Godawari Power & Ispat - Moilal Oswal

Godawari Power and Ispat's (GODPI) adjusted standalone PAT for 3QFY12 declined 25% QoQ to INR74m (v/s our estimate of INR249m), as local issues and extended monsoons impacted iron ore production. Consolidated PAT was flat QoQ at INR106m. The company will be providing marked-to-market (MTM) loss of INR229m on forex loans at the year-end.

The company's pellet plants continue to operate at 100% capacity utilization. Pellet prices are strong at INR9,000/ton due to shortage of DRI grade iron ore.

Billet realization increased 5% QoQ to INR32,406/ton while pellet realization improved 10% QoQ to INR9,002/ton.

We are cutting our EPS estimate for FY13 by 9% to INR42.7 to factor in frequent production disruption at captive iron ore mines due to local issues.

The stock is trading at 2.4x FY13E EPS and 0.5x FY13E BV, and at an EV of 3.3x FY13E EBITDA. Maintain Buy.

Source : Equity Bulls

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