CMP Rs1,431, Target Rs1,463, Upside 2.2%
± Total volumes for Q1 FY12 jumped by 17.7% yoy, led by 31.9% yoy surge in export volumes
± Blended
realizations rose 4.4% yoy driven by price hikes implemented over the
past few quarters; however sequential fall in domestic market
realizations was disappointing
± OPM at 19.1% was lowest in 9 quarters; OPM fell 91bps yoy and 145bps sequentially
± Net Profit jumped 20.5% yoy to Rs7,111mn lower than our expectation of Rs7,509mn
± Uncertainty
over continuity of DEPB benefits will keep the stock under pressure
over the medium term. If the scheme is not extended EPS for FY12E and
FY13E would be cut by 6% and 12% respectively
± We maintain our Market Performer rating on the stock with a revised 9-month price target of Rs1,463
