GMDC - 3QFY2013 Result Review - Nirmal Bang

Gujarat Mineral Development Corporation (GMDC) reported subdued performance for 3QFY13, with EBITDA being 20%/21% below and PAT 18%/15% below our/street estimates, respectively.

Lower lignite volume due to removal of lower overburden on account of machinery constraints at Bhavnagar mine and lower PLF (plant load factor) at Arkimota plant and wind power plant are primary reasons for the dismal results.

We have cut our TP to Rs251 (5% below our earlier TP of Rs265) by lowering the multiple from 6.0x FY14 EV/EBITDA to 5.7x FY14 EV/EBITDA in order to factor the fall in FY13 estimates.

Source : Equity Bulls

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