tata steel ltd - q1fy12 result update
TRANSCRIPT
-
8/4/2019 TATA Steel Ltd - Q1FY12 Result Update
1/4
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: [email protected]
NG TERM INVESTMENT CALL
BUY22 August 2011
Company Report | Q1FY12 Result Update
Results Highlights
TATA Steel Ltd (TATA) reported its first quarter consolidated results for
FY12 and has registered a net sales growth of 21.6% YoY to INR 328,399
mn which was ~9% above our estimates. Consolidated sales volume at 6.1
mn tonnes in Q1FY12 were 3.1% higher than the deliveries of 5.9 mn
tonnes recorded in Q1 FY11.
The jump in the top line was due to the higher sales volume at the Indian
operation (1.59 mn tonne, 14% YoY growth) along with improved average
realisation compared to the spot market. Revenue in Q1FY12 at INR 78,600
mn was 20% higher on YoY.The average realisation for the quarter has
improved by 5.6% YoY. EBITDA at the Indian operation has increased by
6.7% on YoY with an EBITDA/ ton of USD 440. There is an one off gain of
INR 5,110 mn from the stake sales in TATA Refractories Ltd, at its Indian
operation.
European operation with a turnover of INR 205,350 mn was 20.5% higher
on YoY, on the back of higher realisation. The increase in the average
realisation (23% on YoY) was partly off set by the lower volume. European
operation at 3.5 mt has declined by 2.2% on YoY. High raw material cost
has resulted in EBITDA decline of 10% on YoY at INR 12,220 mn with an
EBITDA/ton of USD 78. However the company has registered a one off
gain of INR 6,850 mn on the arbitration settlement of the TCP.
Companys South East Asian operation almost remained flat during the
quarter under review. Sales volume at NatSteel Holding is at 0.46 mn
tonnes remained flat compared to deliveries in Q1 FY11. While Turnover
in Q1 FY12 at INR 22,150 mn was up 27.1% YoY. EBITDA during the
quarter has declined by 66% to INR 320 mn due to higher electricity cost
and decline in the scrap/rebar price spread. However TATA Steel Thailand
has posted sales volume growth of 7.6% on YoY while the turnover at INR
11,160 mn was up 28.0% on YoY. EBITDA in Q1FY12 at INR 570 mn was
almost flat compared to INR 560 mn in Q1FY11.
Consolidated net profit during the quarter has shown a growth of 192% on
YoY to INR 53,466 mn. The robust jump in the PAT was all due to the extra
ordinary income during the quarter. This includes stake sales in the TATA
Refractories (INR 5,760), stake sales in Riversdale Mining (INR 49,420mn)and arbitration settlement at TCP (INR 5,980 mn).
Industry Steel
CMP (INR) 459Target (INR) 690
Upside / Downside (%) 50
52 week High/Low (INR) 714/459
Market Cap (INR Mn) 440,471
3M Avg. Daily Volumes 4049,070
EV/EBITDA(FY13e) 4.8
Shareholding Pattern (%)
Stock Performance
450
500
550
600
650
700
750
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
TATA Steel Nifty
Performance (%)1 Month 3 Months 1 Year
TATA -20.2 -18.4 -12.1
NIFTY -13.0 -10.7 -12.5* Source: Bloomberg, Unicon Research (INR Mn)
Particulars Actual Estimates
Total Income 330,002 301,450
EBIDTA 44,229 46,785
Reported PAT *53,466 17,350*Include One Off Gain
-
8/4/2019 TATA Steel Ltd - Q1FY12 Result Update
2/4
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: [email protected]
Out Look & Valuation
TATA Steel is continuously focusing on restructuring its business model
with divesting its under performing assets. This would generate smooth
cash flow for the the existing expansion plan and upcoming opportunity.
FY12 capex is expected to be USD 1.8 bn in Indian operations and another
USD 0.6 bn in European operation.
The management has given a guidance for 9-9.2 mn tonne of steel for FY13.Companys brown field expansion at Jamshedpur is likely to be
commissioned by March 2012 and expected to be commercialised by the
Q2FY13. In addition to this the Mozambique coal project is expected to start
by end of FY12 and expect 0.7 mt despatch in FY13, and gradually would
rise to 1.5 mt. New Millennium iron ore is expected to be operational during
2014 with production over 1 mt in the first year.
The company is passing through a phase of consolidation. There are
uncertainty regarding the revival of the global economy but the companyexpects to perform well on the back of stable demand from the domestic
market.
At CMP the stock is available at EV/EBITDA of 4.8x its FY13e and PE
multiple of 6x of its FY13e earnings. Considering the expansion plan and the
demand scenario, we believe that the company has potential for improved
performance. We recommend BUY on the stock and maintain our price
target of INR 690.
-
8/4/2019 TATA Steel Ltd - Q1FY12 Result Update
3/4
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: [email protected]
Financials (INR in mn)
DESCRIPTION Q1FY12 Q1FY11 Y0Y Q4FY11 QoQ
Net Sales 328,399 270,101 21.6% 334,427 -1.8%
Other operating income 1,603 1,836 -12.7% 3,800 -57.8%
Total Operating Income 330,002 271,937 21.4% 338,227 -2.4%
Total Expenditure 285,773 227,609 25.6% 293,566 -2.7%
EBITDA 44,229 44328 -0.2% 44,661 -1.0%
EBITDA (%) 13% 16% -290bps 13% 20bps
Depreciation 11,508 10,439 10.2% 11,664 -1.3%
EBIT 32,721 33,888 -3.4% 32,997 -0.8%Other Income 38,823 593 6445.7% 2,116 1734.9%
Interest 7,377 5,976 23.4% 7,655 -3.6%
Exceptional Items 0 -599 -100.0% 22,794 -100.0%
PBT 64,167 27,907 129.9% 50,252 27.7%
Tax 11,230 10,005 12.2% 8,764 28.1%
Profit After Tax 52,937 17,902 195.7% 41,487 27.6%
Minority Interest 248 -65 -482.3% 185 34.2%
Shares of Associates 281 416 -32.5% 84 235.0%
Consolidated Net Profit 53,466 18,253 192.9% 41,756 28.0%
Net Profit (%) 14.5% 6.7% 780bps 12.3% 223bps
EPS 52 20 164.8% 44 19.0%
Source: Company, Unicon Research, *Consolidated Financial
-
8/4/2019 TATA Steel Ltd - Q1FY12 Result Update
4/4
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: [email protected]
Unicon Investment Ranking MethodologyRating Buy Accumulate Hold Reduce Sell
Return Range >= 20% 10% to 20% -10% to 10% -10% to -20%