Maintain 'hold' on JSW Steel - TP Rs.664 - Geojit BNP Paribas Financial Services

- Company has reported better than expected results for 1QFY13. Recurring PAT and EBITDA have been better than expected.

- It seems that downside risks to earnings have declined, upside also seems capped at least before 4QFY13.

- Standalone volumes and average sales price have been better than market estimates.

- EBITDA /ton at Rs.8406 grew 18% qoq and was 8% above the estimates.

- Ispat's performance also improved with sales volume up 4% qoq and EBITDA / ton improved 16% qoq.

- Chile mines' EBITDA surprised positively but US pipes/ plates mills profit stayed weak.

- Management stated it had sufficient visibility on achieving 80% capacity utilization until 4QFY13, given its 3.2 million ton of iron ore inventory and 2-2.5 million ton of yet to be auctioned ore.

- It seems that downside risk to the company's FY13 earnings have declined with better visibility on iron ore supplies.

- At the same time, any major upside is also unlikely until iron ore mining ramps up completely, possibly by 4QFY13.

Source : Equity Bulls

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