JINDAL STEEL & POWER LTD
Jindal Steel & Power (JSPL) has announced its results for the quarter ended September
2010. It has reported consolidated net profit of Rs 8,942mn as against Rs 8,084mn, a
growth of 10.6% on a Y-o-Y basis. Consolidated net sales jumped 25.36% to Rs 30,780mn
from Rs 24,556mn on Y-o-Y basis. On a Q-o-Q basis, net revenues
while the net profit was same as last quarter.
The key takeaways from the result are
• The revenues from Iron and steel business increased by 46%
from 15070mn. The revenues from Power segment declined around 1%
10,386 from Rs. 11,091mn.
• Total income increased to Rs 30,858mn during the quarter ended 30 September
2010 from Rs 24,578mn in the quarter ended 30 September 2009.
• Steel production rose 24% to about 562,000 metric tonne, while the
customized steel increased 15% to 462,429 MT. Power p
to 780miliion units.
• Two units of 135 megawatts, one unit has been commercially commissioned and
second unit has been synchronized in stabilization phase.
capacity utilization even during the stabilization
Based on a consolidated FY12 P/E multiple of 16
company works out to Rs 776.
Financial Snapshot
Projections (Rs. Mn) Q2FY10 Q2FY11
Net Revenue 24,556 30,780
Total Income 24,758 30,858
EBIDTA 13,362 15,054
EBIDTA % 54% 49%
PAT after MI 8,084 8,942
NPM % 33% 29%
EPS Rs 8.69 9.45
BVPS Rs
ROE %
PER x
P/B Ratio
JINDAL STEEL & POWER LTD HOLD
(JSPL) has announced its results for the quarter ended September
2010. It has reported consolidated net profit of Rs 8,942mn as against Rs 8,084mn, a
basis. Consolidated net sales jumped 25.36% to Rs 30,780mn
basis, net revenues increased by 3% Q-o-Q
The revenues from Iron and steel business increased by 46% Y-o-Y to Rs. 21,967mn
The revenues from Power segment declined around 1% Y-o-Y to Rs.
mn during the quarter ended 30 September
in the quarter ended 30 September 2009.
o about 562,000 metric tonne, while the sale of
. Power production is also up by 11%
Two units of 135 megawatts, one unit has been commercially commissioned and
ized in stabilization phase. It has achieved 100%
olidated FY12 P/E multiple of 16, the fair value for the Power profits to decline due to fall in merchant power rates
Q2FY11 % chg FY09A FY10A
30,780 25% 108,510 110,915
30,858 25% 109,134 111,518
15,054 13% 52,318 59,080
49% 48% 53%
8,942 11% 30,457 35,730
29% 28% 32%
9.45 9% 32.61 38.26
75 111
43% 35%
BSE / NSE Code
CMP Rs (29th Oct’10)
Market Cap ( Rs mn)
52 Week High-low
JSPL
Sensex
Nifty
STOCK RETURN (%)
STOCK DATA
Recommendations
Strong Buy
Buy
Hold
Reduce
Sell
Strong Buy – Expected Returns > 20% p.a.
Buy – Expected Returns from 10 to 20% p.a.
Hold – Expected Returns from 0 % to 10% p.a.
Reduce – Expected Returns from 0 % to 10% p.a. with possible
downside risk
Sell – Returns < 0 %
October 30, 2010
to decline due to fall in merchant
% chg FY11E FY12E
2% 130,783 155,109
2% 131,914 156,169
13% 62,894 74,312
48% 48%
17% 36,477 45,298
28% 29%
17% 39.06 48.50
48% 149 196
27% 25%
17.8 14.4
4.7 3.6
30D 3M 6M 1Y
-1% 12% -6% 4%
0% 11% 14% 25%
0% 11% 15% 27%
755/ 550
532286/ JINDALSTEL
697
650,865
<= 1 year 1 - 2 yrs 2 - 5 yrs
Expected Returns > 20% p.a.
Expected Returns from 10 to 20% p.a.
Expected Returns from 0 % to 10% p.a.
Expected Returns from 0 % to 10% p.a. with possible
OTHER HIGHLIGHTS
During the quarter the production of Sponge iron stood at 311,474 MT as compared to 320,349 MT in same quarter last
year, registering a decline of 3%. Customized steel production stood at 562,530 MT registering a growth of 24%
sale of sponge iron stood at 28,825 MT as against 86,014 MT down by 66% on
to higher captive consumption. Customized steel products sales registered a growth of 15% to 462,429 MT as compared to
401,248 MT on Y-o-Y basis.
In addition to this, power generation stood at 780 million units registering a growth of 11%
segment declined by 21% Y-o-Y to 180 million units from 227 million units. This decline was due to lower demand in rainy
season.
In H2FY11, it is expected that the pellet plant which has started production will achieve 100% capacity utilization. Also
the two 135 MW power plant which was commissioned recently will start generating power and the effect will be seen in
coming quarters.
We estimate JSPL’s revenues to grow at a CAGR of 18% over FY2010
PAT would grow at a CAGR of 13% over FY2010-12 to Rs 45bn in FY2012 from Rs
Based on a consolidated FY12 P/E multiple of 16
We recommend a ‘HOLD’ rating on the stock.
Financial Analysis and Projections
Particulars (Rs Mn)
Net Revenue
Other Income
Total Income
Operating Expenditure
Depreciation
EBIT
EBIT Margin (%)
Interest
Profit Before Tax
Less: Tax
PAT after MI
PAT Margin (%)
ROE (%)
EPS (Rs)
BVPS (Rs)
Valuation Ratios (x)
P/E
P/B
During the quarter the production of Sponge iron stood at 311,474 MT as compared to 320,349 MT in same quarter last
l production stood at 562,530 MT registering a growth of 24% Y-o-Y. The
sale of sponge iron stood at 28,825 MT as against 86,014 MT down by 66% on Y-o-Y basis. Sponge iron sale was down due
. Customized steel products sales registered a growth of 15% to 462,429 MT as compared to
power generation stood at 780 million units registering a growth of 11% Y-o-Y. Sales of power
to 180 million units from 227 million units. This decline was due to lower demand in rainy
it is expected that the pellet plant which has started production will achieve 100% capacity utilization. Also
ower plant which was commissioned recently will start generating power and the effect will be seen in
18% over FY2010-12 to Rs 155bn by FY2012. We further estimate that
bn in FY2012 from Rs 36bn in FY2010.
olidated FY12 P/E multiple of 16, the fair value for the company works out to Rs 776
Financial Analysis and Projections
FY08A FY09A FY10A FY11E FY12E
54,890 108,510 110,915 130,783 155,109
498 624 603 1,131 1,060
55,387 109,134 111,518 131,914 156,169
32,858 56,816 52,438 69,020 81,857
4,793 9,641 9,970 8,998 11,480
17,737 42,678 49,110 53,896 62,831
32% 39% 44% 41% 41%
2,545 4,567 3,576 7,565 5,523
15,193 38,111 45,535 46,331 57,309
2,681 8,040 9,189 9,100 11,256
12,740 30,457 35,730 36,477 45,298
23% 28% 32% 28% 29%
33% 43% 35% 27% 25%
13.64 32.61 38.26 39.06 48.50
41 75 111 149 196
FY11E FY12E
17.8 14.4
4.7 3.6
October 30, 2010
During the quarter the production of Sponge iron stood at 311,474 MT as compared to 320,349 MT in same quarter last
The
ponge iron sale was down due
. Customized steel products sales registered a growth of 15% to 462,429 MT as compared to
power
to 180 million units from 227 million units. This decline was due to lower demand in rainy
it is expected that the pellet plant which has started production will achieve 100% capacity utilization. Also
ower plant which was commissioned recently will start generating power and the effect will be seen in
bn by FY2012. We further estimate that
the company works out to Rs 776.
Q2FY11 standalone revenue of Rs23bn was marginally higher than market estimate of Rs22.5bn Sponge iron sale was down due to higher captive consumption Due sluggish thermal power demand in the monsoon quarter, JPL shutdown two of its 250 MW units for maintenance for 15 and 17 days.
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