Godawari Power and Ispat Ltd - Operational excellence continues - Emkay

Reco: BUY
CMP: Rs 130
Target Price: Rs 151

- Strong set of nos with PAT rising by 55% YoY and 42% QoQ to Rs 467 mn due to continuous operational improvement; lower (-19% QoQ) interest cost of Rs 295 mn also helped.

- EBITDA rose sharply by 44% YoY and 13% QoQ to Rs 1.1 bn, with margin improving by 339 bps QoQ to 18.2%. Sharp rise (73% QoQ) in pellet sales to 0.1 mt has been the key.

- Topline at Rs 6 bn, was up 22% YoY however down 8% QoQ, as sales volume in sponge iron, billets and ferro alloys remain lower QoQ; realizations stood flat for most products.

- Outperformance continues, giving much needed confidence in mid-cap segment. Reiterate Buy with a target price of Rs 151/ share (valuing at 4.5xFY14 EV/ EBITDA).

Source : Equity Bulls

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