Godawari Power & Ispat - Rating: Buy; Target Price: Rs150 - Centrum

- We expect revenue to jump by ~20% YoY on the back of higher pellet sales and marginally better steel realizations sequentially. Pellet production is expected to be higher QoQ by 32% at ~3.4 lakh tonnes on the back of stabilization of new 1.2 mtpa pellet making facility. We expect merchant pellet sales volumes of ~1.7 lakh tonne.

- EBITDA is expected to be higher by ~62% YoY at Rs1.1bn driven by higher margin pellet business. We expect EBITDA margin of 15.7%.

- PAT is expected to be higher by 80% YoY at Rs367mn. Higher interest and depreciation costs are expected due to capitalization of solar thermal and new pellet plant projects.

Source : Equity Bulls

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