TATA SPONGE IRON LTD - Quantamental Equity Research Report

	Quantamental Equity Research on TATA SPONGE IRON LTD | Release: 15 Jan 2019 23:09:37 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:TATASPONGE and BSE CODE:513010
	Last Close:	INR 783.85
	Fair Value:	INR 1241.8
	Est. Price by Mar 19:	INR 1097.25
	Market Capitalization (INR Crs):	1207.13
	Industry:	Iron & Steel/Interm.Products
	Rating:	STRONG BUY
	Upside:	58%
	Company Profile
	TATA METALIKS LTD - Quantamental Equity Research Report
	Growth Per Share
	Particulars	1-Year	3-Year	5-Year
	Revenue %	44%	25%	49%
	EBIT %	148%	51%	60%
	Earnings %	140%	53%	65%
	Book Value %	14%	24%	54%
	Stock Total Return %	34%	44%	267%
	Share holding pattern
	Particulars	%age
	(A) Promoter & Promoter Group	54.50
	(B) FII/FPI	4.86
	(C) DII/Insurance Companies	2.37
	(D) Public holding < 2 lakhs of cap.	27.82
	(E) Others	10.45
	Grand Total	100.00
	Fundamentals (Historical and Estimated)
	Particulars	Mar-10	Mar-11	Mar-12	Mar-13	Mar-14	Mar-15	Mar-16	Mar-17	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Price				292	504	747	520	800	1073	1097	1382	1645	1845	1942
	Return on Equity	0%	0%	0%	13%	14%	12%	4%	7%	14%	13%	15%	15%	15%	14%
	Price to Earning				5.3	7.7	12.5	25.0	21.0	11.7	11.7	11.7	11.7	11.7	11.7
	EVTI				0.4	0.7	1.1	0.8	1.6	1.7	1.5	1.6	1.6	1.6	1.5
	EVTIFM				5.3	7.7	12.5	25.0	21.0	11.7	11.7	11.7	11.7	11.7	11.7
	Price to Book Value				0.7	1.1	1.4	1.0	1.4	1.7	1.5	1.7	1.8	1.8	1.7
	Debt to Equity	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.1	0.2	0.2	0.2	0.1
	Dividend Yield				3%	2%	1%	2%	1%	2%	2%	2%	2%	2%	2%
	Cash Flow to Firm	#DIV/0!	#DIV/0!	#DIV/0!	-119%	26%	7%	19%	2%	1%	-3%	0%	3%	6%	11%
	Detailed Estimates
	Title	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Sales	800.17	1,060.79	1,333.18	1,583.62	1,771.95	1,860.55
	EBITDA	225.76	234.53	294.75	350.12	391.76	411.35
	EBIT	213.46	218.22	274.85	327.21	366.96	386.21
	PBT	210.21	218.22	274.85	327.21	366.96	386.21
	NPAT	140.88	144.05	181.43	215.99	242.23	254.93
	Price to Earning	11.73	11.73	11.73	11.73	11.73	11.73
	Price to Book Value	1.67	1.54	1.73	1.82	1.80	1.69
	Debt to Equity	-	0.12	0.19	0.21	0.17	0.06
	Return on Equity	0.14	0.13	0.15	0.15	0.15	0.14
	Enterprise Value to Total Income (EVTI)	1.72	1.47	1.56	1.59	1.57	1.50
	Enterprise Value to Total Income to Firm Margin(EVTIFM)	14.52	16.20	17.19	17.50	17.25	16.40
	Price or Est. Share Prices	1,072.81	1,097.25	1,382.00	1,645.30	1,845.20	1,942.00
	DISCOUNTED CASH FLOW
	Title	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	PBT	218.22	274.85	327.21	366.96	386.21
	Interest	-	-	-	-	-
	Depreciation	16.31	19.90	22.91	24.80	25.14
	Cash Flow Before Tax	234.53	294.75	350.12	391.76	411.35
	Tax Rate	33.99	33.99	33.99	33.99	33.99
	Cash Flow After Tax	154.81	194.57	231.12	258.60	271.53
	Terminal Cash Flow	-				2,804.31
	Total Cash Flow	154.81	194.57	231.12	258.60	3,075.84
Present Value of Cash Flow					2,025.56
Debt					113.26
Value of Equity					1,912.30
Fair Value Per Share					1,241.80
Equity					1,207
Debt					0
Beta	Take from Reuters				1.2
Risk Free Rate	Prevailing Yield in India				7%
Market Risk Premium	Assuming 8.82% premium for Equity Investments				7%
Interest Paid					3
Tax Benefit					1
Interest Net of Tax					2
Debt					0
Cost of Debt					0%
Cost of Equity					16%
Debt Weight					0%
Equity Weight					100%
WACC					16%
Cash Flow of Mar-23 E					271.53
Growth					4.0%
Present Value of Terminal Cashflow					2,804.31
Peer Comparision
#	Name	CMP Rs.	Mar Cap Rs.Cr.	B.V. Rs.	Annualized ROE %	ROCE %	Latest EVTI	Latest EVTIFM	CMP / BV	P/E	Debt / Eq	Div Yld %	Growth Rate R %	SGR %	Ann Total Income	Unpledged Prom Hold %	PQEIOI	QoQ Sales %	Qtr Sales Var %	QoQ Profits %	Qtr Profit Var %	Graham's Number Rs.
1	Tata Sponge Iron	783.85	1,207	669.96	13.24	23.06	0.53	11.30	1.17	8.23	-	2.55	10.35	17.42	1,107	54.50	111	20.64	21.62	-2.97	-25.53	1,198.31
2	Gallantt Ispat	36.20	1,022	18.26	36.34	12.40	1.15	9.10	1.98	10.07	0.53	0.14	35.39	34.49	1,053	63.09	33	-15.34	175.38	-22.20	230.79	38.88
3	Jindal Steel	146.90	14,219	311.89	5.87	3.47	1.38	14.33	0.47	161.89	1.41	-	5.87	4.15	40,954	29.21	163	3.28	63.02	90.05	146.23	-
4	Lloyds Metals	13.54	301	4.28	3.72	26.44	0.78	111.86	3.16	13.38	0.35	-	3.72	0.97	412	50.42	-253	-24.72	32.62	-93.18	288.89	9.86
5	Suraj Products	30.50	35	33.54	27.89	10.05	0.70	8.61	0.91	4.49	1.51	-	27.89	25.66	119	73.70	20	-5.16	119.17	-27.06	745.45	71.64
6	Vaswani Inds.	11.70	35	29.55	19.62	8.56	0.27	2.08	0.40	4.63	0.55	-	19.62	19.95	295	58.33	11	2.37	58.43	264.04	1,017.24	40.77