SAIL Q1 PAT may fall 44% at Rs 387 cr: Kotak Securities
Kotak Securities expects SAIL to report a 13.3 percent degrowth quarter-on-quarter (fall of 44.4 percent year-on-year) in net profit at Rs 387.1 crore.
August 13, 2013 / 17:45 IST
Kotak Securities has come out with its first quarter (April-June) earnings estimates for the metal sector. The brokerage house expects SAIL to report a 13.3 percent degrowth quarter-on-quarter (fall of 44.4 percent year-on-year) in net profit at Rs 387.1 crore.
Revenues are expected to decrease by 16.8 percent Q-o-Q (down 4.8 percent Y-o-Y) to Rs 10,255.5 crore, according to Kotak Securities.EBITDA margin or operating profit margin is likely to be at 10.1 percent in June quarter as against 7.5 percent in March quarter and 14.1 percent in a year ago period.Kotak Securities report on SAILWe expect net sales to decline 4.8 percent Y-o-Y and 6.8 percent Q-o-Q to Rs 102.5 billion. Sales volume is expected to rise 6 percent Y-o-Y (fall 17.2 percent Q-o-Q) to 2.65mt. We expect steel price realisations to fall 10.2 percent Y-o-Y but gain marginal 0.4 percent Q-o-Q to Rs 38700/tonne.We expect EBITDA/tonne to recover 36 percent Q-o-Q to Rs 3926/tonne i.e. slightly above USD 70/tonne on decade low base of the previous quarter, when performance was affected by several one-offs. EBITDA is expected to improve 12.6 percent Q-o-Q to Rs 10.4 billion while EBITDA margins are expected to improve by 265bps Q-o-Q. EPS is likely to fall 13.3 percent Q-oQ and 44.4 percent Y-o-Y to Rs 0.94.Raw material cost is expected to be lower on account of lower coking coal cost. Employee costs should fall and depreciation cost should rise as last quarter oneoff would not be repeated. Other income would see a decline while net interest charges would rise as funds are utilized for capex.Foreign currency denominated loan accounts for 60 percent of the total term loans of Rs 220 billion. However, management has stated that these loans are fully hedged. So, it should not have any significant forex loss Impact on the company.SAIL imports 75 percent of its coking coal requirement but does limited steel exports. So, rupee depreciation negatively impacts SAIL's financials. Management has stated that every Re 1 decline would increase costs by Rs 1.3 billion.Please note that management has indicated that the significant one-time benefit of revised rail prices w.e.f 2008 is likely to flow into P&L in next quarter. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
