CMP Rs186, Target Rs208, Upside 11.9%
Topline for the quarter increased 2.1% yoy to Rs28.5bn as the impact of lower volumes was offset by higher realisations. The company’s iron ore sales volume declined 1.4% yoy to 6.9mn tons. On a qoq basis, sales volume increased 7.1% qoq as previous quarter production was impacted by Maoist movement. Production declined marginally on a yoy basis to 6.1mn tons, but 13.5% lower on a qoq basis. Blended realisations for the quarter stood at Rs4,143/ton, lower than our estimate. We believe the lower than expected realisation would be largely due to higher sales of iron ore fines.