Tata Sponge Iron Ltd.’s (TSIL) revenue remained flat yoy at Rs.174 cr in 2Q FY 2012
as compared to Rs.175 cr in 2Q FY 2011; while on a qoq basis, revenue in creased by
19.2% from Rs.146 cr in 1Q FY 2012.
The Companies sponge iron production was hampered in the previous quarter due to iron ore supply issues. The company’s EBITDA margin came in at 17.2% for 2Q FY 2012, up 8.02% yoy from 9.2% in 2Q FY 2011, due to lower raw-material prices.
Profit for the September quarter stood at Rs.22 cr as compared to Rs.10 cr in 2Q FY 2011.
We maintain our Buy recommendation on the stock with a target price of Rs.429, based on a target PE of 6x for FY 2013E.
Review by Angle Broking
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