Bhushan Steel - In-line performance - Emkay

Reco: REDUCE
CMP: Rs 492
Target Price: Rs 408

- PAT above expectations at Rs 2.0 bn, down 3% YoY and 2% QoQ, primarily due to lower interest costs (down 7%/ 26% YoY/QoQ ) of Rs 2.8 bn owing to forex gains

- EBITDA at Rs 7.5 bn, up 4% YoY but down 13% QoQ was in line with estimates. Margin (29%) flat YoY but fell 101 bps QoQ. EBITDA/ tonne stood at Rs 13,824, down 4% QoQ

- Topline at Rs 25.5 bn, up 4% YoY and down 10% QoQ below our estimates of Rs 27.4 bn, on account of lower volumes at 5.42 lakh tonnes and flat realizations of Rs 47123/ tonne

- We keep our FY14 estimates unchanged and value the stock at 5.5xFY14 EV/EBITDA with target price of 408/share; Downgrade to Reduce on recent run-up in stock price

Source : Equity Bulls

Keywords