View on JSW Steel 3QFY2014 results - Angel Broking

Views of Mr. Bhavesh Chauhan (Sr. Research Analyst – Metals & Mining, Angel Broking) on JSW Steel 3QFY2014 result:

JSW Steel's standalone net profit slightly above our estimates

"JSW Steel's (JSW) standalone 3QFY2014 top-line and bottom-line were ahead of our estimates. 3QFY2014 results are not comparable with 3QFY2013 as its 3QFY2013 results do not include the impact of JSW Ispat which had merged with JSW during 4QFY2013. JSW's standalone volumes stood at 3.19mn tonnes which was in line with our estimate. Standalone net sales stood at Rs. 11,731cr, above our estimate of Rs. 11,358cr. EBITDA stood at Rs. 2,303cr, representing an EBITDA margin of 19.6% in line with our estimate of 19.6%. Net profit stood at Rs. 652cr (slightly better than our estimate of Rs. 618cr). The company expects its FY2014 sales volumes to exceed its previous guidance of 11.55mn tonnes. With slower than expected ramp up of iron ore mining in Karnataka, we believe increasing steel production meaningfully during FY2015 would remain a challenge. Moreover, given expensive valuation (5.0x FY2015 EV/EBITDA), We recommend Neutral rating on the stock."

JSW Steel 3QFY2014 Result Review (CMP: Rs. 915/ Target Price: NA/ Recommendation: Neutral)

Source : Equity Bulls

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