Result Update

May 19, 2016

Rating matrix

JSW Steel (JINVIJ)

Rating
Target

:
:

Hold
| 1250

Target Period
Potential Upside

:
:

12 months
-6%

Performs well

Whats Changed?
Target
EPS FY17E
EPS FY18E
Rating

Changed from | 900 to | 1250

Changed from | 63.8 to | 95.0
Introduced at | 132.3
Changed from Sell to Hold

Quarterly Performance (Consolidated)

Q4FY16 Q4FY15
Revenue
10,697.5 12,599.7
EBITDA
1,824.6 1,682.5
EBITDA (%)
17.1
13.4
PAT
171.3
62.4

YoY (%)
-15.1
8.4
370 bps
LP

Q3FY16 QoQ (%)

8,698.3
23.0
891.8
104.6
10.3 680 bps
-923.4
LP

FY15
52971.5
9402.3
1843.7
76.3

FY16
41878.9
6073.0
1383.5
57.2

FY17E
56812.7
9862.1
2295.9
95.0

FY18E
62297.6
10968.9
3198.3
132.3

FY16
NA
NA
11.5
1.5
6.4
4.8

FY17E
14.1
13.2
6.7
1.3
9.4
10.6

FY18E
10.1
9.5
6.2
1.2
11.8
11.5

Valuation summary
PE (x)
Target PE (x)
EV/EBITDA (x)
P/BV (x)
Adj RoNW (%)
Adj RoCE (%)

FY15
17.5
16.4
6.9
1.4
8.0
10.3

Stock data
Particular
Market Capitalisation
Debt-Cons. (FY16P)
Cash Cons. (FY16P)
EV
52 week H/L
Equity capital
Face value

Amount
| 32267 crore
| 38461 crore
| 1913 crore
| 69994 crore
| 1380 / 800
| 241.72 crore
| 10

Price performance (%)

Return %
JSW Steel
SAIL
Tata Steel

Key Financials
(| Crore)
Total Op. Income
EBITDA
Adj Net Profit
Adj EPS (|)

1M
11.5
10.6
16.2

3M
25.3
9.8
36.7

6M
50.1
-13.5
40.6

| 1335

12M
44.8
-36.5
-6.4

Research Analyst
Dewang Sanghavi
dewang.sanghavi@icicisecurities.com

ICICI Securities Ltd | Retail Equity Research

JSW Steel reported Q4FY16 numbers that were better than our
estimates. While topline broadly came in line with our estimates,
EBITDA, EBITDA margin, EBITDA/tonne and PAT came in higher
than our estimates.
Consolidated topline for the quarter came in at | 10697.5 crore
(down 15.1% YoY, up 23.0% QoQ and higher than our estimate of
| 10559 crore). Steel volumes came in at 3.3 million tonnes (MT),
marginally higher than our estimate of 3.2 MT.
Consolidated EBITDA came in at | 1824.6 crore (up 8.4% YoY,
104.6% QoQ and higher than our estimate of | 1417.9 crore).
Consolidated EBITDA margin for the quarter was at 17.1%, higher
than our estimate of 13.4%. EBITDA/tonne was at | 5404/tonne,
significantly higher than our estimate of | 4500/tonne.
The subsequent PAT came in at | 171.3 crore, higher than our
estimate of | 31.8 crore.

Sales volume guidance of 15 MT for FY17E, implying a growth of 24%...

For FY17E, JSW Steel has guided crude steel production and saleable
steel sales guidance of 15.75 MT and 15 MT respectively. The sales
volume guidance looks optimistic considering moderate demand growth,
threat of imports and capacity expansion by peer group companies such
as Tata Steel, SAIL, etc. We have modelled sales volume of 14 MT for
FY17E and 15 MT for FY18E. For FY16 JSW steel saleable steel sales
volume stood at 12.1 MT.
Elevated debt level remains area of concern
Post the merger with Ispat Industries, the debt level of JSW Steel has
increased significantly. On a consolidated basis, at the end of Q4FY16, the
net gearing was at 1.78x while net debt to EBITDA was at 6.33x. On a
standalone basis, at the end of Q4FY16, net gearing was at 1.41x while
net debt to EBITDA was at 5.35x.
EBITDA/tonne surprises positively; upgrade to HOLD
JSW Steel reported better than expected EBITDA/tonne for Q4FY16
driven by improved product mix and cost optimization. For Q4FY16 value
added products constituted ~36% of total sales volume. For FY17E we
have modelled EBITDA/tonne of |6750/tonne, while for FY18E we have
modelled EBITDA/tonne of |7000/tonne. We value the stock at 6x FY18E
EV/EBITDA and arrive at a target price of |1250. We have a HOLD
recommendation on the stock.

Variance analysis
Revenue
Other Income
Employee Expense
Raw Material Expense
Power & Fuel Expense
Other operating Expenses
EBITDA
EBITDA Margin (%)
Depreciation
Interest
Exceptional Item
PBT
Tax Outgo
PAT
Minority Interest, Share of Associate
&Extra Ordinary Item
PAT for the Group
Key Metrics
Steel Sales (MT)
Standalone EBITDA/tonne (|/tonne)

Q4FY16 Q4FY16E Q4FY15

10,697.5 10,559.0 12,599.7
80.8
80.0
18.3
363.9
377.8
380.4
5,597.0 5,526.6 7,304.7
862.4 1,042.0 1,067.4
2,049.6 2,194.7 2,164.7

YoY (%)
-15.1
341.4
-4.4
-23.4
-19.2
-5.3

Q3FY16 QoQ (%)

8,698.3
23.0
22.6
257.4
368.2
-1.2
4,903.5
14.1
671.6
28.4
1,863.2
10.0

8.4
891.8
370 bps
10.3
-11.6
773.4
-2.8
810.7
-95.6 2,122.1
-441.1 -2,791.8
-213.1 -1,810.0
382.3
-981.8

104.6
680 bps
2.6
2.8
NA
LP
-107.0
LP

Comments
Topline came in broadly in line with our estimate
Other income broadly came in line with our estimate
Employee expense came in lower than our estimate
Piwer and fuel expense came in lower than our estimate
Other operating expense came in lower than our estimate
EBITDA came in higher than our estimate
EBITDA margin came in higher than our estimate
Depreciation expense came in higher than our estimate
Interest expense came in higher than our estimate

1,824.6
17.1
793.8
833.5
1.1
277.0
127.0
150.0

1,417.9
13.4
746.4
748.8
0.0
2.7
0.9
1.8

1,682.5
13.4
898.2
857.9
25.9
-81.2
-112.3
31.1

21.3
171.3

29.9
31.8

31.3
62.4

-32.1
174.4

58.4
-923.4

-63.6
LP

PAT came in higher than our estimate

3.3
5404

3.2
4500

3.1
5469

5.9
-1.2

2.6
3443

26.3
57.0

Sales volume came in marginally higher than our estimate

EBITDA/tonne came higher than our estimate

Source: Company, ICICIdirect.com Research

Change in estimates
(| Crore)
Revenue
EBITDA
EBITDA Margin (%)
EBITDA (|/tonne) *
PAT
EPS (|)

Old

FY17E
New

% Change

FY18E
Introduced

54,235
9,724
17.9
6750
1543
63.8

56,813
9,862
17.4
6750
2296
95.0

4.8
1.4
-57 bps
0.0
48.8
48.8

62,298
10,969
17.6
7000
3198
132.3

Comments
Upward revised FY17E revenue due to higher sales volume estimate

Maintained EBITDA/tonne estimate

Upward revised FY17E PAT estimate
Upward revised FY17E EPS estimate

Source: Company, ICICIdirect.com Research, *-Standalone entity

Assumptions

Total Steel Sales (MT)

EBITDA/tonne (|/tonne) *

FY16
12.1
4,718

Current
FY17E
FY18E
14.0
15.0
6,750
7,000

Earlier
FY17E
Comments
13.5 Downward revised FY16E sales volume estimate
6,750 Downward revised FY16E and FY17E EBITDA/tonne estimate

esv

Source: Company, ICICIdirect.com Research, *-Standalone entity

ICICI Securities Ltd | Retail Equity Research

Page 2

Company Analysis
JSW Steel, post its merger with JSW Ispat, got catapulted to the position
of one of the leading steel producers in India (combined steelmaking
capacity of 14.3 MT). In terms of capacity wise break-up, out of 14.3 MT,
10 MT is in Vijayanagar, Karnataka [8.4 MT through blast furnace (BF)
route with balance 1.6 MT through the Corex route], 3.3 MT in Dolvi,
Maharashtra (erstwhile Ispat Industries) and 1 MT in Salem, Tamil Nadu.
Currently company is in the process of expanding its capacity to 18 MT.
Sales volume guidance of 15 MT for FY17E, implying a growth of 24%...
For FY17E, JSW Steel has guided crude steel production and saleable
steel sales guidance of 15.75 MT and 15 MT respectively. The sales
volume guidance looks optimistic considering moderate demand growth,
threat of imports and capacity expansion by peer group companies such
as Tata Steel, SAIL, etc. We have modelled sales volume of 14 MT for
FY17E and 15 MT for FY18E. For FY16 JSW steel saleable steel sales
volume stood at 12.1 MT.
Exhibit 1: Sales volume trend
16.0
14.0

Exhibit 2: ..EBITDA/tonne to firm up going forward

14.0

15.0

8000

6000

10.0

4718

5000

8.0

|/tonne

6.0
4.0

4000
3000
2000

2.0

1000

0.0
FY16

FY17E

FY18E

0
FY16

Source: Company, ICICIdirect.com Research

FY17E

FY18E

Source: Company, ICICIdirect.com Research

Elevated debt level remains area of concern

Post the merger with Ispat Industries, the debt level of JSW Steel has
increased significantly. On a consolidated basis, at the end of Q4FY16, the
net gearing was at 1.78x while net debt to EBITDA was at 6.33x. On a
standalone basis, at the end of Q4FY16, net gearing was at 1.41x while
net debt to EBITDA was at 5.35x.
Exhibit 3: Gross debt & net debt trend
40000
35000
30000

35589

37911

33895

38461

37727

34885

32971

15000

34762

20000

34099

| crore

25000
39911

million tonne

12.0

7000

6750

7000

12.1

10000
5000
0
FY14

FY15
Gross Debt

FY16

FY17E

FY18E

Net Debt

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 3

Key takeaway from conference call

JSW Steel has chalked out capex of |7000 crore for next two years,
broken up as |4000 crore for FY17E and |3000 crore for FY18E. Some of
key capex programmes are as follows

Pipe conveyor system at Vijayanagar

A pipe conveyor system for transporting iron ore from the yard
near the mines to the Vijayanagar plant will be set up with a
capacity of 20 Million tonnes per annum (Mtpa). This will be an
environment friendly solution and reduce transportation costs of
iron ore to the plant. The estimated project cost is |650 crore and
is expected to be commissioned in a period of 24 months

Water reservoir at Vijayanagar

JSW Steel will build a water reservoir facility to augment the
storage capacity of water at its Vijayanagar plant. The investment
is strategic in nature for un-interrupted operations of the plant.
The estimated project cost is | 520 crore and is expected to be
commissioned in a period of 26 months.

Tinplate at Tarapur complex

JSW Steels subsidiary , JSW Steel coated products is setting up
a Tin plate mill and related facilities at its Tarapur work to cater to
the increasing demand for tin plate. The estimated project cost is
|650 crore and is expected to be commissioned in a period of 24
months.

Coke oven plant at Dolvi

The company had earlier decided to setup a 3mtpa coke oven
plant at Dolvi through Dolvi coke projects limited (DCPL). The
company holds ~40% stake in DCPL. The first phase of the coke
oven is 1.5mtpa which will take care of the open coke
requirements for Dolvi and Vijaynagar. The company has got the
EC of 3 million tonne coke oven plant which will eventually take
care of capacity expansion of Dolvi from 5 MT to 10 MT. The total
cost for the first phase of the plant is |2000 crore, with | 700 crore
of equity and the remaining being debt. JSW Steels contribution
is | 500 crore.

Going forward Chile and US coking coal operations will remain under
pressure in near future, while, some improvement can be expected in US
Plate and Pipe mills
Amba river coke reported EBITDA of |166 crore during Q4FY16
The company highlighted that in FY17 net debt is going to move up on
account of new Indian accounting standards. Excluding the impact of IndAS, net debt would have reduced YoY on 31st Mar 2017.
Capital acceptance and revenue acceptances stood at US$447 million and
US$1233 million respectively
JSW Steel continues to get relaxation from most of the lenders regarding
covenant testing. Current relaxation has led to Net Debt/EBITDA roadmap
(as sought by the lenders) reducing from 6.75x in FY16 to 5x in FY17E and
4x in FY18E. Similarly desired Net Debt to Equity trajectory is 2.5x for 17E
and 2x in FY18E. Interest costs for the company is 7.16% which is down
15bps YoY.
Mine auction is expected to start in July 16. Total iron ore availability in
Karnataka is likely to go up to 29 MT in FY17

ICICI Securities Ltd | Retail Equity Research

Page 4

Performance of subsidiaries
JSW Steel Coated Products
During the quarter, JSW Steel Coated Products registered production
(galvanised/galvalume products) volume of 0.40 MT and sales volume of
0.42 MT. The gross turnover and net sales for the quarter were at | 1996
crore and | 1835 crore, respectively. It recorded an operating EBITDA of
|95 crore and net profit after tax of | 24 crore for the quarter.
Chile iron ore mines
The Chile operations remain under care and maintenance from end April
2015. The company reported an EBITDA loss of US$0.33 million for the
quarter.
US plate and pipe mill
The US based pipe and plate mill facility produced 0.032 MT of plates and
0.011 MT of pipes, reporting capacity utilisation of 15% and 8%,
respectively, in Q4FY16. Sales volumes for the quarter were at 0.030 MT
of plates and 0.012 MT of pipes. The company has reported an EBITDA
loss of US$ 10.20 million for the quarter.
Project update
During the year FY16, the company has commissioned Steek Melting
Shop III (SMS-III) and balance portion of CRM-II including electrical steel
complex at Vijayanagar. The three Blast Furnaces which were under shut
down for refining and modification/capacity augmentation (one at each
location viz Vijayanagar, Dolvi and Salem works) have been recommissioned and ramp up is progressing satisfactorily and are likely to
complete as per schedule.

ICICI Securities Ltd | Retail Equity Research

Page 5

Valuation
JSW Steel reported better than expected EBITDA/tonne for Q4FY16
driven by improved product mix and cost optimization. For Q4FY16 value
added products constituted ~36% of total sales volume. For FY17E we
have modelled EBITDA/tonne of |6750/tonne, while for FY18E we have
modelled EBITDA/tonne of |7000/tonne. We value the stock at 6x FY18E
EV/EBITDA and arrive at a target price of |1250. We have a HOLD
recommendation on the stock.
Exhibit 4: Target price calculation

Target Price Calculation

Particular

Unit

EBITDA (JSW Steel & Ispat Combined)

| crore

Value
10969

EV/EBITDA Multiple

Enterprise Value (EV)

| crore

65813

6.0

Gross Debt

| crore

39911

Cash & Cash Eq

| crore

4322

Net Debt

| crore

35589

Implied Market Cap

| crore

30224

No of Shares

crore

24.2

Target Price

1250

Source: Company, ICICIdirect.com Research

Exhibit 5: Valuation Matrix

FY15
FY16
FY17E
FY18E

Sales
(| Crore)

Growth
(% YoY)

EPS
(|)

Growth
(% YoY)

PE
(x)

EV/EBIDTA
(x)

P/ BV
(x)

RoNW
(%)

RoCE
(%)

52971.5
41878.9
56812.7
62297.6

3.4
-20.9
35.7
9.7

76.3
57.2
95.0
132.3

-14.8
PL
66.0
39.3

17.5
NM
14.1
10.1

6.9
11.5
6.7
6.2

1.4
1.5
1.3
1.2

8.0
6.4
9.4
11.8

10.3
4.8
10.6
11.5

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 6

Company snapshot
1,600
1,400
1,200

Target Price: 1250

1,000
800
600
400
200

Jan-17

Oct-16

Jul-16

Apr-16

Jan-16

Oct-15

Jul-15

Apr-15

Jan-15

Oct-14

Jul-14

Apr-14

Jan-14

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Source: Bloomberg, Company, ICICIdirect.com Research

Key events
Date
Dec-10

Event
Acquires majority stake in Ispat Industries (capacity 3.3 MTPA) for a consideration of | 2157 crore

Mar-11

Coking coal price sky rocket touching highs of US$330/tonne on account of floods in Australia (Queensland)

Jun-11

Iron ore mining ban imposed in Karnataka with NMDC being the only miner allowed to mine under supervision of Supreme Court of India

Dec-11
Feb-12

Mines & Mineral (Development & Regulation) Bill introduced in Parliament. Proposes payment of amount equivalent to royalty for development of the areas in which the
miners operate. Export duty increased to 30% iron ore exports from India
JFE raises stake in JSW Steel to 15%

Sep-12

JSW Steel merges JSW Ispat with itself. Share swap ratio fixed at 1:72 i.e. for every 72 shares of JSW Ispat one would get one share of JSW Steel

Oct-13

Announces a price hike of ~| 2000/ tonne to mitigate the rising input costs (coking coal on account of currency depreciation)

Dec-13

Announces a price hike of ~2% (| 700-1000/tonne) for its steel products effective from January 1, 2014

Feb-16

Moody's downgraded JSW Steel's credit rating by two notches from Ba1 to Ba3

Feb-16

JSW Steel recommisioned two of its blast furnaces at Vijaynagar and Salem which were shut since August and Novemeber 2015 for relining and modification

Feb-16

ICRA downgraded the long term credit rating of the company to ICRA AA- from ICRA AA and reaffirmed the short term rating at ICRA A1+

Mar-16

CARE Ratings downward revised the long term credit rating of the company to CARE AA- from CARE AA, while reaffirming its short term rating at CARE A1+

Apr-16

Fitch Ratings downgraded the credit rating of JSW Steel from BB+ to BB

Apr-16

The blast furnace at Dolvi was recommisioned after it was shut down for relining and modification in November 2015

Source: Company, ICICIdirect.com Research

Top 10 Shareholders

Shareholding Pattern

Rank Name

Latest Filing Date

31-Dec-15

% O/S Position (m)

0.21

50.9

Change (m)

Jindal Organisation

0.4

JFE Steel Corporation

31-Dec-15

0.15

36.3

0.0

Vividh Consultancy & Advisory Services Pvt. Ltd.

31-Dec-15

0.06

13.9

0.0

Sahyog Tradecorp Pvt. Ltd.

31-Dec-15

0.05

11.0

0.0

M. M. Warburg Bank (Schweiz) AG

31-Dec-15

0.05

10.9

-1.2

Danta Enterprises Pvt. Ltd.

31-Dec-15

0.03

6.0

0.0

Virtuous Tradecorp Pvt. Ltd.

31-Dec-15

0.03

6.0

0.0

JSW Techno Projects Management, Ltd.

1-Sep-15

0.02

5.0

5.0

Gagandeep Credit Capital Pvt. Ltd.

31-Dec-15

0.02

4.6

0.0

10

Dimensional Fund Advisors, L.P.

29-Feb-16

0.02

4.2

0.0

(in %)
Sep-14 Dec-14 Mar-15
Promoter
39.6
40.0
40.0
FII
19.9
19.0
19.0
DII
4.1
4.2
4.2
Others
36.5
36.8
36.8

Jun-15
40.4
18.5
5.3
35.8

Sep-15
41.5
17.2
5.2
36.2

Source: Reuters, ICICIdirect.com Research

Recent Activity
Buys
Investor Name
Invest AD

Sells
Value (M) Shares(M) Investor Name
40.7

2.6 M. M. Warburg Bank (Schweiz) AG

Value (M) Shares(M)

-18.3

-1.2

Jindal Organisation

6.5

0.4 IDFC Asset Management Company Private Limited

-9.0

-0.5

Life Insurance Corporation of India

4.3

0.3 Norges Bank Investment Management (NBIM)

-5.7

-0.4

Reliance Capital Asset Management Ltd.

2.9

0.2 Raiffeisen Kapitalanlage-Gesellschaft mbH

-1.5

-0.1

Amundi Asset Management

0.5

0.0 J.P. Morgan Asset Management (Hong Kong) Ltd.

-0.8

-0.1

Source: Reuters, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 7

Financial summary (Cons.)

Profit and loss statement
(Year-end March)
Total operating Income
Growth (%)
Raw Material Expenses
Employee Expenses
Power and Fuel Costs
Mfg and Other expenses
Total Operating Expenditure
EBITDA
Growth (%)
Depreciation
Interest
Other Income
PBT
Exceptional Item
Total Tax
Reported PAT Before MI
Profit/(loss) - JV/MI/Associate
Reported PAT After MI
Growth (%)
Adj PAT after MI
Adj 'EPS (|)

(| crore)
FY15
52,971.5
3.4
29,686.0
1,532.8
4,123.1
8,227.3
43,569.2
9,402.3
2.6
3,434.5
3,493.0
111.4
2,586.2
-47.1
819.4
1,719.7
76.9
1,796.6
297.5
1,843.7
76.3

FY16
41,878.9
-20.9
22,750.6
1,568.0
3,665.9
7,821.3
35,805.9
6,073.0
-35.4
3,187.9
3,302.7
168.2
-249.4
-2,125.4
-1,524.1
-850.8
108.8
-741.9
PL
1,383.5
57.2

FY17E
56,812.7
35.7
31,129.9
2,183.3
5,529.6
8,107.7
46,950.5
9,862.1
62.4
3,308.9
3,314.5
160.0
3,398.7
0.0
1,121.6
2,277.1
19.1
2,296.3
-409.5
2,296.3
95.0

FY18E
62,297.6
9.7
34,264.0
2,430.9
6,303.1
8,330.7
51,328.7
10,968.9
11.2
3,495.8
3,411.1
200.0
4,262.0
0.0
1,065.5
3,196.5
1.1
3,197.6
39.3
3,197.6
132.3

Cash flow statement

(Year-end March)
Profit after Tax
Add: Depreciation
(Inc)/dec in Current Asset
Inc/(dec) in CL&Provisions
Others
CF from operating activities
(Inc)/dec in Investments
(Inc)/dec in Fixed Assets
Others
CF from investing activities
Issue/(Buy back) of Equity
Inc/(dec) in loan funds
Dividend paid & dividend tax
Inc/(dec) in Sec. premium
Others
CF from financing activities
Net Cash flow
Opening Cash
Closing Cash

(| crore)
FY15
1,796.6
3,434.5
-2,831.3
6,367.0
766.0
9,532.8
63.5
-7,406.8
-311.9
-7,655.1
0.0
122.8
-339.0
-341.8
-69.4
-627.4
1,250.3
663.0
1,913.2

FY16
-741.9
3,187.9
2,791.2
-4,071.7
-1,744.1
-578.7
-19.2
-4,133.9
735.2
-3,417.8
0.0
3,576.4
-240.0
-428.2
-90.9
2,817.3
-1,179.3
1,913.2
734.0

FY17E
2,296.3
3,308.9
-6,445.0
8,320.0
0.0
7,480.2
-100.0
-4,000.0
50.0
-4,050.0
-0.4
-550.0
-367.3
770.0
0.0
-147.7
3,282.5
734.0
4,016.4

FY18E
3,197.6
3,495.8
-4,262.3
-708.6
0.0
1,722.4
-100.0
-3,000.0
50.0
-3,050.0
0.0
2,000.0
-367.3
0.0
0.0
1,632.7
305.2
4,016.4
4,321.6

FY15

FY16

FY17E

FY18E

76.3
216.4
953.8
11.0
79.2

57.2
101.2
895.4
7.5
30.4

95.0
231.9
1,007.1
12.0
166.2

132.3
276.9
1,124.1
12.0
178.8

17.7
4.9
3.5
135
17
163

14.5
-0.6
3.3
135
24
172

17.4
6.0
4.0
145
28
180

17.6
6.8
5.1
155
32
160

8.0
10.3
10.7

6.4
4.8
4.9

9.4
10.6
11.3

11.8
11.5
11.9

17.5
6.9
1.2
0.6
1.4

NM
11.5
1.7
0.8
1.5

14.1
6.7
1.2
0.6
1.3

10.1
6.2
1.1
0.5
1.2

3.7
1.5
1.0
0.6

6.3
1.8
1.0
0.6

3.8
1.6
1.1
0.6

3.6
1.5
1.3
0.7

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

Balance sheet

(| crore)

(Year-end March)
Liabilities
Share Capital
Reserve and Surplus
Total Shareholders funds
Total Debt
Deferred Tax Liability
Minority Interest / Others
Total Liabilities

FY15

FY16

FY17E

FY18E

1,067.2
21,986.9
23,054.1
34,884.6
3,154.7
778.9
61,872.3

1,067.2
20,576.7
21,643.9
38,461.0
1,420.2
794.4
62,319.5

1,066.8
23,275.7
24,342.5
37,911.0
1,420.2
844.4
64,518.0

1,066.8
26,106.0
27,172.8
39,911.0
1,420.2
894.4
69,398.3

Assets
Gross Block
Less: Acc Depreciation
Net Block
Capital WIP
Total Fixed Assets
Investments
Inventory
Debtors
Loans and Advances
Other Current Assets
Cash
Total Current Assets
Current Liabilities
Provisions
Total Current Liabilities
Net Current Assets
Others Assets
Application of Funds

74,810.4
24,659.0
50,151.5
8,704.7
58,856.2
599.3
11,009.0
2,499.8
8,922.9
268.2
1,913.2
24,613.1
23,690.6
356.3
24,046.9
566.2
1,850.6
61,872.3

82,944.3
27,846.9
55,097.4
4,704.7
59,802.1
618.4
8,403.4
2,801.6
7,904.7
799.0
734.0
20,642.7
19,697.2
278.0
19,975.1
667.5
1,231.4
62,319.5

88,944.3
31,155.8
57,788.5
2,704.7
60,493.3
718.4
12,366.7
4,358.2
8,554.7
1,074.0
4,016.4
30,370.1
28,017.2
278.0
28,295.2
2,074.9
1,231.4
64,518.0

91,844.3
34,651.5
57,192.8
2,804.7
59,997.5
818.4
14,550.5
5,461.7
9,254.7
1,349.0
4,321.6
34,937.5
27,308.6
278.0
27,586.5
7,351.0
1,231.4
69,398.3

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Key ratios
(Year-end March)
Per share data (|)
Adj EPS
Cash EPS
BV
DPS
Cash Per Share
Operating Ratios (%)
EBITDA Margin
PBT / Total Operating income
Adj PAT Margin
Inventory days
Debtor days
Creditor days
Return Ratios (%)
Adj RoE
Adj RoCE
RoIC
Valuation Ratios (x)
P/E
EV / EBITDA
EV / Net Sales
Market Cap / Sales
Price to Book Value
Solvency Ratios
Debt/EBITDA
Debt / Equity
Current Ratio
Quick Ratio

Source: Company, ICICIdirect.com Research

Page 8

ICICIdirect.com coverage universe (Metals & Mining)

CMP
Company
Hindalco Industries
Hindustan Zinc
JSW Steel
NMDC

(|)

M Cap
TP (|) Rating

EPS (|)

(| Cr)

FY15

FY16

P/E (x)
FY17E

EV/EBITDA (x)

FY15 FY16 FY17E

FY15

ROCE(%)

FY16 FY17E

FY15

ROE(%)

FY16 FY17E FY15

FY16 FY17E

89

65

Hold

18409

13.5

3.5

9.0

6.0

23.1

8.9

8.0

9.5

7.1

5.0

3.4

5.3

2.2

1.9

4.6

168

175

Hold

70959

19.4

19.3

16.0

8.9

8.9

10.8

5.7

5.7

6.7

20.9

21.6

18.9

18.9

21.8

16.1

1309 1250

Hold

31649

76.3

57.2

95.0

17.5

NM

14.1

6.9

11.0

6.7

10.3

4.8

10.6

8.0

6.4

9.4

Hold

36696

16.2

10.3

11.0

6.1

9.5

8.9

2.6

4.7

5.4

23.6

13.3

13.8

19.9

12.1

12.3

93

95

SAIL

42

35

Sell

17451

5.1

-4.9

2.8

9.9

NA

17.7

8.1

4.0

-2.3

4.3

4.9

-4.7

2.8

Vedanta

99

100

Hold

29650

19.8

7.3

1.9

5.2

14.2

53.0

4.5

6.2

6.5

11.3

6.5

5.9

10.9

4.8

1.3

329

325

Hold

31964

NM

4.4

19.7

NM

60.8

13.7

7.8

9.4

6.8

5.8

4.0

6.4

0.0

1.2

5.2

Tata Steel

10.4 106.4

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 9

RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns

ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey

Head Research

pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai 400 093
research@icicidirect.com

ICICI Securities Ltd | Retail Equity Research

Page 10

Disclaimer
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ICICI Securities Ltd | Retail Equity Research

Page 11