Dear All,
Forwarding you the Result Flash on Tata Steel for 4QFY2011 with Buy recommendation.
Tata Steel’s consolidated 4QFY2011 net sales increased 23.0% yoy to Rs33,823cr slightly above our expectation of Rs31,986cr. Adjusted net profit stood at Rs1,896cr above our estimate of Rs1,680cr. We maintain Buy on the stock while we keep our rating Under review.
4QFY2011 Consolidated financial result highlights-
· Consolidated net sales increased 23.0% yoy to `33,823cr, above our expectation of `31,986cr driven by increase in steel prices. Tata Steel standalone net sales increased 7.4% yoy to `8,018cr in 4QFY2011.
· Consolidated EBITDA decreased 6.0% yoy to Rs4,466cr. Tata Steel standalone’s EBITDA decreased 5.8% yoy to `3,067cr in 4QFY2011 mainly on account of increase in prices of key inputs.
· Standalone EBITDA/tonne decreased 15.1% yoy, but increased 3.8% qoq to US$ 402, while Tata Steel Europe’s EBITDA/tonne decreased 9.5% yoy, but increased 240.0% qoq US$ 85.
· Consolidated net profit increased 71.5% yoy to `4,176cr. However, adjusting for exceptional gain on account of disposal of Teesside Cast Products of `2,279cr, adjusted net profit stood at `1,896cr, above our estimate of `1,680cr.
4QFY2011 Consolidated – Actual vs Angel estimates:
| (Rs cr) | Actual | Estimates | Variation (%) |
| Net Sales | 33,823 | 31,986 | 5.7 |
| EBITDA | 4,466 | 4,222 | 5.8 |
| EBITDA margins (%) | 13.2 | 13.2 | 0bp |
| Adj. PAT | 1,896 | 1,680 | 12.9 |
4QFY2011 Consolidated financial performance:
| Y/E March (` Cr) | 4QFY11 | 4QFY10 | yoy % | FY11 | FY10 | yoy % |
| Net Sales | 33,823 | 27,504 | 23.0 | 118,753 | 102,393 | 16.0 |
| - Consumption of Raw Material | 15,935 | 10,525 | 51.4 | 52,579 | 44,752 | 17.5 |
| (% of Net Sales) | 47.1 | 38.3 | 44.3 | 43.7 | | |
| - Power& Fuel | 1,015 | 988 | 2.8 | 4,015 | 4,052 | (0.9) |
| (% of Net Sales) | 3.0 | 3.6 | 3.4 | 4.0 | | |
| - Staff Costs | 4,075 | 3,940 | 3.4 | 15,288 | 16,463 | (7.1) |
| (% of Net Sales) | 12.0 | 14.3 | 12.9 | 16.1 | | |
| Freight & Handling | 1,743 | 1,490 | 17.0 | 6,390 | 5,549 | 15.1 |
| (% of Net Sales) | 5.2 | 5.4 | 5.4 | 5.4 | | |
| - Other expenses | 6,588 | 5,811 | 13.4 | 24,486 | 23,535 | 4.0 |
| (% of Net Sales) | 19.5 | 21.1 | 20.6 | 23.0 | | |
| Total Expenditure | 29,357 | 22,754 | 29.0 | 102,758 |
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