 2,346 2,275 74.1 (3.0)
Colour coating 24,147 23,327 24,959 25,159 22,940 (5.0) (8.8)
Hot rolled steel - - - - 62,789 - -
Long products 219,935 172,689 227,613 220,533 211,426 (3.9) (4.1)
Billets 79,954 60,007 86,788 72,335 67,131 (16.0) (7.2)
Sponge iron 103,259 78,258 105,009 114,094 114,484 10.9 0.3
Wire rods 12,853 9,643 7,353 4,152 4,954 (61.5) 19.3
Tube & shutters 23,583 24,554 28,254 29,711 24,588 4.3 (17.2)
Formed sections 286 227 209 241 269 (5.9) 11.6
Total production 658,935 584,014 683,514 723,618 673,285 2.2 (7.0)
Source: Company, Angel Research
August 02, 2010 2

3. Bhushan Steel | 1QFY2011 Result Update
Exhibit 3: Quarterly sales volume trend
(tonnes) 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 yoy % qoq %
Flat products 250,665 246,042 256,931 292,549 215,808 (13.9) (26.2)
Cold rolled steel 118,914 116,095 129,917 135,683 104,019 (12.5) (23.3)
Galvanized steel 105,188 103,475 99,145 127,129 86,923 (17.4) (31.6)
H&T 2,007 2,422 2,531 2,767 2,430 21.1 (12.2)
HTSS 1,477 1,261 2,246 2,139 1,373 (7.0) (35.8)
Colour coating 23,079 22,789 23,092 24,832 21,037 (8.8) (15.3)
Hot rolled steel - - - - 26 - -
Long products 110,544 93,488 102,443 100,230 93,525 (15.4) (6.7)
Billets 70,369 57,968 68,333 66,821 65,624 (6.7) (1.8)
Sponge iron 4,206 1,467 8 0 0 (100.0) (100.0)
Wire rods 12,405 9,688 7,367 3,449 4,963 (60.0) 43.9
Tube & shutters 23,303 24,132 26,515 29,708 22,670 (2.7) (23.7)
Formed sections 261 233 220 251 268 2.7 6.8
Total sales volume 361,209 339,530 359,374 392,779 309,333 (14.4) (21.2)
Source: Company, Angel Research
Exhibit 4: Quarterly realisation trend (gross)
(Rs/tonne) 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 yoy % qoq %
Flat products 41,486 43,074 44,280 45,124 50,916 22.7 12.8
Cold Rolled Steel 39,011 40,777 42,258 41,647 47,386 21.5 13.8
Galvanized Steel 41,792 43,469 43,956 46,324 51,632 23.5 11.5
H&T 79,223 78,035 81,391 80,737 88,889 12.2 10.1
HTSS 48,070 43,616 53,428 52,875 57,538 19.7 8.8
Colour Coating 49,136 49,234 52,096 53,348 60,608 23.3 13.6
Hot rolled steel - - - - 38,462 - -
Long products 28,975 30,464 31,334 33,984 36,300 25.3 6.8
Billets 25,750 26,170 26,664 28,654 30,781 19.5 7.4
Sponge Iron 14,265 11,588 - - - - -
Wire Rods 28,617 26,528 26,198 31,542 31,030 8.4 (1.6)
Tube & Shutters 41,411 43,386 44,692 46,139 53,242 28.6 15.4
Formed Sections 42,146 42,918 45,455 47,809 52,239 23.9 9.3
Avg. gross realisation 38,634 40,453 42,162 43,786 47,879 23.9 9.3
Source: Company, Angel Research
August 02, 2010 3

4. Bhushan Steel | 1QFY2011 Result Update
Result highlights
Muted top-line performance led by lower sales volume
BSL’s sales volume declined by 14.4% yoy and 21.2% qoq to 309,333 tonnes, of
which flat sales accounted for 215,808 tonnes and long products sales stood at
93,525 tonnes. However, on the positive side, average gross realisation increased
by 23.9% yoy and 9.3% qoq to Rs47,879/tonne. Consequently, net revenue grew
by 5.2% yoy but fell by 14.7% qoq to Rs1,373cr. The 1.9mn tonne hot strip mill is
under trial runs and BSL produced 62,789 tonnes of hot rolled steel during the
quarter. The mill is expected to be commissioned in 2QFY2011.
Exhibit 5: Net revenue grew by 5.2% yoy
2,000 60
1,609
1,600 1,429 1,373 40
1,305 1,298
1,200
(Rs cr)
20
(%)
800
0
400
0 (20)
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
Net revenue (RHS) yoy change (LHS)
Source: Company, Angel Research
EBITDA margin expands by 696bp yoy
Despite muted top-line performance, EBITDA margin expanded by 696bp yoy and
366bp qoq to 29.7% mainly on account of lower raw-material cost. Raw-material
cost as a percentage of revenue fell to 54.6% in 1QFY2011 as compared to
66.1% in 1QFY2010 and 60.8% in 4QFY2010. Consequently, EBITDA grew by
37.4% yoy to Rs408cr. EBITDA/tonne increased to US $289 from US $232 in
4QFY2010 and US $169 in 1QFY2010.
Exhibit 6: EBITDA margin expands by 696bp yoy Exhibit 7: EBITDA/tonne at US $289 in 1QFY2011
500 35 350
419 408
390 30 289
400 300
343
25 233 232
297 250
300 209
(US $/tonne)
20
(Rs cr)
200
(%)
169
200 15
150
10
100 100
5
0 0 50
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
0
EBITDA (RHS) EBITDA margin (LHS) 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
Source: Company, Angel Research Source: Company, Angel Research
August 02, 2010 4

5. Bhushan Steel | 1QFY2011 Result Update
Net profit came in at Rs206cr
While interest expense increased by 60.4% yoy and 43.0% qoq to Rs79cr, interest
income fell by 82.8% yoy and 88.9% qoq to Rs6cr. Consequently, net profit
increased by 19.7% yoy to Rs206cr but declined 14.6% sequentially.
Exhibit 8: Net profit grew by 19.7% yoy in 1QFY2011
300 18
241
250 227 15
206
189
200 172 12
(Rs cr)
150 9
(%)
100 6
50 3
0 0
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
Net profit (RHS) Net profit margin (LHS)
Source: Company, Angel Research
August 02, 2010 5

6. Bhushan Steel | 1QFY2011 Result Update
Investment rationale
Entering a new orbit
BSL has undertaken an expansion plan in Orissa to increase its foothold in the
industry. The project is being executed in three phases, with Phase-I already
commissioned in FY2007 and Phase-II being commissioned recently. Post the
completion of Phase-II, the company's primary steel-making capacity will increase
to 2.2mn tonnes. Moreover, with the commissioning of its new HR plant in
2QFY2011E, BSL is moving from being a steel converter to a leading primary
producer of steel, extending its presence in the steel value chain. 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 producers.
Volume growth sweetened by increasing EBITDA/tonne
With the commissioning of BSL's Phase-III expansion plan, we expect sales volume
to grow at a 26.2% CAGR over FY2010–15E, much higher than its peers. Despite
BSL not being integrated, cost of production is expected to be low due to a) its
unique combination of BF-EAF technology to produce steel and b) lower
conversion costs. The usage of BF-EAF technology will result in lower coal costs.
Hence, we expect EBITDA to register a 42.3% CAGR over FY2010–12E through a
combination of BF-EAF technology and low conversion cost. Thus, BSL is expected
to earn EBITDA/tonne of US $331 in FY2011E and US $345 in FY2012E.
Exhibit 9: Volumes to grow at 26.2% CAGR (FY10-15E) Exhibit 10: EBITDA/tonne at US $331 in FY2011
5.0 120
400 Captive usage of HR to lower cost
4.0 Post Phase-III
90
expansion 300
(mn tonnes)
3.0
(US $/tonne)
60
(%)
2.0 200
30
1.0 100
0.0 0
FY10 FY11E FY12E FY13E FY14E FY15E 0
FY06 FY09 FY12E FY15E
Sales Volume (LHS) Volume growth (RHS)
Source: Company, Angel Research Source: Company, Angel Research
Top supplier of niche auto-grade products
Over the years, BSL has been shifting its customer base from the trade segment to
OEMs/exports. We believe growing investments by foreign OEMs and the strategic
alliance with Sumitomo Metal will complement the company’s OEM relationships
and will likely help BSL mitigate demand risks.
August 02, 2010 6

7. Bhushan Steel | 1QFY2011 Result Update
Outlook and Valuation
At the CMP of Rs1,559, the stock is trading at 7.3x FY2011E and 6.0x FY2012E
EV/EBITDA. We expect BSL to register a 26.2% CAGR in volumes over
FY2010–15E on completion of its Phase-III expansion plan by October 2012 along
with EBITDA/tonne increasing to US $331 in FY2011E. Moreover, with debt/equity
expected to decline from 3.3x in FY2009 to 2.0x in FY2012E, we maintain our Buy
recommendation on the stock with a 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 EV/IC.
Exhibit 11: Key assumptions
Key assumptions FY11E FY12E
Revenue/tonne (Rs) 39,696 37,786
Sales volume (mn tonnes) 1.6 1.9
Source: Angel Research
Exhibit 12: EV/EBITDA band
45,000
17x
40,000
35,000 14x
30,000
11x
25,000
(Rs cr)
20,000 8x
15,000
5x
10,000
5,000
0
Apr-06 Apr-07 Apr-08 Apr-09 Apr-10
Source: Bloomberg, Angel Research
Exhibit 13: P/E band
4,500
17x
4,000
3,500
3,000 12x
2,500
(Rs)
2,000
7x
1,500
1,000
500 2x
0
Apr-06 Apr-07 Apr-08 Apr-09 Apr-10
Source: Bloomberg, Angel Research
August 02, 2010 7

8. Bhushan Steel | 1QFY2011 Result Update
Exhibit 14: P/BV band
4,000
3,500 3.5x
3,000
2,500 2.5x
(Rs)
2,000
1,500 1.5x
1,000
500 0.5x
0
Apr-06 Apr-07 Apr-08 Apr-09 Apr-10
Source: Bloomberg, Angel Research
Exhibit 15: Recommendation summary
Target Upside
Companies CMP Reco. Mcap P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) RoCE (%)
Price (%)
(Rs) (Rs) (Rs cr) FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
SAIL 203 - Neutral 83,971 - 13.4 11.8 2.2 1.9 8.8 7.6 17.9 17.6 16.3 16.9
Tata Steel 537 697 Buy 48,516 29.8 9.0 9.6 1.5 1.3 6.8 6.2 17.9 14.7 11.8 11.7
JSW Steel 1,117 1,344 Buy 29,038 20.4 14.9 11.4 1.5 1.3 7.0 5.5 13.9 12.4 12.5 12.6
Bhushan
1,559 1,979 Buy 6,623 26.9 6.8 5.3 1.6 1.2 7.3 6.0 26.0 26.1 12.6 14.0
Steel
Electrosteel 49 72 Buy 1,593 47.5 7.5 7.3 0.9 0.8 5.7 5.0 14.2 13.1 11.9 12.3
Godawari
250 322 Buy 673 28.9 4.7 3.5 1.0 0.8 3.5 2.3 26.1 26.7 21.2 23.5
Power
Sarda Energy 260 290 Accumulate 874 11.6 7.4 5.9 1.3 1.1 5.4 4.0 19.4 20.2 15.1 16.5
Prakash Ind. 175 232 Buy 2,353 32.9 7.9 5.3 1.2 1.0 5.5 4.2 19.7 23.2 16.6 18.7
Monnet Ispat 450 534 Buy 2,699 18.8 10.0 6.9 1.3 1.1 9.1 7.4 14.8 17.6 11.7 12.7
Source: Company, Angel Research
August 02, 2010 8

9. Bhushan Steel | 1QFY2011 Result Update
Profit & Loss Statement
Y/E March (Rs cr) FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Gross sales 4,179 4,645 5,395 6,004 6,800 7,709
Less: Excise duty (364) (467) (452) (363) (510) (578)
Net sales 3,815 4,177 4,943 5,641 6,290 7,131
Other operating income 23 28 14 0 40 50
Total operating income 3,838 4,205 4,957 5,641 6,330 7,181
% chg 37.4 9.6 17.9 13.8 12.2 13.5
Total expenditure 3,210 3,370 3,928 4,192 3,973 4,248
Net raw materials 2,843 2,973 3,352 3,538 3,212 3,314
Other mfg costs 316 323 475 570 650 793
Personnel 51 74 101 84 111 142
Other - - - - - -
EBITDA 628 835 1,029 1,449 2,357 2,933
% chg 58.6 33.0 23.2 40.8 62.7 24.4
(% of Net sales) 16.5 20.0 20.8 25.7 37.5 41.1
Depreciation 209 211 234 220 495 605
EBIT 419 624 795 1,229 1,862 2,327
% chg 82.0 48.8 27.4 54.7 51.5 25.0
(% of Net sales) 11.0 14.9 16.1 21.8 29.6 32.6
Interest charges 77 137 252 217 557 647
Other income 30 52 18 116 21 44
(% of PBT) 8.2 9.6 3.2 10.2 1.6 2.5
Share in profit of asso. - - - - - -
Recurring PBT 372 539 561 1,128 1,326 1,725
% chg 133.2 44.7 4.1 101.2 17.5 30.0
Extra. Inc/(Expense) - - - - - -
PBT (reported) 372 539 561 1,128 1,326 1,725
Tax 59 115 139 299 358 466
(% of PBT) 15.9 21.4 24.9 26.5 27.0 27.0
PAT (reported) 313 424 421 829 968 1,259
Add: Earnings of asso. - - - - - -
Less: Minority interest - - - - - -
Extra. Expense/(Inc.) - - - - - -
PAT after MI (reported) 313 424 421 829 968 1,259
ADJ. PAT 313 424 421 829 968 1,259
% chg 102.8 35.3 (0.6) 96.9 16.7 30.0
(% of Net sales) 8.2 10.1 8.5 14.7 15.4 17.7
Basic EPS (Rs) 75.0 99.8 99.2 195.3 228.0 296.4
Fully Diluted EPS (Rs) 74.4 99.8 99.2 195.3 228.0 296.4
% chg 97.2 34.0 (0.6) 96.9 16.7 30.0
August 02, 2010 9

10. Bhushan Steel | 1QFY2011 Result Update
Balance Sheet
Y/E March (Rs cr) FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
SOURCES OF FUNDS
Equity share capital 42 42 42 42 42 42
Reserves & surplus 1,172 1,583 1,992 2,809 3,764 5,011
Shareholders’ funds 1,215 1,625 2,034 2,851 3,807 5,054
Share warrants - - 400 400 400 400
Minority interest - - - - - -
Total loans 3,242 5,718 8,066 10,366 11,346 11,826
Deferred tax liability 124 197 246 246 246 246
Total liabilities 4,580 7,540 10,747 13,864 15,800 17,526
APPLICATION OF FUNDS
Gross block 2,694 2,927 3,282 8,482 10,482 11,582
Less: Acc.
970 1,168 1,396 1,616 2,110 2,716
depreciation
Net Block 1,723 1,759 1,886 6,866 8,372 8,866
Capital work-in-
1,892 4,568 7,400 5,800 6,300 7,700
progress
Goodwill - - - - - -
Investments 21 58 114 114 114 114
Current assets 1,763 2,418 2,744 3,026 3,464 3,824
Cash 100 28 124 301 689 898
Loans & advances 367 644 769 769 769 769
Other 1,295 1,747 1,850 1,956 2,006 2,157
Current liabilities 819 1,264 1,396 1,943 2,450 2,978
Net current assets 944 1,155 1,347 1,084 1,014 846
Mis. exp. not written
- - - - - -
off
Total assets 4,580 7,540 10,747 13,864 15,800 17,526
August 02, 2010 10

11. Bhushan Steel | 1QFY2011 Result Update
Cash flow statement
Y/E March (Rs cr) FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
Profit before tax 372 539 561 1,128 1,326 1,725
Depreciation 209 211 234 220 495 605
Change in working
(230) (372) (468) 441 458 376
capital
Less: Other income 42.9 123.9 255.9 0.0 - -
Direct taxes paid 41 63 46 299 358 466
Cash flow from
353 439 537 1,490 1,920 2,241
operations
(Inc.)/ Dec. in fixed
(1,323) (2,415) (1,770) (3,600) (2,500) (2,500)
assets
(Inc.)/ Dec. in
(1) (36) (49) - - -
investments
(Inc.)/ Dec. in loans
- - - - - -
and advances
Other income 26 17 13 - - -
Cash flow from
(1,298) (2,434) (1,806) (3,600) (2,500) (2,500)
investing
Issue of equity 20 - 400 - - -
Inc./(Dec.) in loans 1,206 2,430 1,956 2,300 980 480
Dividend paid 12 11 8 12 12 12
Others 251 495 982 - - -
Cash flow from
964 1,923 1,366 2,287 968 468
financing
Inc./(Dec.) in cash 19 (73) 97 177 388 208
Opening cash bal. 82 100 28 124 301 689
Closing cash bal. 100 28 124 301 689 898
August 02, 2010 11

12. Bhushan Steel | 1QFY2011 Result Update
Key ratios
Y/E March FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
Valuation ratio (x)
P/E (on FDEPS) 21.1 15.6 15.7 8.0 6.8 5.3
P/CEPS 12.7 10.4 10.1 6.3 4.5 3.6
P/BV 5.5 4.1 2.7 2.0 1.6 1.2
Dividend yield (%) 0.2 0.2 0.2 0.2 0.2 0.2
EV/Sales 2.6 2.9 2.9 3.0 2.7 2.5
EV/EBITDA 15.5 14.7 14.2 11.5 7.3 6.0
EV/Total assets 2.1 1.6 1.4 1.2 1.1 1.0
Per share data (Rs)
EPS (Basic) 75.0 99.8 99.2 195.3 228.0 296.4
EPS (fully diluted) 73.8 99.8 99.2 195.3 228.0 296.4
Cash EPS 122.9 149.5 154.4 247.0 344.4 439.0
DPS 2.5 2.5 2.5 2.5 2.5 2.5
Book value 286.0 382.7 573.2 765.6 990.6 1,284.2
DuPont analysis
EBIT margin 11.0 14.9 16.1 21.8 29.6 32.6
Tax retention ratio (%) 84.1 78.6 75.1 73.5 73.0 73.0
Asset turnover (x) 1.0 0.7 0.5 0.5 0.4 0.5
RoIC (Post-tax) 9.6 8.2 6.6 7.5 9.5 10.8
Cost of debt (post tax) 2.5 2.4 2.7 2.2 3.7 4.1
Leverage (x) 2.6 3.5 3.3 3.1 2.5 2.0
Operating RoE 28.0 28.7 19.2 23.7 24.2 24.2
Returns (%)
RoCE (Pre-tax) 11.1 10.3 8.7 10.0 12.6 14.0
Angel RoIC (pre-tax) 19.9 22.6 25.8 22.4 22.5 26.2
RoE 29.7 29.8 20.8 29.2 26.0 26.1
Turnover ratios (x)
Asset turnover (gross
1.7 1.5 1.6 1.0 0.7 0.7
block)
Inventory (days) 97 139 134 130 130 130
Receivables (days) 52 54 46 45 50 50
Payables (days) 79 114 80 90 100 100
WC cycle (days) 48 57 62 67 64 61
Solvency ratios (x)
Net debt to equity 2.6 3.5 3.3 3.1 2.5 2.0
Net debt to EBITDA 5.0 6.8 7.7 6.9 4.5 3.7
Interest coverage 5.4 4.6 3.2 5.7 3.3 3.6
August 02, 2010 12

13. Bhushan Steel | 1QFY2011 Result Update
Research Team Tel: 022 - 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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Disclosure of Interest Statement Bhushan Steel
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
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%)
August 02, 2010 13