Electrosteel Steels (ESL), an associate of Electrosteel Castings (34.4% stake),
reported its 2Q FY 2012 results.
ESL did not report any sales during 2Q FY 2012, as it suspended operations during the quarter to synchronize its various units.
However, on account of certain fixed costs, the company reported net loss of Rs. 23 cr
in 2Q FY 2012. ESL had commenced operations of pig iron during FY 2011.
However, it was subsequently shut down for synchronization with other facilities at
the plant. We believe ESL’s financials would turn around once it receives coking
coal and iron ore from Electrosteel Castings at a substantial discount to market
prices.
Meanwhile, we maintain our Buy rating on Electrosteel Castings with a
target price of Rs. 35.
Review by Angle Broking
reported its 2Q FY 2012 results.
ESL did not report any sales during 2Q FY 2012, as it suspended operations during the quarter to synchronize its various units.
However, on account of certain fixed costs, the company reported net loss of Rs. 23 cr
in 2Q FY 2012. ESL had commenced operations of pig iron during FY 2011.
However, it was subsequently shut down for synchronization with other facilities at
the plant. We believe ESL’s financials would turn around once it receives coking
coal and iron ore from Electrosteel Castings at a substantial discount to market
prices.
Meanwhile, we maintain our Buy rating on Electrosteel Castings with a
target price of Rs. 35.
Review by Angle Broking
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