Godawari Power & Ispat Ltd (Q2 FY13)
India Infoline News Service | Mumbai |
Godawari Power & Ispat Ltd (Q2 FY13)
CMP Rs123, Target Rs154, Upside 25.2%
Source: Company, India Infoline Research
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Godawari Power & Ispat (GPIL) on a standalone basis reported an 44.5% yoy jump in its topline to Rs4.9bn on the back of higher production of pellets & billets coupled with strong realizations across all steel products. However, topline was lower by 2% qoq due to seasonal factors and a slide in steel prices qoq. Production of iron ore doubled on a yoy basis to 128,459 tons, but lower by 50.8% qoq. The decline in iron ore ouptut on a qoq basis was due to heavy rains during the quarter. Pellet production too declined qoq by 8.8% qoq due to lower iron ore output. On a yoy basis, except sponge iron, production of all products was higher on a yoy basis. Realisation of all steel products was lower by 5-10% qoq due to subdued demand in the domestic market. However, we are negatively surprised by the quantum of the decline.
| Q2 FY13 | Q2 FY12 | % yoy | Q1 FY13 | % qoq | |
| Production (tons) | |||||
| Iron ore | 128,459 | 63,476 | 102.4 | 261,314 | (50.8) |
| Pellets | 153,800 | 152,700 | 0.7 | 168,700 | (8.8) |
| Sponge iron | 71,179 | 80,759 | (11.9) | 68,486 | 3.9 |
| Billets | 46,601 | 30,714 | 51.7 | 40,150 | 16.1 |
| MS Rounds | 21,017 | 16,058 | 30.9 | 21,017 | - |
| HB wire | 25,339 | 18,620 | 36.1 | 24,738 | 2.4 |
| Ferro-alloys | 2,202 | 1,471 | 49.7 | 1,823 | 20.8 |
| Power (mn units) | 99 | 87 | 13.9 | 88 | 13.6 |
| Sales volume (tons) | |||||
| Pellets | 85,223 | 52,937 | 61.0 | 100,598 | (15.3) |
| Sponge iron | 36,899 | 42,501 | (13.2) | 27,622 | 33.6 |
| Billets | 46,602 | 30,160 | 54.5 | 40,261 | 15.8 |
| MS Rounds | 19,027 | 11,395 | 67.0 | 20,420 | (6.8) |
| HB wire | 23,760 | 16,743 | 41.9 | 25,012 | (5.0) |
| Ferro-alloys | 2,040 | 1,567 | 30.2 | 1,506 | 35.5 |
| Power (mn units) | 17 | 22 | (25.2) | 14 | 21.2 |
| Realisation (Rs/ton) | |||||
| Pellets | 8,701 | 8,146 | 6.8 | 9,624 | (9.6) |
| Sponge iron | 21,318 | 19,873 | 7.3 | 22,681 | (6.0) |
| Billets | 32,170 | 30,389 | 5.9 | 34,396 | (6.5) |
| MS Rounds | 35,869 | 33,484 | 7.1 | 37,894 | (5.3) |
| HB wire | 38,956 | 36,415 | 7.0 | 40,859 | (4.7) |
| Ferro-alloys | 53,762 | 50,498 | 6.5 | 57,135 | (5.9) |
| Power (Rs/units) | 2.8 | 2.9 | (2.8) | 2.6 | 7.3 |
- ² Operating profit for the company was 26.1% higher on a yoy basis, but 30.2% lower on a qoq basis. The decline in operating profit on a qoq basis was due to an increase in coal costs and lower realisations. Raw material costs as a % of sales increased from 69.2% in Q1 FY13 to 71.5%. Other expenditure too increased on a qoq basis.
| Q2 FY13 | Q2 FY12 | % yoy | Q1 FY13 | % qoq | |
| Material costs | 71.5 | 68.8 | 270 | 69.2 | 226 |
| Personnel Costs | 2.6 | 2.9 | (32) | 1.9 | 65 |
| Other overheads | 14.9 | 15.7 | (77) |
***Note: This is a
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