Godawari Power and Ispat

Godawari Power Buy Call by Emkay Global; Prabhudas Lilladher Bets on Divis Labs

Godawari Power Buy Call by Emkay Global; Prabhudas Lilladher Bets on Divis LabsEmkay Global Financial Services has given target price of Rs 143 for Godavari Power and Ispat. The analyst house has given bullish outlook for the power and metals sector company based on good growth during the previous quarter.

The business has improved and 102% higher iron ore mining compared to same period of previous year. Emkay Global has given buy call for the stock.

Buy Godawari Power And Ispat Ltd With Target Of Rs 270

GODAWARI POWER AND ISPAT LTD.Operational benefits led by pellets; Valuation attractive In Q4FY11, Godawari Power's (GPIL) standalone revenue grew 40% YoY to Rs3.3bn despite subdued power performance, mainly on up 40% YoY steel sales growth, led by higher iron ore and pellet output. EBITDA grew 56% YoY to Rs724mn; OPM expanded 230bps to 22%. PAT grew 37% YoY to Rs310mn despite higher interest cost and effective tax rate.

Buy Godwari Power With Target Of Rs 272

GODAWARI POWERWe 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.

Buy Godwari Power And Ispat Ltd. With Target Of Rs 272

GODAWARI POWER AND ISPAT LTDIn Q3FY11, Godawari's (GPIL) revenue grew 10% YoY to Rs2.2bn due to improved realisation (up 22% YoY) and higher sales volume, mainly pellets. EBITDA at Rs513mn grew by meager 3% YoY as OPM contracted by 160bps due to lower power tariff. However, PAT declined by 35% YoY to Rs210mn on higher interest and tax outgo.

Backward integration benefits: Captive iron ore output from Ari Dongari at 111kt declined 15% YoY due to extended monsoon. However, captive consumption of ~85kt of pellets (103kt output less
18kt merchant sales) aided in meeting shortfall & expanding margin.

Expansion plans help Godawari power and Ispat to rise

On the second consecutive day of positive sentiments in the Indian share market, Godawari power and Ispat performed really well. The shares rallied up by 6.19% at 9:52 IST to trade at Rs. 213.50.

The rise in the share price came after the company’s announcement to set up a 50 megawatt solar thermal power project. The unit will cost up to Rs. 700 crore for the company and is expected to reap great benefits for the company.

The announcement came in after the market hours on Wednesday and the rise was expected on Thursday. The BSE Sensex in early hours of its trade was up by 106.77 points which 0.53% at levels of 20, 362.80.

The intraday high so far hit by the stock was at Rs 214.90 with an intraday low registered at Rs 202.

Buy Godawari Power With Traget Of Rs 276

Buy Godawari Power With Traget Of Rs 276PINC Research has maintained buy rating on Godawari Power & Ispat Ltd (GPIL) with a price target of Rs 276 in its report dated Dec 15, 2010.

As per estimations, GPIL would record earnings CAGR of 50% over FY10-12 on volume growth and margin expansion, driven by the recently-commissioned Ari Dongri mine, 0.6mtpa pellet plant, and 20MW biomass power plant. The 0.6mtpa pellet plant of Ardent Steel (75%-owned subsidiary) is expected to provide additional earnings growth, but this is not factored into our estimates.

What will move the stock?

Buy Godawari Power With Target Of Rs 276: PINC Research

Buy Godawari Power With Target Of Rs 276: PINC ResearchWe visited Godawari's (GPIL) Raipur plant to conduct a ground check on operations of 0.6mn tpa pellet plant and 20MW biomass-based power plant. We also visited plant of Hira Ferro alloys, which is to become GPIL's 51% subsidiary post completion of proposed amalgamation of group companies - RR Ispat and Hira Industries.

Buy Godawari Power with target of Rs 276

Godawari PowerWe expect GPIL to benefit from earnings CAGR of 50% over FY10-FY12 on volume growth and margin expansion driven by the recently commissioned Ari Dongri mine, 0.6mntpa pellet plant, and 20MW biomass power plant.

The 0.6mntpa pellet plant of 75% subsidiary Ardent Steel to provide additional earnings growth (not factored in our estimates).

At CMP of Rs175, the stock is attractively valued at 3.3x FY12E EV/EBITDA. We recommend 'BUY' with a target price of Rs276 (4.5x FY12E EV/EBITDA).

Buy Call For Godawari Power with target price of Rs 276: PINC Research

Buy Call For Godawari Power with target price of Rs 276: PINC ResearchWe expect GPIL to benefit from earnings CAGR of 50% over FY10-FY12 on volume growth and margin expansion driven by the recently commissioned Ari Dongri mine, 0.6mntpa pellet plant, and 20MW biomass power plant. We expect the 0.6mntpa pellet plant of 75% subsidiary Ardent Steel to provide additional earnings growth (not factored in our estimates).

What will move the stock?

PINC Result Review – Godawari Power and Ispat Ltd.

Godawari PowerGodawari PowerIn Q2FY11, Godawari's (GPIL) revenue declined 7% YoY to Rs1.4bn mainly due to low power sales and tariff. Operating profit grew 65% YoY to Rs287mn despite lower power profit as captive iron ore and better realization boosted steel profitability. OPM expanded by 870bps YoY to 20.1%. PAT grew 185% YoY to Rs71mn.

Project updates: 20MW biomass power plant started trial production; 0.6mntpa pellet plant in GPIL's 75% subsidiary Ardent Steel under stabilisation. See pg3 for status on amalgamation of group companies.




Check out More news from Telecom Sector :: Pharmaceutical Sector :: Auto Sector :: Infrastructure :: Real Estate


Syndicate content