Returns : 44.9%.. Buy Sesa Goa Ltd

Edelweiss Securities Limited, India Infoline have given buy rating to Sesa Goa Ltd.
Sesa Goa Ltd
CMP on July 24, 2008 : (Rs) 3,302
Target price (Rs): 4,785 === Upside (%): 44.9
52 Week h/l (Rs): 4,400/1,686



Shareholding pattern:
Promoters - 51.2%
FIIs & institutions - 31.0%

   Jump in sales volume and realisation boost topline by 147.3% yoy to Rs12.8bn
Iron ore production jumps 58% yoy to 4.6mn tons, the highest in Q1 in any year. BUY Sesa Goa Ltd with a target price of Rs4,785.

Result:
Period to........................06/08.........................06/07……………......yoy growth
(Rs mn)................................................................................................(%)
Net sales.......................12,800……….............5,177..........................147.3
PAT................................6,361…………….......1,332..........................377.7

Sesa Goa Ltd (Q1 FY09) results:
Sesa Goa reported strong Q1 FY09 results, with a topline growth of 147.3% yoy to Rs12.8bn. The growth in revenue was mainly driven by a surge in iron ore realisations and iron ore sales volume.

The company recorded the highest ever first quarter sales. The jump in Production during the quarter was a surprise for the markets.

China continued to be the company’s highest contributor in sales volumes. Sales to China jumped to 70% of total sales from last year’s 52%.

OPM jumped on soaring iron ore realisations


Outlook:
Sesa Goa, a Vedanta group company, is India's largest private-sector player in the iron ore 
segment. Over the last one year, iron ore spot prices have surged on the back of strong demand 
from Chinese steelmakers.

Sesa Goa would report healthy earnings CAGR of 22.7% during FY08 - 10E.

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