GEPL Capital neutral on Bhushan Steel

7474 Investors following Bhushan. Share this News with them.

0

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

GEPL Capital neutral on Bhushan Steel

GEPL Capital has maintained neutral rating on Bhushan Steel, in its February 3, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Accumulate Gateway Distriparks; tgt of Rs 163: PLilladher Accumulate Global Offshore; target of Rs 90: PLilladher Accumulate Cairn India; target of Rs 376: FIFL ALSO READ See previous views by GEPL Capital See what other Experts & Brokerages are saying about Bhushan See messages about Bhushan Bhushan BSE | NSE 29/05/12 Are Mutual Funds betting on Bhushan?

GEPL Capital has maintained neutral rating on Bhushan Steel , in its February 3, 2012 research report.

"Net sales of Bhushan Steel Ltd (BSL) for Q3FY12, grew by 23.9% Y-o-Y to Rs24,071 mn driven by improvement in realisation with increase in volumes of flat steel products.  EBIDTA Margin for the Q3FY12 grew by 241bps to 30.1% in Q3FY12 on Y-o-Y basis, driven by strong realisation, in house sourcing of Hot Rolled (HR) steel coupled with softening of raw material prices. Net profit for Q3FY12 stood at Rs2,767 mn, showing a de- growth of 1.3% Y-o-Y. However on Q-o-Q basis net profit grew by 33.8%, mainly driven by a sharp fall in expense pertaining to interest & exceptional item, which fell by 24% on Q-o-Q basis."

"Total Flat steel production grew by 16.1% in Q3FY12 on Y-o-Y basis. This was driven by a sharp increase in production of HR on account of stabilization of the plant. HR production for Q3FY12 grew by 34.1% Y-o-Y and 16.7% Q-o-Q. With further stabilization of HR steel plant we expect the contribution form HR to improve from current levels. Net sales volume for flat products grew by 17% Y-o-Y, however volumes for long products on Yo- Y basis de-grew by 17% in Q3FY11. As a result the overall net sales volume showed a moderate growth of 9.7% Y-o-Y. Blended net realisation for Q3FY12 grew by 13.2% on Y-o-Y basis and 5.3% on Q-o-Q basis, aided by sharp increase in realisation of both long and flat products, which grew by 27.9% and 8.9% on Y-o-Y basis respectively."

"We maintain our target of Rs377 based on DCF. However, considering the strong run up in the stock over the last 1 month we believe the upside is limited and hence changed our rating on the stock to NEUTRAL from the previous BUY rating a month back. The overall performance of Bhushan Steel has been in line with expectation. Owing to its recent backward integration of making HR and further stabilization of the same had helped company improve its EBIDTA margins in Q3FY12. Highly stretched balance sheet with large debt remains to be a concern, however with recent announcement of company to raise equity capital of 7,000 mn by rights issue comes as a positive for the stock," says GEPL Capital research report. 

Public holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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