Aditya Birla Money neutral on Usha Martin

5869 Investors following Usha Martin. Share this News with them.

0

Like this story, share it with millions of investors on M3

Aditya Birla Money neutral on Usha Martin

Aditya Birla Money has maintained neutral rating on Usha Martin with a target of Rs 41, in its August 12, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy DCB; target of Rs 68: Nirmal Bang Buy Union Bank; target of Rs 350: Sushil Finance Buy Indian Oil Corporation: Motilal Oswal ALSO READ See previous views by Aditya Birla Money See what other Experts & Brokerages are saying about Usha Martin See messages about Usha Martin Usha Martin BSE | NSE 31/05/12 Are Mutual Funds betting on Usha Martin?

Aditya Birla Money has maintained neutral rating on Usha Martin with a target of Rs 41, in its August 12, 2011 research report.

"Usha Martin (UML) standalone net sales increased 10.6% YoY and declined 16.2% QoQ to Rs 6.1bn. The QoQ decline was due to a fall in steel production on account of a fire. UML's standalone EBITDA was down 15.7% YoY and 12.5% QoQ to Rs 1.1bn. This was on account of lower topline and lower captive coal output. EBITDA margins were up 78bps QoQ to 18.5% on account of higher-than-expected steel realizations. UML's standalone adjusted net profit was down 80.6% YoY and 76.9% QoQ to Rs 76.4mn on account of lower EBITDA and higher interest costs. Consolidated adjusted net profit was down 49.4% YoY and 29% QoQ to Rs 256.7mn on account of poor standalone performance. Results of international operations were better-than-expected. Billet production was down 16% QoQ to 115,214 tonnes"

"Cut FY12E EPS and introduce FY13 estimates: Factoring in lower-thanexpected production performance and improved performance of international performance, we cut our consolidated EPS estimates of FY12E and FY13E by 13.4% and 7.2% to Rs 5.1 and Rs 6.8 respectively. (Refer Table-1 on page-2 for production assumptions)"

"UML is currently trading at a consolidated P/E and EV/EBITDA of 7.4x and 5.0x FY12E respectively. UML is still grappling with ramping up its capacities due to some issue or the other. Performance continues to be well short of management guidance. With the auto sector and overall domestic economic growth showing signs of slowing down and the increased global uncertainties, volumes may not turn out as per management expectations and pricing could see some weakness. On account of continuing execution issues, we now value UML at a consolidated P/E of 8x FY12E (earlier 9x FY12E) to arrive at a fair value of Rs 35.6 per share. We cut our target price per share for UML by 22.5% from Rs 52.9 to Rs 41, implying a potential return of 8.6% from the last closing price. We maintain our Neutral rating on UML," says Aditya Birla Money research report.

Public holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment