Volume growth at inflection; maintain Buy: Looking at the progress at Angul and Raigarh, we believe our volume estimates of 1.2mt for 4QFY18 (v/s 970kt in 3Q) and 5.8mt (v/s 3.8mt in FY18) for FY19 appear comfortable. Steel production is at inflection – we expect 29% CAGR to 6.4mt over FY18-20. Strong long product prices in India, operating leverage, and timely volume growth augur well for earnings.Nearly 25% of raw material cost is insulated from input price risk due to captive iron ore mines and coal linkage. We remain positive on the stock – Buy with a target price of INR 361 (Exhibit 6).
Link to the PDF
About Motilal Oswal
Motilal Oswal was founded in 1987 as a small sub-broking unit, with just two people running the show. Today it has a 2000 member team with a networth of Rs7 bn and market capitalization as of March 31, 2008 at Rs19 bn.
For more information please write in to email@example.com
Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.