Sesa Goa's PAT likely to grow 17% at Rs 986 cr in Q1
Sesa Goa, India's largest producer and exporter of iron ore in the private sector, is set to announce its results for the quarter ended June 2012. Analysts on an average expect profit after tax to increase by 17% year-on-year to Rs 986 crore in the first quarter of FY13, but that is likely to fall by 15% quarter-on-quarter.
July 24, 2012 / 12:18 IST
Sesa Goa, India's largest producer and exporter of iron ore in the private sector, is set to announce its results for the quarter ended June 2012. Analysts on an average expect profit after tax to increase by 17% year-on-year to Rs 986 crore in the first quarter of FY13, but that is likely to fall by 15% quarter-on-quarter.
Net sales are seen going down by 15% YoY and 36% QoQ to Rs 1,790 crore during the same quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to decline by 40% YoY and 31.6% QoQ to Rs 680 crore in the quarter ended June 2012.EBITDA margin is seen falling sharply at 38% in the June quarter as against 54% in a year ago period, but it is likely to improve by 244 basis points quarter-on-quarter. PAT is likely to be much higher as it will be impacted by Cairn India PAT, which was boasted by Forex gains. Sesa Goa holds 20% of the share capital of Cairn India. So it is likely to account for 20% of Cairn India’s PAT during the quarter ended June 2012. Cairn’s profit after tax rose by 40% YoY to Rs 3,826 crore due to forex gains of Rs 866.3 crore. That will be boosted Sesa Goa's PAT by Rs 765 crore as against street expectations approximately Rs 620 crore. Hence, PAT on a YoY basis is not comparable.Analysts feel the topline will be lower due to a 30% YoY drop in iron ore volumes, which should stand at 3.1mt in Q1FY13 as against 4.3mt in a year ago peroid. This was due to restrictions on iron ore movement of ore in Goa (entire output is dependent only on Goa), ban on mining in cateogary B as classified by CEC in Karnataka. Lower volumes will marginally offset by a 20% improvement in realization due to rupee depreciation. Iron ore sales volumes will face further pressure due to exhaustion of inventory at Karnataka mines.On sequential basis: Volumes will report a 40% drop in volume due to seasonality and logistic constraints (transporters strike in South Goa) Concerns going ahead:Slowdown in China and increasing supply due to commissioning of new iron ore projects - Iron prices may correct further in FY13.Restart of its mines (Category B) in second half of FY13 in Karnataka will also be critical 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!
