Godawari Power & Ispat Ltd (Q2 FY13)

India Infoline News Service | Mumbai |

Godawari Power & Ispat Ltd (Q2 FY13)

CMP Rs123, Target Rs154, Upside 25.2%

  • 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.

Quarterly operational performance (Standalone)

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
Source: Company, India Infoline Research

  • 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.
Cost Analysis

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)
BSE 193.30 8.15 (4.40%)
NSE 193.00 7.45 (4.02%)

***Note: This is a NSE Chart

 

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