Edelweiss maintains ‘Buy’ rating on Usha Martin
Since the company failed to procure adequate power from a local power plant in the interim, Q3FY11 production could be hit.
By ET Bureau |
USHA MARTIN
RESEARCH: EDELWEISS
RATING: BUY
CMP: Rs 68
Edelweiss maintains ‘Buy’ rating on Usha Martin, but downgrades the relative rating to ‘Sector Performer’ from ‘Sector Outperformer’. They cut their fair valuation from 125/share to 91/share. Usha Martin’s 30-MW captive power plant is shut down since last month due to a breakdown in the turbine.
Management expects to restart operations post repairs in the next seven days. However, since the company failed to procure adequate power from a local power plant in the interim, Q3FY11 production could be hit. Edelweiss, however, cuts the volume estimates from 547 kt to 519 kt for FY11 and from 750 kt to 700 kt for FY12.
Thermal coal supply from UML’s captive mines has been affected since the Jharkhand government has allowed loading of only 15t per truck against 30t earlier. Hence, there is an increased requirement of trucks, which is not fully met. As a result, captive coal availability is expected to reduce from 120kt in Q2FY11 to 70-80kt in Q3FY11.
RESEARCH: EDELWEISS
RATING: BUY
CMP: Rs 68
Edelweiss maintains ‘Buy’ rating on Usha Martin, but downgrades the relative rating to ‘Sector Performer’ from ‘Sector Outperformer’. They cut their fair valuation from 125/share to 91/share. Usha Martin’s 30-MW captive power plant is shut down since last month due to a breakdown in the turbine.
Management expects to restart operations post repairs in the next seven days. However, since the company failed to procure adequate power from a local power plant in the interim, Q3FY11 production could be hit. Edelweiss, however, cuts the volume estimates from 547 kt to 519 kt for FY11 and from 750 kt to 700 kt for FY12.
Thermal coal supply from UML’s captive mines has been affected since the Jharkhand government has allowed loading of only 15t per truck against 30t earlier. Hence, there is an increased requirement of trucks, which is not fully met. As a result, captive coal availability is expected to reduce from 120kt in Q2FY11 to 70-80kt in Q3FY11.
ADVERTISEMENT
Disclaimer: Investor’s Guide does not accept responsibility for consequences of financial decisions taken by readers on the basis of information provided herein. The aim is to provide a reasonably accurate picture of financial and related opportunities based on information available with us. The Times of India Group has invested in several companies; a list of the names of some of the investee companies can be viewed at http://www.privatetreaties.com Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
