Godawari Power & Ispat (GPIL) Q4 10/11 earnings summary

Executive summary

• FY11 rebounded as iron ore mining and pellet operations ramped up, captive inputs improved cost position, and production shifted toward steel as merchant power tariffs weakened.

• Consolidated net profit rose to ₹99.45 crore from ₹56.03 crore; merger-driven scope changes mean FY11 and FY10 are not strictly comparable.

Financial highlights

• Consolidated net sales were ₹1,116.05 crore vs ₹822.38 crore; gross turnover was ₹1,232.06 crore vs ₹886.80 crore, with reported topline growth of 36%.

• Consolidated EBITDA was ₹247.79 crore vs ₹134.51 crore; PBT ₹119.27 crore vs ₹66.65 crore; PAT ₹99.45 crore vs ₹56.03 crore.

• Consolidated EPS was ₹27.04 vs ₹21.25; proposed dividend was ₹2.50 per share, subject to shareholder approval.

Outlook and guidance

• Management targeted four-fold growth in gross sales with significantly higher margins by 2014; the stated target was marked TBD.

• A new 1.2 mtpa pellet plant in Chhattisgarh, estimated at ₹350 crore, was expected to become operational within two years.

• The 50 MW solar thermal project, estimated at ₹800 crore, was planned for commissioning by May 2013; project financing was structured at 70:30 debt-to-equity.

• Once Boria Tibu mine operates, output from both iron ore mines was expected to reach 1.2 million tonnes and meet captive iron ore needs; the coal block still awaited clearances.

• A 20 MW biomass plant began commercial operations in October 2010; total power generation volume was expected to rise 30% over the next two years.