Analyst Research Report Snapshot

Title:

Jindal Steel & Power (JSP) - Qtr. Update - Dated - April 30, 2014

Price:

$35.00

Provider:

Axis Capital Limited

Date:

02 May 2014

Pages:

4

Type:

AcrobatPDF

Companies referenced:

JNSP.NS

Available for Immediate Download
Summary:

Jindal Steel and Power’s (Bloomberg: JSP IN) Q4 adj. PAT at Rs 3.8 bn was below our estimate of Rs 5.1 bn, mainly due to higher than expected losses at international mining operations.  The company indicated its key priority in FY15 is to reduce international losses and ramp up production at recently commissioned steel and power plants  For Tamnar-II (4 X 600MW), JSPL has commissioned 3 units, but actual supply restricted to ~400 MW due to grid constraints The stock is Under Review due to uncertainty on merchant power sales from captive mines and pending outcome of Shah Commission report on iron ore mines. Q4 highlights  Jindal Power (1 GW): Realization for the quarter was Rs 3.15/kWh (down 1% YoY, but up 2% QoQ). The cost of generation in Q4 has gone up significantly to Rs 1.56/kWh (+17% YoY) likely due to diesel price hike for mining  Steel: Volumes were 765 kt (down 16% YoY) led by expansion-related shutdown taken during the quarter. The company commissioned (a) Angul plant, (b) 2 mnt Oman steel plant, and (c) 4.5 mnt pellet plant. We expect a gradual ramp up in these capacities which should improve volumes in FY15 and FY16. Our steel volumes are 3.4 mnt in FY15 and 3.8 mnt in FY16 Change in estimates: We have cut FY15E EPS estimate by 6% to factor in earlier commissioning and consequent impact of under-utilization of Tamnar-II project. Our revised FY15/FY16 EPS estimates are Rs 25.5/ Rs 35.2. Regards, Bhavin Vithlani (Executive Director – Power & Cap Goods) Institutional Equity Research Axis Capital Ltd Tel.: + 91 22 4325 1144 Jagdishwar Toppo (Executive Director – Materials) Institutional Equity Research Axis Capital Ltd Tel: +91 22 4325 1103 Nitesh Jain (Sr VP – Materials) Institutional Equity Research Axis Capital Ltd Tel: +91 22 4325 1145 Anup Kulkarni (AVP – Power) Institutional Equity Research Axis Capital Ltd Tel.: + 91 22 4325 1120

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