bhushan steel, 1q fy 2014

7/27/2019 Bhushan Steel, 1Q FY 2014

1/13

Please refer to important disclosures at the end of this report 1

Quarterly performance (Standalone)Particulars (` cr) 1QFY14 1QFY13 % chg (yoy) 4QFY13 % chg (qoq)Net sales 2,374 2,747 (13.6) 2,694 (12)EBITDA 737 862 (14.5) 922 (20)

% margin 31.1 31.4 (33)bp 34.2 (315)bp

Adj. PAT 76 206 (63.0) 280 (73)Source: Company, Angel Research

For 1QFY2014, Bhushan Steel (Bhushan) reported a decline in its top-line as well

as bottom-line due to lower volumes and higher costs. Werecommend a Reducerating on the stock.Net sales falls 13.6% yoy: During 1QFY2014, Bhushans net sales declined by13.6% yoy to `2,374cr mainly on account of lower volumes which although were

partially offset by higher realisations. Flat products sales volumes decreased by

13.0% yoy to 438,547 tonne, whereas long products sales volumes declined by

21.0% yoy to 77,950 tonne in 1QFY2014. Nevertheless, average gross

realizations increased marginally by 2.0% yoy to `52,873/tonne.

Higher depreciation and interest costs hit bottom-line: The EBITDA decreased by14.5% yoy to `737cr mirroring the fall in net sales. EBITDA/tonne stood at

`14,276 in 1QFY2014 compared to `14,342 in 1QFY2013 and `14,668 in

4QFY2013. Depreciation expense increased 13.3% yoy to `234cr on account ofincreased capacity. Interest expenses also increased 6.6% yoy to `403cr due

to increase in debt. Consequently, the net profit declined by 63.0% yoy to `76cr.

Outlook and valuation: Bhushan has nearly doubled its steel capacity over thepast five years. We expect the benefits of its phase III expansion to be witnessed

during FY2014-15 with strong volume growth. However, we remain concerned

over its high leverage (2.5x for FY2014E and 2.3x for FY2015E). Further, at the

current market price, the stock is trading at 9.1x FY2014E and 6.7x FY2015E

EV/EBITDA, ie at a significant premium over its peers. Valuing the stock at 6.5xFY2015 EV/ EBITDA, we derive a target price of `419 and recommend a Reducerating on the stock.Key financials (Standalone)

Y/E March (` cr) FY2012 FY2013E FY2014E FY2015ENet sales 9,623 10,306 12,640 15,667% chg 42.2 7.1 22.7 23.9

Net profit 1,024 909 549 819% chg 1.8 (11.2) (39.5) 49.0

EPS (`) 47.8 42.8 25.9 38.6OPM (%) 31.2 32.2 28.5 31.5

P/E (x) 9.5 10.7 17.7 11.9

P/BV (x) 1.3 1.1 1.0 1.0

RoE (%) 15.4 11.2 6.1 8.5RoCE (%) 8.7 7.4 6.6 8.9

EV/Sales (x) 3.2 3.1 2.6 2.1

EV/EBITDA (x) 10.1 9.5 9.1 6.7

Source: Company, Angel Research: Note: CMP as of August 14, 2013

REDUCECMP `459

Target Price `419

Investment Period -

Stock Info

Sector

20,687

Bloomberg Code BHUS@IN

Shareholding Pattern (%)

Promoters 70.7

MF / Banks / Indian Fls 2.8

FII / NRIs / OCBs 1.8Indian Public / Others 24.7

Abs. (%) 3m 1yr 3yr

Sensex (4.5) 9.2 6.6

BSL (1.0) (0.8) 45.0

Face Value (`)

BSE Sensex

Nifty

Reuters Code

Steel

Avg. Daily Volume

Market Cap (` cr)

Beta

52 Week High / Low

Net Debt (` cr)

2

19,368

5,742

BSSL.BO

10,405

0.7

506/421

79,347

Bhavesh ChauhanTel: 022- 3935 7800 Ext: [email protected]

Vinay RachhTel: 022- 39357600 Ext: 6841

[email protected]

Bhushan SteelPerformance Highlights

1QFY2014 Result Update | Steel

August 16, 2013


2/13

Bhushan Steel | 1QFY2014 Result Update

August 16, 2013 2

Exhibit 1:1QFY2014 performance (Standalone)Y/E March (` cr) 1QFY14 1QFY13 yoy % 4QFY13 qoq % FY2013 FY2012 yoy %Net sales 2,374 2,747 (13.6) 2,694 (11.9) 10,306 9,623 7.1Raw material 1,335 1,547 (13.7) 1,467 (9.0) 5,774 5,441 6.1% of net sales 56.2 56.3 54.5 56.0 56.5

Staff cost 44 43 3.2 43 2.5 173 144 20.5

% of net sales 1.9 1.6 1.6 1.7 1.5

Other expenditure 374 389 (3.8) 387 (3.3) 1,482 1,352 (71.3)

% of net sales 15.8 14.2 14.4 14.4 14.0

Total expenditure 1,754 1,979 (11.4) 1,898 (7.6) 7,429 6,937 7.1

% of net sales 73.9 72.0 70.4 72.1 72.1

Operating profit 621 768 (19.2) 796 (22.0) 2,877 2,686 7.1OPM(%) 26.1 28.0 29.6 27.9 27.9

Other operating income 117 94 24.0 125 (7.1) 438 318 (60.6)

EBITDA 737 862 (14.5) 922 (20.0) 3,315 3,004 10.3EBITDA margins (%) 31.1 31.4 34.2 32.2 31.2

Interest 403 378 6.6 335 20.2 1,287 1,046 23.1

Depreciation 234 207 13.3 210 11.3 831 620 34.0

Other income 3 5 (28.2) 6 (40.9) 17 27 (36.7)

Exceptional items - - - - -

Profit before tax 104 282 (63.2) 382 (72.7) 1,214 1,365 (11.1)% of net sales 4.4 10.3 14.2 11.8 14.2

Tax 28 76 (63.5) 102 (72.7) 349 305 14.3

% of PBT 26.7 27.0 26.6 28.7 22.3

Profit after tax 76 206 (63.0) 280 (72.8) 909 1,024 (11.2)Adjusted PAT 76 206 (63.0) 280 (72.8) 909 1,024 (11.2)

Source: Company, Angel Research

Exhibit 2:Quarterly production trend (Gross)(tonne) 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 yoy % qoq %Flat products 843,488 892,877 893,567 819,571 832,528 1,143,097 956,838 7 (16)Cold rolled steel 319,080 346,596 345,492 325,049 331,386 415,689 369,907 7 (11)

Galvanized steel 156,166 165,217 161,521 160,843 171,734 185,312 186,084 15 0

H&T 3,255 3,383 3,080 3,289 3,310 3,292 3,126 1 (5)

HTSS 2,364 2,725 3,008 3,062 2,926 2,823 3,211 7 14

Colour coating 29,897 38,084 41,844 43,985 38,318 48,283 43,241 3 (10)

Hot rolled steel 323,487 326,886 334,241 279,967 284,854 487,698 351,269 5 (28)

Long products 93,105 102,400 93,542 78,772 82,690 80,123 70,648 (24) (12)Billets 48,734 57,443 48,797 35,601 38,476 36,616 28,118 (42) (23)

Sponge iron - - - - - - -

Wire rods - - - - - - -

Tube and shutters 44,371 44,957 44,745 43,171 44,214 43,507 42,530 (5) (2)

Formed sections - - - - - - -

Total production 936,593 995,276 987,109 898,343 915,218 1,223,220 1,027,486 4 (16)Source: Company, Angel Research


3/13


August 16, 2013 3

Exhibit 3:Quarterly sales volume trend (net)(tonnes) 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 yoy % qoq %Flat products 432,729 532,422 502,091 456,774 482,949 548,717 438,547 (13) (20)Cold rolled steel 120,398 140,313 126,145 124,508 127,778 156,315 142,320 13 (9)Galvanized steel 109,511 138,350 122,351 107,834 123,409 137,268 145,520 19 6

H&T 3,170 3,506 2,994 3,068 3,458 3,266 3,228 8 (1)

HTSS 2,143 2,798 2,559 2,552 2,464 2,482 2,287 (11) (8)

Colour coating 29,752 36,979 41,588 42,283 37,034 45,711 44,441 7 (3)

Hot rolled steel 164,859 202,928 201,246 172,206 188,806 203,675 100,751 (50) (51)

Long products 83,009 87,646 99,128 85,260 75,702 79,617 77,950 (21) (2)Billets 40,662 43,301 56,069 43,376 34,976 36,947 37,017 (34) 0

Sponge iron - - - - - - -

Wire rods - - - - - - -

Tube and shutters 42,347 44,345 43,059 41,884 40,726 42,670 40,933 (5) (4)

Formed sections - - - - - - -

Total sales volume 515,738 620,068 601,219 542,034 558,651 628,334 516,497 (14) (18)Source: Company, Angel Research

Exhibit 4:Quarterly realization trend (Gross)(`/tonne) 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 yoy % qoq %Flat products 49,122 48,158 50,604 49,782 46,783 46,779 49,889 (1) 7Cold Rolled Steel 49,130 50,517 51,834 51,274 49,007 48,084 47,812 (8) (1)

Galvanized Steel 55,764 51,681 56,822 54,460 50,969 50,936 53,279 (6) 5

H&T 95,086 87,251 94,322 93,763 95,431 90,141 92,918 (1) 3HTSS 62,566 60,482 65,891 65,931 66,558 69,560 70,425 7 1

Colour Coating 66,696 64,494 67,366 66,729 63,509 63,645 63,751 (5) 0

Hot rolled steel 39,690 40,457 41,841 40,590 38,113 38,217 39,967 (4) 5

Long products 47,213 50,604 48,987 49,238 49,034 46,779 47,711 (3) 2Billets 38,835 41,469 42,342 41,427 41,228 39,385 39,379 (7) (0)

Sponge Iron - - - - - - -

Wire Rods - - - - - - -

Tube and Shutters 55,258 55,436 57,646 57,331 55,738 54,604 55,245 (4) 1

Formed Sections - - - - - - -

Avg. gross realization 50,514 49,811 52,001 51,768 49,689 49,202 52,873 2 7Source: Company, Angel Research


4/13


August 16, 2013 4

Result highlights

Net sales decline 13.6% yoy

During 1QFY2014, Bhushans net sales declined by 13.6% yoy to `2,374cr mainlyon account of lower volumes which although were partially offset by higher

realisations. Flat products sales volumes decreased by 13.0% yoy to 438,547

tonne, whereas long products sales volumes declined by 21.0% yoy to 77,950

tonne in 1QFY2014. Nevertheless, average gross realizations increased

marginally by 2.0% yoy to `52,873/tonne.

Exhibit 5:Net sales down 13.6% yoy


EBITDA down 14.5% yoy on higher other operating income

The EBITDA decreased by 14.5% yoy to `737cr mirroring the fall in net sales.

EBITDA/tonne stood at `14,276 in 1QFY2014 compared to `14,342 in

1QFY2013 and `14,668 in 4QFY2013.

Exhibit 6:EBITDA margin stood at 31.1%


Exhibit 7:EBITDA/tonne falls yoy


2,318

2,743 2,747

2,4462,405

2,694

2,374

(20)

(10)

0

10

20

30

40

50

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800

3,000

3 QFY1 2 4 QFY12 1Q FY1 3 2 QFY1 3 3 QFY1 3 4 QF Y13 1Q FY1 4

(%)

(`cr)

Net sales yoy change (RHS)

724

898862

749 782

922

737

28

29

30

31

32

33

34

35

0

200

400

600

800

1,000

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

(%)

(`c

r)

EBITDA EBITDA margin (RHS)

14,039

14,475

14,342

13,825

13,994

14,668

14,276

13,400

13,600

13,800

14,000

14,200

14,400

14,600

14,800


(`/tonne)


5/13


August 16, 2013 5

Net profit falls 63.0% yoy

Depreciation expense increased 13.3% yoy to `234cr on account of increased

capacity. Interest expenses also increased 6.6% yoy to `403cr due to increase in

debt. Consequently, the reported net profit decreased by 63.0% yoy to `76cr.

Exhibit 8:Net profit stood at `76cr


277 331 206 202 221 280 76

11.912.1

7.5 8.29.2

10.4

3.2

0

2

4

6

8

10

12

14

0

50

100

150

200

250

300

350


(%)

(`

cr)

PAT PAT margin (RHS)


6/13


August 16, 2013 6

Investment rationale

Volume growth sweetened by increase in EBITDA/tonne

With the commissioning of Bhushans Phase-III expansion plan, we expect the

companys sales volume to grow by 24.2% in FY2014 and 20.5% in FY2015,

much higher than its peers. Despite the company not being integrated, the cost of

production is expected to be low due to a) combination of BF-EAF technology to

produce steel and b) lower conversion costs. The usage of BF-EAF technology will

result in lower coal costs.

Exhibit 9: EV/EBITDA band

Source: Bloomberg, Angel Research

Debt equity ratio at uncomfortable level for a non-integrated

commodity producer

On the back of massive expansion plans, the companys debt equity ratio is

expected to remain high at 2.5x and 2.3x for FY2014E and FY2015E, respectively.

This exposes the company to huge financial risk in case of a sharp decline in steel

prices.

0

5

10

15

20

25

30

35

40

0.0

1.0

2.0

3.0

4.0

FY10 FY11 FY12 FY13 FY14E FY15E

(%)

(mntonnes)

Sales Volume (LHS) Volume growth (RHS)


7/13


August 16, 2013 7

Outlook and valuation

Bhushan has nearly doubled its steel capacity over the past five years. We expect

the benefits of its phase III expansion to be witnessed during FY2014-15 with

strong volume growth. However, we remain concerned over its high leverage (2.5x

for FY2014E and 2.3x for FY2015E). Further, at the current market price, the stock

is trading at 9.1x FY2014E and 6.7x FY2015E EV/EBITDA, ie at a significant

premium over its peers. Valuing the stock at 6.5x FY2015 EV/ EBITDA, we derive atarget price of `419 and recommend a Reduce rating on the stock.Exhibit 10: EPS Angel forecast vs. consensus

Year (`) Angel forecast Bloomberg consensus Variation (%)FY2014E 25.9 49.2 (47.5)

FY2015E 38.6 64.5 (40.2)


Exhibit 11: EV/EBITDA band


Exhibit 12: P/E band


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Feb-0

8

Aug-0

8

Feb-0

9

Aug-0

9

Feb-1

0

Aug-1

0

Feb-1

1

Aug-1

1

Feb-1

2

Aug-1

2

Feb-1

3

Aug-1

3

(`

cr)

2x 5x 8x 11x 14x

0

100

200

300

400

500

600

Feb-0

8

Aug-0

8

Feb-0

9

Aug-0

9

Feb-1

0

Aug-1

0

Feb-1

1

Aug-1

1

Feb-1

2

Aug-1

2

Feb-1

3

Aug-1

3

(`)

5x 8x 10x 12x


8/13


August 16, 2013 8

Exhibit 13: P/BV band


Exhibit 14: Recommendation summary

Companies CMP Target Reco. Mcap Upside P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) RoCE (%)(`) Price (`) (` cr) (%) FY14E FY15E FY14E FY15E FY14E FY15E FY14E FY15E FY14E FY15E

SAIL 44 - Neutral 18,007 - 8.3 6.5 0.4 0.4 6.3 4.7 5.2 6.5 4.7 6.6

Tata Steel 250 313 Buy 24,260 25 6.5 4.8 0.6 0.6 4.6 4.1 10.4 12.9 9.1 10.6

JSW Steel 534 - Neutral 12,911 - 8.5 7.1 0.7 0.7 5.1 4.7 8.5 9.6 8.5 9.0

Bhushan 459 419 Reduce 10,405 (9) 17.7 11.9 1.0 1.0 9.1 6.7 6.1 8.5 6.6 8.9Source: Company, Angel Research

Company BackgroundIncorporated in January 1983, Bhushan Steel is Indias third largest secondary

steel producing company with an existing steel production capacity of 2.2mn

tonne. The company is the largest auto-grade steel-maker in India and specializes

in manufacturing value-added flat products. It has three manufacturing units in the

states of Uttar Pradesh (Sahibabad Unit), Maharashtra (Khopoli unit), and Orissa

(Meramandali unit) in India and has a sales network across many countries.

0

100

200

300

400

500

600

700

800

900

1,000

Apr-08

Dec-0

8

Aug-0

9

Apr-10

Dec-1

0

Aug-1

1

Apr-12

Dec-1

2

Aug-1

3

(`)

0.5x 1.0x 1.5x 2.0x


9/13


August 16, 2013 9

Profit & loss statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EGross sales 6,003 7,332 10,455 11,336 14,045 16,937Less: Excise duty (363) (563) (831) (1,030) (1,404) (1,270)Net sales 5,640 6,769 9,623 10,306 12,640 15,667Other operating income 0 232 318 438 460 483

Total operating income 5,640 7,000 9,941 10,744 13,101 16,150% chg 13.8 24.1 42.0 8.1 21.9 23.3

Total expenditure 4,188 4,970 6,937 7,429 9,495 11,221

Net raw materials 3,535 3,767 5,441 5,774 6,644 7,673

Other mfg costs 569 1,080 1,352 1,482 2,617 3,256

Personnel 84 123 144 173 234 293

EBITDA 1,453 2,030 3,004 3,315 3,606 4,929% chg 41.1 39.8 48.0 10.3 8.8 36.7

(% of Net sales) 25.8 30.0 31.2 32.2 28.5 31.5

Depreciation 209 278 620 831 1,122 1,458

EBIT 1,244 1,753 2,384 2,484 2,484 3,471% chg 56.5 40.9 36.0 4.2 0.0 39.7

(% of Net sales) 22.0 25.9 24.8 24.1 19.7 22.2

Interest charges 210 446 1,046 1,287 1,777 2,399

Other income 118 70 27 17 25 19

(% of PBT) 10.2 5.1 2.0 1.4 3.4 1.8

Share in profit of asso. - - - - - -

Recurring PBT 1,151 1,376 1,365 1,214 733 1,092% chg 105.3 19.5 (0.7) (11.1) (39.7) 49.0

Extra. Inc/(Expense) - - - - - -

PBT (reported) 1,151 1,376 1,365 1,214 733 1,092Tax 306 371 342 305 183 273

(% of PBT) 26.5 26.9 25.0 25.1 25.0 25.0

PAT (reported) 846 1,005 1,024 909 549 819Add: Earnings of asso. - - - - - -

Less: Minority interest - - - - - -

Extra. Expense/(Inc.) - - - - - -

PAT after MI (reported) 846 1,005 1,024 909 549 819ADJ. PAT 846 1,005 1,024 909 549 819% chg 100.8 18.8 1.8 (11.2) (39.5) 49.0

(% of Net sales) 15.0 14.8 10.6 8.8 4.3 5.2

Basic EPS (`) 39.8 47.3 47.8 42.8 25.9 38.6Fully Diluted EPS ( ) 39.8 47.3 47.8 42.8 25.9 38.6% chg 100.8 18.8 1.0 (10.5) (39.5) 49.0


10/13


August 16, 2013 10

Balance sheet (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ESOURCES OF FUNDSEquity share capital 42 111 128 135 135 135Reserves & surplus 3,949 5,785 7,268 8,632 9,156 9,950

Shareholders funds 3,992 5,896 7,396 8,767 9,292 10,086Share warrants - - - - - -

Minority interest - - - - - -Total loans 11,404 16,561 21,351 24,851 26,851 27,051Other liabilities - LT - 648 1,506 1,506 1,506 1,506Provisions - LT - - - - - -Deferred tax liability 330 698 1,039 1,039 1,039 1,039

Total liabilities 15,725 23,804 31,292 36,163 38,687 39,681APPLICATION OF FUNDSGross block 3,686 14,424 18,203 22,703 28,203 33,203

Less: Acc. depreciation 1,607 1,858 2,469 3,300 4,422 5,880

Net Block 2,079 12,566 15,734 19,403 23,781 27,323Capital work-in-progress 11,109 5,325 9,069 7,769 4,269 269

Goodwill - - - - - -

Investments 370 179 329 329 329 329Loans and advances - LT - 2,854 2,826 2,826 2,826 2,826

Other non-current assets - 0.4 19 19 19 19

Current assets 3,770 4,330 5,473 7,808 9,579 10,422Cash 120 35 335 2,819 3,597 3,583

Loans & advances 953 644 607 607 607 607

Other 2,697 3,652 4,532 4,382 5,375 6,232

Current liabilities 1,604 1,451 2,159 1,992 2,116 1,507Net current assets 2,167 2,879 3,315 5,816 7,462 8,915Mis. exp. not w/off - - - - - -

Total assets 15,725 23,804 31,292 36,163 38,687 39,681


11/13


August 16, 2013 11

Cash flow statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EProfit before tax 1,151 1,376 1,365 1,214 733 1,092

Depreciation 209 278 620 831 1,122 1,458Change in working capital (953) (825) (164) (17) (868) (1,467)

Less: Other income 176 494 1,295 - - -

Direct taxes paid 186 272 264 305 183 273

Cash flow from operations 397 1,051 2,852 1,722 803 810(Inc.)/ Dec. in fixed assets (2,901) (5,642) (4,658) (3,200) (2,000) (1,000)

(Inc.)/ Dec. in investments (259) 100 (146) - - -

(Inc.)/ Dec. in loans and adv. - - - - - -

Other income 24 24 12 - - -

Cash flow from investing (3,136) (5,518) (4,792) (3,200) (2,000) (1,000)Issue of equity 700 875 893 474 - -

Inc./(Dec.) in loans 3,062 5,130 4,041 3,500 2,000 200

Dividend paid 11 11 30 12 25 25

Others 1,017 1,612 2,645 - - -

Cash flow from financing 2,735 4,382 2,259 3,962 1,975 175Inc./(Dec.) in cash (4) (85) 319 2,484 778 (15)

Opening cash bal. 124 120 35 354 2,819 3,597Closing cash bal. 120 35 354 2,819 3,597 3,583


12/13


August 16, 2013 12

Key ratiosY/E March FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EValuation ratio (x)P/E (on FDEPS) 11.5 9.7 9.5 10.7 17.7 11.9P/CEPS 9.2 7.6 5.9 5.6 5.8 4.3

P/BV 2.5 1.7 1.3 1.1 1.0 1.0

Dividend yield (%) 0.1 0.1 0.1 0.1 0.2 0.2

EV/Sales 3.7 3.9 3.2 3.1 2.6 2.1

EV/EBITDA 14.2 12.9 10.1 9.5 9.1 6.7

EV/Total assets 1.3 1.1 1.0 0.9 0.8 0.8

Per share data (`)EPS (Basic) 39.8 47.3 48.2 42.8 25.9 38.6

EPS (fully diluted) 39.8 47.3 48.2 42.8 25.9 38.6

Cash EPS 49.7 60.4 77.4 81.9 78.7 107.2

DPS 0.5 0.5 0.5 0.5 1.0 1.0

Book value 186.2 277.7 348.3 412.8 437.5 474.9

DuPont analysisEBIT margin 22.0 25.9 24.8 24.1 19.7 22.2

Tax retention ratio (%) 73.5 73.1 75.0 74.9 75.0 75.0

Asset turnover (x) 0.4 0.4 0.4 0.3 0.4 0.5

RoIC (Post-tax) 7.1 6.8 6.8 6.1 5.7 7.6

Cost of debt (post tax) 1.6 2.3 4.1 4.2 5.2 6.7

Leverage (x) 2.8 2.8 2.8 2.5 2.5 2.3

Operating RoE 22.3 19.3 14.3 10.8 7.0 9.8

Returns (%)RoCE (Pre-tax) 9.4 8.9 8.7 7.4 6.6 8.9

Angel RoIC (pre-tax) 34.4 15.7 12.0 10.6 8.9 10.5

RoE 26.5 20.4 15.4 11.2 6.1 8.5

Turnover ratios (x)Asset turnover (gross block) 1.6 0.8 0.6 0.5 0.5 0.5

Inventory (days) 103 138 123 123 123 118

Receivables (days) 44 33 32 32 32 27

Payables (days) 80 72 52 52 52 52

WC cycle (days) 106 132 110 106 99 107

Solvency ratios (x)Net debt to equity 2.8 2.8 2.8 2.5 2.5 2.3

Net debt to EBITDA 7.5 8.1 6.9 6.5 6.4 4.7

Interest coverage 5.9 3.9 2.3 1.9 1.4 1.4


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A 16 2013 13

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment

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Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make

investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this

document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliable

sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this

document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way

responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.

Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot

testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.

While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may be

regulatory, compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking

or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or

in the past.

Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from

or in connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates mayhave investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Bhushan Steel

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors

bhushan steel, 1q fy 2014

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