Bhushan Steel Q1 PAT seen up 43% at Rs 300 cr

Bhushan Steel's profit after tax is likely to grow by 43.1% year-on-year to Rs 300.35 crore in the first quarter of FY13 while quarter-on-quarter the same is expected to fall by 9.2%.

Net sales are seen going up by 25% YoY and 1.9% QoQ to Rs 2,794.8 crore during the same period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to go up by 31% YoY and 7.3% QoQ to Rs 862.9 crore in the first quarter of FY13.

EBITDA margin is seen declining 130 basis points YoY and 160 basis points QoQ to 30.9% in the quarter.

Analysts expect volumes to remain robust, rising around 20% to 5,89,000 tonnes. The company will benefit from marginal increase in realizations and decline in coking costs.

Majority exposure (about 90%) is to auto/auto ancillary industry (flat products) and key clients are M&M, Tata Motors etc. Hence, stand seems unperturbed by the slowing construction (longs) business in India.

EBITDA per tonne is likely to be strong at Rs 14.7k/t, up from INR 13.5k/t in Q1FY12, but EBITDA/tonne may decline on QoQ basis primarily due to lower utilization and hence higher fixed costs per tonne.

Investors should watch out for the progress in Orissa phase III expansion and any guidance on iron ore availability in Orissa.