JSW Steel Q2FY12 Result Update by icestar

VIEWS: 5 PAGES: 7

									                                                                                                                                                 JSW Steel




                                                                                                                                                                                      Result Update
                                                                                                                       JSW ISPAT eating into profitability

                                                                                   ¾ Consolidated topline in line with revised estimates at Rs 81.4
November 14, 2011

Reco                                             Previous Reco                        bn, up 36% YoY and 10% QoQ aided by better performance at
Accumulate                                                                  UR        US unit. Blended avg. realizations stood at Rs 44841/tonne
CMP                                                  Target Price                  ¾ EBITDA at Rs 13.94 bn was up 36% YoY but down 3% QoQ.
Rs 657                                                                 Rs742          While margin remained flat YoY but fell 218 bps QoQ. Consol
EPS change FY12E/13E (%)                                                    NA        EBITDA/ tonne came in at Rs 7,406 (US$162) for the quarter
Target Price change (%)                                                   NA       ¾ APAT at Rs 6,042 mn though was up 66% YoY and 23% QoQ,
Nifty                                                                   5,148
                                                                                      forex loss of Rs 5.14 bn and adjustment on account of Ispat
Sensex                                                                 17,119         of Rs 7.54 bn resulted into a net loss of Rs 6.7 bn
Price Performance                                                                  ¾ Factoring in higher costs and near term challenges revised
(%)                                     1M       3M           6M 12M                  earnings for both FY12 and FY13. Valuing at 5.5xFY13 EV/
Absolute                                 9         0         (29) (49)                EVBITDA, we arrive at a target price of Rs 742; Accumulate
Rel. to Nifty                            9       (1)         (24) (39)
Source: Bloomberg                                                                  US unit aided consolidated nos with higher volume and EBITDA
                                                                                   After strong volume nos with crude steel production of 1.738 mt and sales of 1.882 mt
Relative Price Chart
1300    Rs                                                              %    10    for the standalone entity JSW Steel’ consolidated performance highlights better than
1140                                                                         -2
                                                                                   expected contribution from its US plate and pipe mill. The unit produced 0.101 mt of
                                                                                   plates (with 37% cap. utilization against 23% in Q1FY12) and 0.017 mt of pipes (with
 980                                                                         -14
                                                                                   12% capacity utilization against 7% in Q1FY12). The subsidiary sold 0.069 mt and
 820                                                                         -26
                                                                                   0.016 mt of plates and pipes respectively and earned an EBITDA of US$6.44 mn. The
 660                                                                         -38   average realization for the unit also improved on QoQ basis to US$1180/ tonne. On the
 500                                                                         -50
                                                                                   other hand Chile mines made a lower than expected shipment of 0.15 mt of iron ore and
  Nov-10     Jan-11       Mar-11        May-11    Jul-11      Sep-11

                      JSW Steel (LHS)             Rel to Nifty (RHS)
                                                                                   reported a topline and EBITDA of US$25.7 mn and US$7.22 mn respectively. This
                                                                                   implies an average realizations of US$173/ tonne and EBITDA/ tonne US$49, down
Source: Bloomberg
                                                                                   QoQ. JSW Ispat produced 0.61 mt of HR coils with a capacity utilization of 74%.
Stock Details
Sector                                           Metals & Mining                   Accounting Ispat’s provisions swallowed bottomline
Bloomberg                                                      JSTL@IN             During Q1FY12 JSW Ispat made a provision of Rs 12.5 bn towards towards diminution
Equity Capital (Rs mn)                                                  2231       in value of investments, doubtful overdue advances and debtors and long pending
Face Value(Rs)                                                              10     material in transit. Accounting of the entire amount during this quarter swallowed the
No of shares o/s (mn)                                                       223    entire bottomline of the company in Q2FY12. We believe Ispat would remain in loss at
                                                                                   the PAT level in the coming year too and that would continue to dent JSW Steel’s
52 Week H/L                                                   1,300/532
                                                                                   profitability at the consolidated level.
Market Cap (Rs bn/USD mn)                                     147/2,923
Daily Avg Volume (No of sh)                                       2527765          Karnataka issues continue to weigh; might see some relief
Daily Avg Turnover (US$mn)                                              32.1
                                                                                   We believe the iron ore situation in Karnataka to improve going forward, however, not in
Shareholding Pattern (%)                                                           the immediate future. Importantly even if the supply issue is resolved we feel cost of iron
                              Sep-11 Jun-11 Mar-11
                                                                                   ore to remain higher putting pressure on the margins.

Promoters                               37.7           37.7             37.7
                                                                                   Valuation: Accumulate
FII/NRI                                 42.8           45.4             45.8
                                                                                   After witnessing sharp correction at the CMP of Rs 657, the stock trades at 7.7xFY13
Institutions                             4.6               4.8              4.9
                                                                                   EPS and 5.2xFY13 EV/ EBITDA. Considering slowing down of global demand and
Private Corp                             4.4               3.4              3.5
                                                                                   challenges ahead we value the stock at 5.5xFY13 EV/ EBITDA to arrive at a target price
Public                                  10.6               8.7              8.1    of Rs 742/ share. Assign Accumulate rating on the stock.
Source: Capitaline

Goutam Chakraborty
                                                                                   Financials                                                                          (Rs mn)
goutam.chakraborty@emkayglobal.com                                                 YE-          Net      EBITDA                  EPS     EPS     RoE            EV/
+91 22 6612 1275
                                                                                   Mar       Sales     (Core)   (%)     APAT     (Rs)   % chg    (%)    P/E    EBITDA      P/BV
Jagdish Agarwal
                                                                                   FY10     190,738   41,873    22.0    15,976   66.4     36.7   17.8    9.9     6.3        1.4
jagdish.agarwal@emkayglobal.com
+91 22 6612 1381                                                                   FY11     241,161   47,795    19.8    17,540   72.9      9.8   11.2    9.0     5.8        0.9

Prince Poddar                                                                      FY12E    312,996   51,978    16.6     6,942    9.1    -87.6    1.4   72.4     6.4        1.0
prince.poddar@emkayglobal.com                                                      FY13E    374,019   67,515    18.1    20,521   85.3    841.4   11.8    7.7     5.2        0.9
+91 22 6612 1238


Emkay Global Financial Services Ltd                                                                                                                                               1
                                                  JSW Steel                                                                                  Result Update

  Key Financials – Quarterly (Consolidated)
  Rs mn                          Q2FY11     Q3FY11     Q4FY11      Q1FY12       Q2FY12        YoY (%)      QoQ (%)       H1FY12          H1FY11      YoY (%)
  Revenue                         59,722     60,026     72,833      74,387        81,443            36.4       9.5       155,830         108,302        43.9
  Expenditure                    (49,495)   (49,862)   (56,213)    (60,039)     (67,505)            36.4      12.4      (127,544)       (87,291)        46.1
  as % of sales                     82.9       83.1       77.2           80.7       82.9                                        81.8        80.6
  Consumption of RM              (41,335)   (41,725)   (46,497)    (45,736)     (52,298)            26.5      14.3       (98,034)       (70,898)        38.3
  as % of sales                     69.2       69.5       63.8           61.5       64.2                                        62.9        65.5
  Employee Cost                   (1,563)    (1,524)    (1,598)     (2,135)       (1,992)           27.4      (6.7)       (4,127)         (3,246)       27.2
  as % of sales                      2.6        2.5        2.2            2.9        2.4                                         2.6         3.0
  Other expenditure               (6,597)    (6,613)    (8,118)    (12,167)     (13,216)        100.3          8.6       (25,382)       (13,148)        93.1
  as % of sales                     11.0       11.0       11.1           16.4       16.2                                        16.3        12.1
  EBITDA                          10,227     10,164     16,620      14,348        13,938            36.3      (2.9)       28,286          21,011        34.6
  Depreciation                    (3,791)    (3,906)    (4,288)     (4,401)       (4,554)           20.1       3.5        (8,955)         (7,403)       21.0
  EBIT                             6,436      6,258     12,332       9,947         9,384            45.8      (5.7)       19,331          13,608        42.1
  Other Income                     1,634         38           -          170         363        (77.8)       114.0              533        1,666       (68.0)
  Interest                        (2,614)    (1,968)    (2,172)     (2,620)       (3,076)           17.7      17.4        (5,696)         (5,345)        6.6
  PBT                              5,456      4,328     10,160       7,497         6,671            22.3     (11.0)       14,168           9,929        42.7
  Total Tax                       (1,816)    (1,501)    (2,920)     (2,582)        (629)        (65.4)       (75.6)       (3,210)         (3,402)       (5.6)
  Adjusted PAT                     3,640      2,827      7,240       4,915         6,042            66.0      22.9        10,958           6,527        67.9
  Adj.PAT after MI                    92         90        697           (64)     (7,595)            NA        NA         (7,659)            160         NA
  Adj. PAT with 30% tax rate       3,733      2,917      7,936       4,852        (1,553)      (141.6)      (132.0)        3,299           6,686       (50.7)
  Extra ordinary items             3,733      2,917      7,936       4,852         4,470            19.7      (7.9)
  Reported PAT                          -          -          -             -     (5,140)              -          -       (5,140)                -             -
  Reported EPS                     3,733      2,917      7,936       4,852        (6,693)      (279.3)      (238.0)       (1,842)          6,686         NA


  Margins (%)                                                                                   (bps)        (bps)                                     (bps)
  EBIDTA                            17.1       16.9       22.8           19.3       17.1             (1)     (218)              18.2        19.4        (125)
  EBIT                              10.8       10.4       16.9           13.4       11.5             75      (185)              12.4        12.6         (16)
  EBT                                9.1        7.2       13.9           10.1        8.2            (94)     (189)               9.1         9.2          (8)
  PAT                                6.1        4.7        9.9            6.6        7.4            132         81               7.0         6.0         101
  Effective Tax rate                33.3       34.7       28.7           34.4        9.4       (2,385)      (2,501)             22.7        34.3      (1,161)



  Chile iron ore contribution lower than estimates                              US plate and pipe mills deliver better performance
                                             Q2FY12           Q1FY12                                                  Q2FY12           Q2FY11        Q1FY12
   Production (tonne)                        202,507          176,589            Production (NT)
   Sales (tonne)                             147,807          194,347            Plate Mill                           100,811           37,699        56,815
   Financials                               (USD mn)       (USD mn)
                                                                                 Pipe Mill                             16,855            9,495         8,986
   Revenue                                      25.7              34.3
                                                                                 Sales (NT)
   EBITDA                                        7.2              11.5
                                                                                 Plate Mill                            68,818           23,040        46,875
   Depreciation                                  1.1               1.4
                                                                                 Pipe Mill                             16,369           11,970         9,716
   Finance charges                               0.6               0.6
                                                                                 Financials ( US$ mn)
   PBT                                           5.5               9.6
   PAT                                           4.6               7.9           Turnover                              100.51             36.4         61.95

   Realization/ tonne (US$)                      174              176            EBITDA+ Other income                    6.46             0.85          3.67
   EBITDA/ tonne (US$)                            49               59            Profit After Tax                      (7.62)          (13.14)        (9.36)




Emkay Research           14 November 2011                                                                                                                          2
                                    JSW Steel                                                                     Result Update


                                    Key highlights
                                    §   US plate mill operating at 37% utilization, while pipe mill has been operating at a lower
                                        capacity of 12%. While pipe mill has been witnessing higher enquiries, plate mill is likely
                                        to see some slowdown

                                    §   Chile operations produced a total of 0.15 mt (0.18 mt in Q1FY12) and earned an
                                        EBITDA of US$ 7.22 mn

                                    §   Gross debt at the end of Q2FY12 stood at Rs184 bn, cash and cash equivalent at Rs
                                        17.1 bn and investments

                                    §   During the quarter, the consolidated D/E jumped to 0.99 (against 0.89 in Q1FY12). The
                                        weighted average interest cost of debt fell to 6.57% as against 6.86% during Q1FY12

                                    §   During the quarter, JSW MI Steel Service Center Private Limited (MISI JV), a 50:50 JV
                                        between JSW Steel India and Marubeni, Itochu Japan was incorporated in the company
                                        with an objective of setting up a service center in Northern India in a phased manner.
                                        The project cost for the first phase (with a capacity of 180,000 tons per annum) is
                                        estimated to be Rs 12.2 mn, to be funded by 1:1 debt equity. The expected date of
                                        commencement of production under the first phase is Q4FY13

                                    §   During the quarter, JSW Ispat made a provision of Rs 12.47 bn towards diminution in
                                        value of investments, doubtful overdue advances and debtors and long pending material
                                        in transit. To this, JSW Ispat has reported a consolidated net loss of Rs 12.02 bn for
                                        Q2FY12



                                    Earnings revised for FY12 and FY13 to reflect margin pressure
                                    Iron ore cost for the quarter rose by Rs 825/ tonne over the blended average cost of Rs
                                    2750/ tonne for Q1FY12. The landed cost for this e-auctioned iron for JSW Steel remained
                                    Rs 3300/ tonne. Though, the e-auction process has been stabilizing, transportation of the
                                    ore from the mines still remains a problem for the company like other players in the region.
                                    Ban on iron ore mining forced the company to reduce its output by 450,000 tonne. We
                                    believe the process would get better going forward and a better approach might be adopted
                                    by the concerned authorities. JSW Steel along with other players has been representing its
                                    case regarding this with the CEC and the SC. However, even if supply issues get resolved,
                                    cost pressures are not likely to ease anytime soon, as it would be difficult for the company
                                    to procure iron ore at price it used to buy from the local buyer prior to mining ban in
                                    Karnataka. Better integration through supply of own coking coal from US would off course
                                    provide some relief, however we would wait further to see actual costing, grade etc to factor
                                    in any impact out of that.

                                    Taking into consideration the above facts, we assume a sales of volume of 7.2 mt and 8.5
                                    mt for FY12 and FY13 respectively. Our FY12E and FY13E EPS stand at Rs 9 and Rs 85
                                    respectively. Higher volume would be a positive surprise for our estimates.

                                    Valuation
                                    After witnessing sharp correction at the CMP of Rs 657, the stock trades at 7.7xFY13 EPS
                                    and 5.2xFY13 EV/ EBITDA. Considering slowing down of global demand and challenges
                                    ahead we value the stock at 5.5xFY13 EV/ EBITDA to arrive at a target price of Rs 742/
                                    share. Assign Accumulate rating on the stock. While, fall in raw material costs and higher
                                    capacity utilizations would warrant a better valuation, further contraction in margins with any
                                    new provisioning for Ispat would pose a threat to our estimates.




Emkay Research   14 November 2011                                                                                                 3
                                    JSW Steel                                                                       Result Update

                                    Series of events for JSW Steel regarding Karnataka Mining Ban
                                      th
                                    29 July, 2011 – The Supreme Court bans mining in Bellary region
                                    The Supreme Court imposed an interim ban on mining in a key iron-ore rich region of
                                    Bellary on concerns of environment degradation. The impact on JSW Steel were negative
                                    on two counts a) rise in iron ore procuring costs due to non- availability of iron ore in Bellary
                                    region and b) steel volume loss because of the same.

                                    20th August, 2011 - CEC recommends mining ban in chitradurga and
                                    Tumkur: JSW Steel and Sesa Goa to be impacted
                                    The Central Empowered Committee (CEC), as directed by the Supreme Court submitted its
                                    report on iron mining in Karnataka, mainly highlighting impact on environment and forest in
                                    Chitradurga and Tumkur districts.

                                    The CEC was of the view that mining of iron ore in district Tumkur had been done in an
                                    environmentally unsustainable manner and without taking into consideration the imperatives
                                    of intergeneration equity, large scale illegalities and irregularities had taken place in the
                                    matter of mining of iron ore. and On Chitradurga it said, that the mining iwas being done in
                                    a reckless and irresponsible manner with the prime objective of over-exploitation of iron ore
                                    for purely short term private gains.

                                    The CEC was also of the view that the level of illegality and environmental degradation
                                    caused by mining leases in district Tumkur were in no way less that that which had taken
                                    place in district Bellary (even though the level of production was much less than Bellary.

                                    As a result, the CEC had recommended banning mining activities in Chitradurga and
                                    Tumkur regions.

                                    JSW Steel’s clarifications

                                     ¡     The company said that it had been sourcing 40- 50,000 tonne/ day of iron ore from all
                                           the three districts in Karnataka and also from NMDC’s Bailadila mine in Chattisgarh.
                                           The distribution is as follows: Bellary- 10,000- 20,000 tonne/ day; Chitradurga &
                                           Tumkur- 20,000 tonne/ day and Chattisgarh- 10,000 tonne/ day

                                     ¡     JSW Steel said that the CEC also had mentioned that steps would be taken to ensure
                                           that the steel mills in those areas were affected

                                     ¡     There was an inventory of 25 mt of iron ore lying in Bellary, Chitradurga and Tumkur
                                           districts. The company along with other industry bodies had urged CEC and also
                                           appled before the SC to consider releasing those to the steel mills to enable them to
                                           maintain their production

                                    26th August, 2011 – The SC banned mining in Chitradurga and Tumkur
                                    districts in Karnataka
                                    The Supreme Court (SC) banned mining in Chitradurga and Tumkur region of Karnataka
                                    with immediate effect.

                                    JSW Steel had been sourcing 20,000 tonne iron ore / day from Chitradurga and Tumkur
                                    region, 10,000 tonne/ day from Chhattisgarh (NMDC) and 20,000 tonne/ day from Bellary
                                    (NMDC).

                                    After the SC order on 26th August, JSW Steel said that with the existing inventory and iron
                                    ore at transit would be enough for it to run at desired capacity (production @8.75 mtpa).
                                    Also, the SC had asked the CEC (based on its own recommendations) to submit a report on
                                    the total inventory of iron ore at the region (25 mt as per CEC) and how it should be
                                    allocated so that there should be a balance between the environmental issues and
                                    economic development in the region.

                                    The SC also had asked the CEC to study in detail the requirement of iron ore for the steel
                                    industry and also the mining activities by different entities in the region within three months.
                                    Thus, this ban on mining is not likely to be removed before three months.

                                    Out of 25 mt iron ore inventory lying there, 11 mt is of higher grade i.e. >60% Fe grade and
                                    the remaining 14 mt is <60% Fe grade.

Emkay Research   14 November 2011                                                                                                   4
                                    JSW Steel                                                                   Result Update

                                    2nd September, 2011- The SC allowed release of 25 mt iron ore inventory in
                                    Karnataka
                                    The Supreme Court (SC) as per CEC recommendations allowed release of ~25 mt iron ore
                                    in Karnataka (Bellary, Chitradurga and Tumkur). The distribution was allowed at the rate of
                                    1.5 mt per month through auction, which would be conducted by the Mineral State Trading
                                    Corporation (MSTC) under Ministry of Steel. The SC also had clearly said that there would
                                    be no partcipation of traders or middlemen- thus only end users would be allowed to
                                    participate. Further, pellet producers wee also prohibited to export their produce and were
                                    only allowed to sell to the domestic steel producers.

                                    26th September, 2011 - JSW Steel announced production cut to 30% at
                                    Vijaynagar
                                    JSW Steel announced production cut to 30% at Vijaynagar due to supply disruptions, as the
                                    SC had asked that NMDC’s iron ore from Karnataka should also be sold through e-auction.

                                    Three major issues JSW Steel highlighted:

                                     ¡   JSW had approached to Supreme Court that iron ore sales from NMDC, Karnataka
                                         should not be a part of the auction

                                     ¡   The problem had been also with regard to logistic issue after auction, physical
                                         delivery issues due to working hours, permit for transportation and other logistic
                                         issues. That’s the reason most of the stock bought was not delivered

                                     ¡   Pricing of iron ore through auction remained a major issue, as currently the pricing is
                                         done on proportionate basis instead of grade-wise. This allows some low grade of ore
                                         to be auctioned at a higher basis

                                    JSW Steel currently has been procuring iron ore from e-auction in Karnataka and
                                    through NMDC’s Chattisgarh mines. The logistics and pricing of the ore have still
                                    been issues that need proper focus and attention. We believe, the same to get
                                    resolved within due course of time. Meanwhile, CEC has been in the process of
                                    recommending restart of mining activities in select parts starting with Bellary district
                                    followed by Chitradurga and Tumkur to the SC. Hearing on this matter is likely to
                                    take place sooner, which would bring further clarity regarding supply of iron ore in
                                    Karnataka. We would be watching the events closely and make necessary changes in
                                    our assumptions.




Emkay Research   14 November 2011                                                                                               5
                                                      JSW Steel                                                                  Result Update

  Financials (Consolidated)

  Income Statement                                                          Balance Sheet
  Y/E, Mar (Rs. mn)               FY10        FY11      FY12E      FY13E    Y/E, Mar (Rs. mn)              FY10      FY11     FY12E     FY13E
  Net Sales                     190,738   241,161      312,996    374,019   Equity share capital           1871      2231      2406      2406
  Growth (%)                       18.8        26.4       29.8       19.5   Reserves & surplus            87,911   154,978   154,040   171,442
  Expenditure                   148,865   193,366      261,018    306,504   Net worth                     89,781   157,209   156,446   173,848
  Raw Materials                 122,788   159,120      210,096    237,958   Minority Interest              2187      2358      2358      2358
  Employee Cost                   4,795       6,368      8,842     11,221   Secured Loans                127,355   113,384   153,384   178,384
  Other Exp                      21282     27879         34252     43012    Unsecured Loans               20,901    37,421    37,421    37,421
  EBITDA                         41,873    47,795       51,978     67,515   Loan Funds                   148,256   150,805   190,805   215,805
  Growth (%)                       34.9        14.1        8.8       29.9   Net deferred tax liability    16848     20494     20494     20494
  EBITDA margin (%)                22.0        19.8       16.6       18.1   Total Liabilities            354,063   458,903   526,771   590,918
  Depreciation                   12987     15597         18151     20488    Gross Block                  284,090   323,183   365,032   409,544
  EBIT                           28,886    32,198       33,827     47,027   Less: Depreciation            12,987    15,597    18,151    20,488
  EBIT margin (%)                  15.1        13.4       10.8       12.6   Net block                    214,528   258,107   289,956   319,467
  Other Income                    4194        1704       1319       1870    CWIP                          69562     65077     75077     90077
  Interest expenses              11080        9485       12975     14675    Investment                     6,282    29,138    29,138    29,138
  PBT                            22,000    24,417       22,172     34,222   Current Assets                54,700    95,649   121,668   141,304
  Tax                             6467        7823       5976      11293    Inventories                   28,667    44,097    65,827    68,971
  Effective tax rate (%)           29.4        32.0       27.0       33.0   Sundry debtors                 6,964     9,333    12,863    15,371
  Adjusted PAT                   15,533    16,594       16,195     22,929   Cash & bank balance            3,030    20,480    14,509    22,975
  (Profit)/loss from
                                   443         946       -9253      -2408   Loans & advances              16,038    21,568    28,298    33,815
  JV's/Ass/MI
  Adjusted PAT after MI          15,976    17,540        6,942     20,521   Other current assets              0         0         0         0
  Growth (%)                       63.0         9.8      -60.4      195.6   Current lia & Prov            87,913   114,358   142,989   164,734
  Net Margin (%)                   14.1        14.3       15.1       16.1   Current liabilities           82,582   106,610   134,808   156,120
  E/O items                          0           0          0          0    Provisions                     5,331     7,748     8,181     8,614
  Reported PAT                   15,976    17,540        6,942     20,521   Net current assets           -33,213   -18,708   -21,321   -23,430
  Growth (%)                      762.2         9.8      -60.4      195.6   Total Assets                 354,063   458,903   526,771   590918


  Cash Flow                                                                 Key Ratios
  Y/E, Mar (Rs. mn)               FY10        FY11      FY12E      FY13E    Y/E, Mar                       FY10      FY11     FY12E     FY13E
  PBT (Ex-Other income)          17,806    22,713       20,853     32,352   Profitability (%)
  Depreciation                   12,987    15,597       18,151     20,488   EBITDA Margin                   21.8      19.8      16.6      18.1
  Interest Provided              11,080       9,485     12,975     14,675   Net Margin                       8.4       7.3       2.2       5.5
  Other Non-Cash items          -10,017   -14,179      -24,649    -23,125   ROCE                             9.4       7.4       5.8       8.3
  Chg in working cap             -4,710   -13,137       -4,291      9,642   ROE                             17.8      11.2       1.4      11.8
  Tax paid                        6,467       7,823      5,976     11,293   RoIC                            17.3      15.4      15.6      19.8
  Operating Cashflow             33,613    28,302       29,014     65,326   Per Share Data (Rs)
  Capital expenditure            33,911    50,778       48,193     47,705   EPS                             66.4      72.9       9.1      85.3
  Free Cash Flow                 67,524    79,080       77,208    113,031   CEPS                           120.4     137.8     104.3     170.5
  Other income                     128         526          0          0    BVPS                           480.0     704.6     650.2     722.5
  Investments                    -2,033   -23,863           0          0    DPS                              0.9       1.3       1.1       1.1
  Investing Cashflow            -29,323   -76,331      -60,000    -65,000   Valuations (x)
  Equity Capital Raised             -99    59,356         175          0    PER                              9.9       9.0      72.4       7.7
  Loans Taken / (Repaid)         11,223    -6,424       40,000     25,000   P/CEPS                           7.5       6.6       8.7       5.3
  Interest Paid                 -11,080    -9,485      -12,975    -14,675   P/BV                             1.4       0.9       1.0       0.9
  Others                        -16,885    -1,972      -15,160    -16,860   EV / EBITDA                      6.3       5.8       6.4       5.2
  Financing Cashflow             -5,762    50,961       25,015      8,140
  Net chg in cash                -2,062       2,932     -5,971      8,466   Gearing Ratio (x)
  Opening cash position           5,093       3,030     20,480     14,509   Net Debt/ Equity                 1.5       0.6       0.9       0.9
  Closing cash position           3,030    20,480       14,509     22,975   Net Debt/EBIDTA                  3.5       2.7       3.4       2.9




Emkay Research             14 November 2011                                                                                                      6
                                                                         JSW Steel                                                                                                           Result Update



                                                                       Recommendation History: JSW Steel – JSTL IN

                                                                         Date                 Reports                                                                  Reco                   CMP          Target

                                                                         21/10/2011           JSW Steel Q2FY12 Standalone Result Update                                UR                      580              NA

                                                                         27/07/2011           JSW Steel Q1FY12 Result Update                                           Accumulate              870          1,016

                                                                         17/05/2011           JSW Steel Q4FY11 Result Update                                           Buy                     921          1,169

                                                                         06/04/2011           JSW Steel Management Meet Update                                         Accumulate              991          1,060


                                                                       Recent Research Reports

                                                                         Date                Reports                                                                Reco                       CMP         Target

                                                                         11/11/2011          Godawari Power Q2FY12 Result Update                                    Buy                          119           193

                                                                         11/11/2011          Tata Steel Q2FY12 Result Update                                        Buy                          430           503

                                                                         25/10/2011          Sesa Goa Q2FY12 Result Update                                          Hold                         211           239

                                                                         24/10/2011          Sterlite Industries Q2FY12 Result Update                               Accumulate                   116           162




                                                            Emkay Global Financial Services Ltd.
                   Corporate Add: B – Ruby Mills Tower, 7th Floor, South East Wing, Senapati Bapat Marg, Dadar (W), Mumbai - 400028 India.
                                                     Tel.: +912266121212 Web: www.emkayglobal.com
  DISCLAIMER: This document is not for public distribution and has been furnished to you solely for your information and may not be reproduced or redistributed to any other person. The manner
  of circulation and distribution of this document may be restricted by law or regulation in certain countries, including the United States. Persons into whose possession this document may come are
  required to inform themselves of, and to observe, such restrictions. This material is for the personal information of the authorized recipient, and we are not soliciting any action based upon it. This
  report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. No person associated with Emkay
  Global Financial Services Ltd. is obligated to call or initiate contact with you for the purposes of elaborating or following up on the information contained in this document. The material is based upon
  information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon. Neither Emkay Global Financial Services Ltd., nor any person connected
  with it, accepts any liability arising from the use of this document. The recipient of this material should rely on their own investigations and take their own professional advice. Opinions expressed are
  our current opinions as of the date appearing on this material only. While we endeavor 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. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
  We and our affiliates, officers, directors, and employees world wide, including persons involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in,
  and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
  market maker in the financial instruments of the company (ies) discussed herein or may perform or seek to perform investment banking services for such company(ies)or act as advisor or lender /
  borrower to such company(ies) or have other potential conflict of interest with respect to any recommendation and related information and opinions. The same persons may have acted upon the
  information contained here. No part of this material may be duplicated in any form and/or redistributed without Emkay Global Financial Services Ltd.'s prior written consent. No part of this document
  may be distributed in Canada or used by private customers in the United Kingdom. In so far as this report includes current or historical information, it is believed to be reliable, although its accuracy and
  completeness cannot be guaranteed.



Emkay Research                 14 November 2011                                                                                                                                   www.emkayglobal.com

								
To top