We expect GPIL to benefit from earnings CAGR of 41% over FY10-FY12E on volume growth and margin expansion. This would be driven by higher output from Ari Dongri mines, 0.6mntpa pellet plant, and 20MW biomass power plant that have started giving results from Q3FY11. Further, 0.6 mtpa pellet plant of 75% subsidiary Ardent Steel's has also started to stabilize and is expected to provide additional earnings growth Q4FY11 onwards (not factored in our earnings estimates).

Stabilisation of the newly commissioned 20MW biomass power plant would ensure further power availability for captive use; sale of surplus power to be revenue accretive.

Higher output from Ari Dongri iron ore mine and 0.6mntpa pellet plant to help in revenue growth and margin expansion.

Contribution from sub. Ardent Steel to the consolidated earnings expected from Q4FY11 onward (not included in our earnings and TP estimates).

Boria Tibu mines, impacted by delay in handover of forest area, are now expected to commence mining from Q1FY12.

Our earnings estimates are below consensus estimates mainly because we have not included Ardent Steel in our estimates.

Impediments in ramping up of output from the pellet plant (own as well as in sub. Ardent Steel), 20MW power plant; 2) Continued delay in acquiring forest land in the Boria Tibu mine, and 3) Simultaneous decline in steel prices and power tariff.