Godawari Power & Ispat (Q3 FY13)

India Infoline News Service | Mumbai |

Godawari Power & Ispat (GPIL) on a standalone basis reported a 10% qoq decline in its topline to Rs4.4bn on account of a drop in sales and realisations in almost all the steel products

CMP Rs104, Target Rs154, Upside 48.1%

  • Godawari Power & Ispat (GPIL) on a standalone basis reported a 10% qoq decline in its topline to Rs4.4bn on account of a drop in sales and realisations in almost all the steel products. Revenue from power segment jumped 24% qoq to Rs483mn due to increased power generation. Revenue from steel business declined 11.7% qoq to Rs4.3bn due to lower sales of sponge iron and MS rounds. Sponge iron sales declined 33% qoq to 24,825 tons; whereas, MS rounds sales declined 17.8% qoq to 15,631 tons. Production of iron ore jumped 11% qoq to 142,990 tons while production of iron ore pellets increased marginally by 1.6% qoq to 156,320 tons due to better iron ore availability. Ferro-manganese production increased 20% qoq to 2,644 tons. Realisation of all steel products was lower by 3-5% qoq due to subdued demand in the domestic market.

Quarterly operational performance (Standalone)

Q3 FY13  Q3 FY12 % yoy Q2 FY13 % qoq
Production (tons)          
Iron ore 142,990 26,549 438.6 128,459 11.3
Pellets 156,320 150,150 4.1 153,800 1.6
Sponge iron 70,502 76,598 (8.0) 71,179 (1.0)
Billets 50,200 49,470 1.5 46,601 7.7
MS Rounds 17,896 17,034 5.1 21,017 (14.8)
HB wire 20,624 18,545 11.2 25,339 (18.6)
Ferro-alloys 2,644 2,387 10.8 2,202 20.1
Power (mn units) 108 98 10.5 99 8.5
Sales volume (tons)          
Pellets 60,082 76,753 (21.7) 85,223 (29.5)
Sponge iron 24,825 27,886 (11.0) 36,899 (32.7)
Billets 50,278 49,687 1.2 46,602 7.9
MS Rounds 15,631 12,300 27.1 19,027 (17.8)
HB wire 22,242 19,710 12.8 23,760 (6.4)
Ferro-alloys 2,248 766 193.5 2,040 10.2
Power (mn units) 20 15 37.4 17 21.7
Realisation (Rs/ton)          
Pellets 9,133 9,002 1.5 8,701 5.0
Sponge iron 20,628 21,464 (3.9) 21,318 (3.2)
Billets 30,953 32,046 (3.4) 32,170 (3.8)
MS Rounds 34,144 35,267 (3.2) 35,869 (4.8)
HB wire 37,018 37,818 (2.1) 38,956 (5.0)
Ferro-alloys 51,360 50,369 2.0 53,762 (4.5)
Power (Rs/units) 2.6 3.0 (12.7) 2.8 (6.8)
Source: Company, India Infoline Research

  • Operating profit of the company was flat at Rs538mn on a qoq basis, but increased 30% on a yoy basis. The operating profit increased due to lower operating costs. Raw material costs as a % of sales decreased from 71.5% in Q2 FY13 to 68.2% on account of lower coal prices. The increase in captive iron ore production also led to an expansion in operating margins. This impact was offset by a jump in other expenditure. We believe the jump in other expenditure is due to some forex loss on its dollar denominated loan for the quarter. Other expenditure jumped 20.2% yoy and 1.3% qoq to Rs738mn.

Cost Analysis

Q3 FY13  Q3 FY12 % yoy Q2 FY13 % qoq
Material costs 68.2 73.4 (512) 71.5 (324)
Personnel Costs 2.8 2.3 45 2.6 19
Other overheads 16.8
BSE 216.90 11.35 (5.52%)
NSE 217.10 11.55 (5.62%)

***Note: This is a NSE Chart

 

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