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You are here : IndiaNotes >> Research & Analysis >> Companies >> Tata Sponge Iron Ltd. >> Research

Tata Sponge Iron Q3FY17: Firstcall are overweight for medium to long term investment

Firstcall India Equity | 27 Jan, 2017  | Follow Author | Add to my Favourites 
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SYNOPSIS

  • Tata Sponge Iron Limited is engaged in the production of sponge iron by direct reduction method of iron ore and generation of power from waste heat.
  • During Q3 FY17, consolidated net profit jumps to Rs. 109.70 mn from Rs. 52.50 mn in Q3 FY16, an increase of 108.95%.
  • Consolidated revenue for the quarter stood at Rs. 1575.80 mn as against Rs. 1545.90 mn, when compared with the prior year period.
  • During Q3 FY17, consolidated EBIDTA is Rs. 193.60 mn as against Rs. 105.90 mn in Q3 FY16, grew by 82.81%.
  • During the quarter EBIDTA margins are expanded by 544 basis points from previous same period.
  • During Q3 FY17, consolidated PBT increased by 131.56% to Rs. 152.60 mn from Rs. 65.90 mn in Q3 FY16.
  • EPS of the company stood at Rs. 7.12 a share during the quarter, as against Rs. 3.41 per share over previous year period.
  • During 9 months ended of FY17, Net sales and Net profit stood at Rs. 4301.20 mn and Rs. 375.80 mn, respectively.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs.621.50, the stock P/E ratio is at 18.85 x FY17E and 16.09 x FY18E respectively.
  • Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 32.98 and Rs. 38.63 respectively.
  • On the basis of EV/EBITDA, the stock trades at 4.78 x for FY17E and 3.91 x for FY18E.
  • Price to Book Value of the stock is expected to be at 1.12 x and 1.04 x for FY17E and FY18E respectively.
  • Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

 


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Firstcall India Equity of Firstcall India Equity Advisors Pvt. Limited (FIEA), is a leading financial services provider in India and a SEBI Registered Category-I Merchant Banker. FIEA is a culmination of a credible Equity Research Capabilities, Long Standing Relationship with leading FIIs, DFIs, MFs, Overseas Pension Funds etc. The company’s research caters to the needs of the largest news wire and media houses of the world namely Reuters, Thomson, Capital IQ, Themarkets.com, Emerging Markets Euro money Publications-UK. The Company is among the major players in the Debt and Equity markets.


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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.




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