Metal & Mining

Metals & Mining
November 11, 2009

KSL – Sector Update
Poised for Muscular Growth
Giriraj Daga
Tel No.: +91 22 4076 7332
Email: giriraj@kslindia.com
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This report is intellectual property of Khandwala Securities Ltd; queries on this report may be directed to Head of Research at research@kslindia.com
Khandwala Securities Limited
T ABLE OF C ONTENT
Sl No Descriptions Pg No
1. Key Highlights 3
2. Industry Overview 3
3. Financial Summary 5
4. Steel Prices 6
5. Raw Material Prices 8
6. Production Data 9
7. Non-Ferrous Metal Prices 12
8. Other Parameters 13
9. Quarter at a Glance 14
10. Industry Aggregate Financials 16
11. Sector Analysis for 2QFY10 17
12. Net Sales Growth 21
13. EBITDA Growth 21
14. PAT Growth 22
15. EBITDA Margins 22
16. PAT Margins 23
17. Companies’ 2QFY10 Result Update 24
ArcelorMittal USA Inc. 25
Hindalco Industries Limited 28
Hindustan Zinc Limited 36
JSW Steels Limited 40
National Aluminium Company Limited 47
Sesa Goa Limited 51
Steel Authority of India Limited 56
Sterlite Industries Limited 60
Tata Steel Limited 65
18. Financial Highlights 71
19. Disclaimer 74
KSL – Metals & Mining Sector Update 2

November 11, 2009
Key Highlights
Gradual improvement in steel production across the globe

Demand stable in domestic market
Global steel prices subdued last month
Domestic steel prices lowered in current month
Non-ferrous metal prices stable
China continues to throw positive surprises
Valuation (Top Pick: Tata Steel, JSW Steel & Sterlite Industries)
Industry Overview As mentioned in our previous sector update ‘Off the Crisis, Geared to
Takeoff’, the 2QFY10 proved to be steady compared to 1QFY10. Although,
YoY quarterly performance looks dismal considering metal prices were at all
time high during 2QFY09, the sector has shown substantial improvement
from sequential quarter on back of improving realization and moderate cost
environment. The global scenario now looks much more convincing than
previous in the quarter and companies, like ArcelorMittal, are witnessing
steady improvement in capacity utilization, which is likely to extend during
this quarter. Indian metal sector is likely to achieve stable demand
environment; however, the financials from YoY perspective would be very
strong on account of very low base in 3QFY09 due to complete collapse of
global economic growth.
Gradual improvement in steel The steel industry is witnessing steady improvement in production across
production across the globe the globe and global production touched the highest mark of 107 MT during
past 12 months in the month of Sep’08. A very large portion of this growth
was driven by China, which now produces ~ 48% of global steel compared
to ~ 36% in the month of Sep’08. Apart from this, the developed countries
have also shown steady improvement in the last couple of months on back of
easing recessionary pressures and re-stocking. Steel production in the month
of Sep’09 jumped 44%, 36% and 27% from Mar’09 level in Japan, US and
Europe respectively. We believe, the de-stocking exercise is by and large
over and industry would be looking at follow on consumer demand for
further expansion in steel production.
Demand stable in domestic The Indian steel demand has remained on uptrend albeit at a lower pace,
market while non-ferrous metal demand has witnessed robust growth on back of
strong energy and infrastructure demand. The flat steel demand has
remained robust on back of strong auto sector demand, however, long steel
demand has remained subdued on back of lower construction demand due
to seasonality. We believe that flat steel demand would remain stable going
forward, while long segment is likely to perceive improvement in demand
from higher construction and infrastructure demand.

November 11, 2009
Global steel prices have weaken Global steel prices across the globe have witnessed weakness following the
in last month lower prices in China to the tune of 20% from last quarter high level.
Countries like US and Europe has seen ~ 10% correction from the quarter
high. In Sep’09, the steel companies have booked their quarterly order for
Dec’09 quarter at 3-5% higher rate, however, their order booking for Mar’10
quarter is happening at lower levels. Chinese steel prices have shown steady
uptick in last couple of days, which should enable companies to sustain price
line going forward.
Domestic steel prices lowered in The Indian steel producers have recently cut the prices by Rs 1,500/tonne
current month following the weakness in global prices. This decline can largely be
attributed correction in Chinese steel prices and modest appreciation in
Indian currency. We believe steel prices would remain stable for rest of the
quarter and beginning of the next quarter and likely to witness upturn from
end of current fiscal year.
Non-ferrous metal prices stable The non-ferrous metal prices have remained stable in last couple of months
with moderate volatility. The prices have remained strong despite sustain
rise in LME inventory levels. We believe strong economic numbers in US on
back of gradual improvement and low base effect should ignite the talk of
exit strategy. This is likely to result in rebound in US currency, which would
lead to weakness in commodities.
Positive surprises continue in The major driver of metal sector, China, has witnessed very constructive
‘China’ improvement during last quarter. The Chinese economy showed robust
growth of 8.9% during 3QCY09 on back of massive spending under
government stimuli, marginally better than many economist expectations.
The country produced over 150 MT during last quarter and exports in low
territory suggest strong apparent consumption. The countries continue to
import large quantity of iron ore, which touched 65 MT in the month of
September, 65% jump from Sep’08 levels. The imports jumped 48% YoY to
172 MT during the quarter, which coupled with stable inventory at 70 MT
suggest the full consumption of import quantity.
Valuation The metal sector has outperformed the benchmark indices with a very wide
margin of 124% from low levels, however, this was largely driven by
underperformance in the preceding one year. The recent weakness in the
market has resulted in metal stocks shedding 15%-20% from their high,
which bring them to attractive levels. On a broader basis, we remain
overweight on metal sector because we believe these companies would be
able to benefit from higher volume with stable prices and cost. Although,
metal stocks may remain subdued in the short term on account of dollar
rebound, we believe, this downturn should be used to build position in
strong stocks.
In ferrous metal Tata Steel continue to remain our top pick in view of stable
prices and strong cost cutting measure likely to surprise on Corus EBITDA
due to high sensitivity. Our second bet in ferrous metal zeroed at JSW Steel,
which is likely to achieve very strong volume growth on back of massive
expansion with stable to upward EBITDA/tonne. In the non-ferrous metal,
Sterlite Industries continue to remain our top pick on back of strong balance
sheet, massive expansion in metal as well as power segment and integrated
operation. Although, we continue to remain positive on Sesa Goa in mining
sector, we would prefer some correction before entering in the stock.
November 11, 2009
Financial Summary
Company Net Sales EBITDA PAT
(INR Mn) FY09 FY10E FY11E FY09 FY10E FY11E FY09 FY10E FY11E
Hindalco Industries 654,146 612,859 629,362 25,865 78,309 80,526 5,270 33,995 33,753
Hind Zinc 56,803 71,833 83,341 28,760 39,905 45,488 27,276 36,155 42,058
JSW Steel 160,277 194,783 243,726 32,491 45,809 63,795 2,749 16,323 25,889
NALCO 50,940 45,270 53,640 17,896 7,677 16,883 12,723 6,458 12,332
Sesa Goa 49,591 50,212 70,475 25,421 21,060 32,365 19,881 18,803 29,117
SAIL 442,084 419,262 471,170 90,235 106,529 131,166 61,748 72,868 85,892
Sterlite Industries 211,455 228,211 281,902 51,182 54,525 78,727 35,400 38,085 53,055
Tata Steel 1,455,526 1,029,900 1,167,882 184,756 92,071 171,618 46,475 6,056 73,294
Company EPS (INR) P/E (x) EV/EBITDA (x) CMP Target Reco.
FY09 FY10E FY11E FY09 FY10E FY11E FY09 FY10E FY11E (INR)
Hindalco Ind 3.1 20.0 19.8 41.0 6.4 6.4 18.4 6.2 5.7 127 133 ADD
Hind Zinc 64.6 85.6 99.5 14.4 10.9 9.3 10.3 6.9 5.4 930 939 ADD
JSW Steel 14.7 87.3 138.4 57.6 9.7 6.1 8.9 6.1 4.8 847 1,007 BUY
NALCO 19.7 10.0 19.1 19.2 37.8 19.8 11.5 26.6 11.5 379 235 SELL
Sesa Goa 25.3 22.9 35.5 13.1 14.4 9.3 9.0 11.1 6.6 330 298 REDU
SAIL 14.9 17.6 20.8 11.8 10.0 8.5 6.9 6.1 5.3 176 200 ADD
Sterlite Inds 50.0 45.8 63.8 16.1 17.6 12.6 9.7 10.5 6.9 806 886 ADD
Tata Steel 63.6 6.8 82.6 7.9 74.0 6.1 4.4 9.8 5.0 505 605 BUY

November 11, 2009
Steel Prices
Global HRC Prices Global Long Prices
Global HRC price have shown steady up-move from Global long steel price recovery has been quieter
low levels, however, it remained subdued in last couple compared to HRC due to delay in construction and
of weeks mainly due to weakness in Chinese steel infrastructure rebound, which enabled the recent
prices. correction to be more muted that HRC.
1,200 (USD/Tonne) 1,150 (USD/Tonne)
950
900
700
650
450
200 400
Jan-06 Dec-07 Nov-09 Jan-06 Dec-07 Nov-09
Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg
India Flat Prices India Long Prices
Flat steel prices remained have more or less picturing Long steel prices have been relatively weaker and hit a
global HRC and last couple of weeks have observed fresh low in the month of October, however, we
weakness partially on account of currency appreciation anticipate pick up in construction demand in second
also. half from construction and infrastructure sector.
52,000(INR/Tonne) 44,000 (INR/Tonne)
40,000 34,000
28,000 24,000
16,000 14,000
Jul-05 Sep-07 Nov-09 Jan-06 Dec-07 Nov-09

November 11, 2009
US HRC Prices China HRC Prices
US HRC prices have also more or less mirrored global Chinese HRC prices after outperforming in the second
prices and currently prices are trading at near FY2008 half of FY2009 has remained underperformer in the
levels. first half of current year particularly during 2QFY10.
1,200 (USD/Tonne) 900 (USD/Tonne)
800 700
400 500
0 300
North Europe HRC South Europe HRC
Northern Europe prices have also been on the same Southern Europe prices have been stickier compared to
trend compared to other region, while these are other region and registered most of the gains during
trading below FY2007 levels also. 2QFY10.
1,300(USD/Tonne) 1,425 (USD/Tonne)
950 1,050
600 675
250 300

November 11, 2009
Raw Material Prices
Iron Ore Prices China Coke Prices
Iron ore prices have seen very sharp volatility in last Chinese coke prices have been quiet in last couple of
quarter with strong surge and correction within couple weeks after initial recovery post correction, however,
of weeks; however China imports continue to grow at prices are still way above FY2007 levels.
robust pace.
235 (USD/Tonne) 475 (USD/Tonne)
165 350
95 225
25 100
Jan-06 Dec-07 Nov-09 Jul-06 Mar-08 Nov-09
China Scrap Prices US Coal Prices
China scrap prices have seen strong rebound from Coal prices have not seen much recovery and
lows, while there prices are currently trading above approximately trading in normal band for last six
FY2007 levels. months.
650 (USD/Tonne) 225 (USD/Tonne)
500 150
350 75
200 0

November 11, 2009
Steel Production Data
Global Steel Production India Steel Production
Global steel production has seen steady improvement India steel production has been in the similar range for
from lows. The initial recovery was driven by China, over last two years. Indian producer have remain
while last quarter growth was more driven by unaffected from global downturn, while growth would
developed countries like US, Europe and Japan. take couple of more months to flow-in.
120 (MT) 5 (MT)
100 4
80 3
60 2
Jan-04 Nov-06 Sep-09 Jan-04 Nov-06 Sep-09
China Steel Production US Steel Production
China becomes the first country to cross the previous US production showed sharp jump in the last quarter
high in steel production on back of strong demand led production numbers due to rebound in demand again
by government stimulus, however, the production is led by government stimulus, which should further
likely to stabilize at current levels in futures. improve the utilization going forward.
52 (MT) 9 (MT)
44
7
36
28
5
20
12 3

November 11, 2009
Europe Steel Production Japan Steel Production
European region witnessed very sharp jump in steel Japan steel production after registering sharp rebound
production in the month of September and this is in last quarter, is expected to witness stable to upward
expected to improve gradually from hereon. bias in utilization ratios.
20 (MT) 11 (MT)
16 9
12 7
8 5
China Steel Export China Coke Export
Although, Chinese exports are strengthing gradually, it China has imposed 40% tax on coke export, which
is still below the levels witnessed during FY2008, resulted in coke exports falling from 8.11 MT during
implying the stronger domestic consumption. 1HFY09 to 0.2 MT during 1HFY10.
8.0 (MT) 2.4 (MT)
6.0 1.8
4.0 1.2
2.0 0.6
0.0 0.0

November 11, 2009
China Iron Ore Inventory China Total Iron Ore Imports
China Iron ore inventory has seen marginal decline China’s quench for iron ore seems unsatisfiable and the
after touching all time high level, nevertheless, it is country continue to import very large amount of ore to
nearly one month of consumption. feed its burgeoning steel production.
80 (MT) 65 (MT)
70 52
60 39
50 26
40 13
30 0
Jan-07 Jun-08 Nov-09 Jan-04 Nov-06 Sep-09
Source: Khandwala Research; Bloomberg Source: Khandwala Research; Bloomberg
Indian Iron Ore Export to China China Imports market share
The Indian iron ore export to China has not been able India, despite being closer proximity to china, has not
to pick up relative to overall imports from China, been able to improve its market share due to policy
though last months witnessed strong jump in exports. hurdles and higher production in other countries.
14 (MT) India Brazil Australia S Africa Others

100%
11 80%
60%
8
40%
5
20%
2 0%
Jan-04 Nov-06 Sep-09 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09

November 11, 2009
Non-Ferrous Metal Prices
LME Copper Price and Inventory LME Aluminium Price and Inventory
Copper price has seen strong recovery accompanied Aluminium prices have also improved substantially on
with stable inventory levels. This apart, Tc/Rc margin account of steady improvement in auto sector and
has gained strong in CY’09, which would help the initial uptick in hosing sector despite continues high
smelting industry. inventory levels.
LME Copper Inventory LME Copper Price LME Alum Inventory LME Alum Price
6.0 (Lac/Tonne) (USD/Tonne) 9,200 48 (Lac Tonne) (USD/Tonne) 3,600
4.5 7,400 36 2,950
3.0 5,600 24 2,300
1.5 3,800 12 1,650
0.0 2,000 0 1,000

Aug-06 Mar-08 Nov-09 Aug-06 Mar-08 Nov-09
LME Zinc Price and Inventory LME Lead Price and Inventory
LME zinc prices have shown steady improvement LME Lead prices have also seen sharp uptick in last six
during last six months on account of weakness in USD, months, despite steady increase in inventory levels,
however, inventory has also moved up during this however, inventory still remains low compare to other
period. metal.
LME Zinc Inventory LME Zinc Price LME Lead Inventory LME Lead Price
4.7 (Lac Tonne) (USD/Tonne) 4,800 1.3 (Lac Tonne) (USD/Tonne) 4,400
3,600 1.0 3,300

3.3
2,400 0.7 2,200
1.9
1,200 0.4 1,100
0.5 0 0.1 0
Aug-06 Mar-08 Nov-09 Aug-06 Mar-08 Nov-09

November 11, 2009
Other Parameters
Baltic Dry Index USD/INR
Baltic Dry Index is showing gradual improvement with INR has remained very volatile in last couple of weeks,
informal relation with iron ore prices due to high however, We expect currency to appreciate gradually
dependability. due to better economic prospects.
12,000 38 (USD/INR)
9,600 41
7,200 44
4,800 47
2,400 50
0 53
LIBOR – 1 Year
The loose monetary policy across the globe resulted in

LIBOR trading at multi year lows, which should result
in revival in the economy coupled with lower interest
cost.
6.5 (%)
4.5
2.5
0.5
Jan-06 Dec-07 Nov-09
Source: Khandwala Research, Bloomberg

November 11, 2009
Quarter at a Glance
Massive plunge in realization The sector volume growth broadly remained positive, however massive
led to Revenue drop plunge in realization to the tune of 20-50% led to 14% YoY drop in revenue
to Rs 629 bn. Nevertheless, steady improvement in realization coupled with
higher volume enabled 10% QoQ jump in net revenue. The closer analysis
suggests that large companies have gained volume at the cost of small and
medium players in the ferrous metal segment due to higher production from
players like Tata Steel and JSW Steel.
The tubes/pipes and zinc were the only segment to report positive growth,
though very muted, on account of execution of previous order and positive
zinc prices respectively. Ferro alloy and medium steel segment witnessed the
largest cut of over one fourth due to over 50% plunge in ferro prices and
lower volume and realization in steel segment respectively. Sequentially,
strong strength in non-ferrous metal and ferro alloy prices enabled copper,
aluminium, zinc and ferro alloy segment to post strong QoQ revenue growth
in the range of 18-30%. The mining sector, usually affected by monsoon
sector in term of lower volume witnessed the biggest QoQ decline in net
revenue, while lower sponge iron prices resulted in sponge iron revenue
growth turning negative, however, no sector witnessed over 10% cut in net
revenue during the quarter.
EBITDA down on lower Lower realization were partially offset with lower raw material cost and led
realization, but steady from last to 176 bps shrinkage in EBITDA margin to 23% compared to 552 bps
three quarters shrinkage witnessed during 1QFY10. The above factors led to 20% drop in
EBITDA to Rs 145 bn, however, the declining rate remained lowest in last
four quarter, while EBITDA remained highest in the same period.
Sequentially, the sector has been able to improve the EBITDA margin by 33
bps during the quarter, which facilitated 11% QoQ surge in EBITDA.
The segmental picture remains very much similar, what was witnessed in
revenue section. The tubes/pipes and zinc segments were able to report
positive growth of 47% and 10% YoY respectively due to above mentioned
reasons. On the downside, ferro alloy segment was massively brunt with
69% YoY drop in EBITDA, while aluminium was the other segment to record
over 50% decline in EBITDA. Medium steel segment, mining and copper
segment also reported over a quarter cut in EBITDA from last year
corresponding quarter.
Sequentially, ferro alloy EBITDA jumped over 3.5 times due to high price
sensitivity, while pig iron segment witnessed 76% jump due to lower coking
coal prices and stable realization. Zinc, copper and large steel were the other
segment to record over 25% QoQ growth in EBITDA. Mining and medium
steel segment reported over 15% decline in EBITDA, while aluminium
segment also reported 17% QoQ decline due to extraordinary items during
1QFY10 in Hindalco’s Financials.

November 11, 2009
PAT down but improvement is The performance remained vary much similar to what was witnessed in
on the cards EBITDA section. The sector reported 28% YoY decline (declining rate
remained lowest in last four quarters) in adjusted profit after tax to Rs 85 bn
(highest in last four quarters). The PAT margin shaved off 272 bps on
account of stable interest cost and 12% jump in depreciation. Sequentially,
the sector was able to expand PAT margin by 28 bps, which permitted 11%
QoQ jump in adjusted PAT.
The tubes/pipes segment reported over 50% in profitability, while pig iron
was the other segment to report minor profit growth due to lower coking
coal prices. As stated, ferro alloy took the largest brunt at PAT level also
with 78% YoY drop, while medium steel and aluminium were the other
segments to witness over 50% cut in Adjusted PAT. Sequentially, ferro alloy
and pig iron segments observed astonishing turnaround as ferro alloy
reported profit of Rs 525 mn compared to loss of Rs 20 mn, while pig iron
PAT jumped 17 times due to meager base. Copper, zinc and large steel
segments were able to post healthy growth in the PAT to the tune of 29-36%
QoQ.
Other income and interest cost The other income remained marginally up 2% YoY at Rs 20 bn, while interest
stable; depreciation up steadily cost remained marginally down 3% at Rs 21 bn due to lower LIBOR rate and
de-leveraging. Depreciation was up 12% YoY to Rs 26 bn on account of
commissioning of new capacities. Sequentially, other income was down 13%
QoQ, while interest cost and depreciation was up 1% and 3% during the
same period.
Outlook for next quarters As accepted in ‘Quarterly Preview’ report, we reiterate that last quarter
decline was the end of negative trend and we are expected to see sparkles
from current quarters results. However, majority of this growth is likely to
come from low base effect rather than much actual improvement from
sequential quarter. a closer analysis of current quarter performance with
3QFY09 suggest that just maintaining current situation, the sector is
anticipated to grow 15% at Net Sales levels, while EBITDA and PAT would
swell by 102% and 92% respectively. We also believe that growth
momentum expected from next quarter is likely to continue for next couple
of quarter thanks to base effect and steady improvement in volume.

November 11, 2009
Industry 2QFY10 Aggregate Financials

Description Net Sales EBITDA Adjusted PAT
(INR Mn) (INR Mn) % YoY % QoQ (INR Mn) % YoY % QoQ (INR Mn) % YoY % QoQ
Aluminium 64,538 -14.9 25.6 8,127 -52.9 -16.9 5,335 -55.5 -15.3
Copper 66,135 -10.7 29.2 13,772 -26.4 33.0 13,685 -21.8 36.4
Ferro Alloys 7,835 -33.1 18.6 1,179 -69.0 271.3 525 -78.4 -2,671.6
Mining / Minerals 30,204 -18.1 -8.2 13,948 -27.5 -16.4 10,250 -28.9 -22.9
Others 9,011 -22.8 3.3 1,280 -12.7 4.9 700 -28.5 18.4
Steel - Large 324,311 -13.7 9.7 71,093 -16.2 25.3 33,048 -32.3 28.9
Steel - Medium / Small 32,272 -25.3 -1.3 3,586 -30.9 -1.3 1,082 -56.2 -13.7
Steel - Pig Iron 6,954 -23.2 6.3 970 -11.4 76.1 410 4.8 1,602.1
Steel - Sponge Iron 39,620 -10.7 -5.3 15,288 -4.7 -15.8 9,033 -4.3 -15.6
Tubes / Pipes 29,766 3.3 -0.3 4,846 46.5 1.5 2,544 56.0 13.1
Zinc 18,183 1.6 19.1 10,755 9.5 37.5 9,350 -2.6 30.1
Total 628,828 -13.8 9.8 144,843 -19.9 11.4 85,960 -28.1 11.3
Description EBITDA Margin PAT Margin

(INR Mn) (%) % YoY % QoQ (%) % YoY % QoQ
Aluminium 12.6 -10.2 -6.4 8.0 -7.3 -3.8
Copper 20.8 -4.5 0.6 19.3 -3.1 1.3
Ferro Alloys 15.0 -17.5 10.2 6.6 -14.0 6.9
Mining / Minerals 46.2 -6.0 -4.5 31.0 -5.1 -5.6
Others 14.2 1.6 0.2 7.5 -0.8 0.8
Steel - Large 21.9 -0.7 2.7 10.0 -2.8 1.6
Steel - Medium / Small 11.1 -0.9 0.0 3.3 -2.4 -0.5
Steel - Pig Iron 13.9 1.9 5.5 5.9 1.6 5.5
Steel - Sponge Iron 38.6 2.4 -4.8 22.5 1.3 -2.8
Tubes / Pipes 16.3 4.8 0.3 8.5 2.9 1.0
Zinc 59.1 4.3 7.9 47.4 -1.3 5.3
Total 23.0 -1.8 0.3 13.3 -2.7 0.3
Source: Khandwala Research, Capitaline

November 11, 2009
Sector Analysis: 2QFY10
Net Sales Growth Contribution Net Sales Contribution
Tubes/pipes segment led the sales growth followed by Tubes/pipes and zinc segment added the most in
zinc segment. However, ferro alloy followed by revenue basket, while large steel companies followed
medium steel and pig iron segment remained sluggish by non-ferrous companies and medium steel
on back of massive decline in realization. companies robbed the maximum from revenue kitty.
7 (%) 4 (INR Bn)
0
0
-7
-4
-14
-8
-21
-12
-28
-35 -16 -52
Copper
Med/Small
Alumi
Zinc
Pig Iron
Spg Iron
Stl-Large
Tubes/Pipes
Others
Ferro Alloys
Min'g/Mine'ls
Copper
Alumi
Med/Small
Zinc
Spg Iron
Stl-Large
Pig Iron
Tubes/Pipes
Min'g/Mine'ls
Others
Ferro Alloys
Source: Khandwala Research, Capitaline Source: Khandwala Research, Capitaline
EBITDA Growth Contribution EBITDA Contribution
EBITDA growth was headed by same tubes/pipes and Tubes/pipes and zinc segment contributed the most in
zinc segment, while ferro alloy followed by aluminium EBITDA, while ferro alloy despite small in size shaved
and medium steel segment recorded the maximum off the largest chunk from PAT followed by large steel
decline in EBITDA. segment.
25 (%) 46.5% 3 (INR Bn)
0
0
-3
-25
-6
-50
-9
-14
-75 -12 -15
Copper
Med/Small
Alumi
Zinc
Spg Iron
Pig Iron
Stl - Large
Tubes/Pipes
Others
Min'g/Mine'ls
Ferro Alloys
Med/Small
Copper
Alumi
Zinc
Pig Iron
Spg Iron
Stl - Large
Tubes/Pipes
Others
Min'g/Mine'ls
Ferro Alloys

November 11, 2009
Net Profit Growth Contribution Net Profit Contribution
Apart from tubes/pipes, pig iron was the other Large steel companies contributed most to the
segment to record positive growth, while losers reduction in absolute profit due to its sheer size,
remained the same as witnessed in EBITDA section. followed by mining and non-ferrous metal segment.
30 (%) 56.0% 3 (INR Bn)
0 0
-30 -3
-60 -6
-90 -9 -15.7
Copper
Alumi
Med/Small
Pig Iron
Zinc
Sponge Iron
Stl - Large
Tubes/Pipes
Others
Min'g/Mine'ls
Ferro Alloys
Med/Small
Copper
Alumi
Pig Iron
Zinc
Sponge Iron
Stl - Large
Tubes/Pipes
Others
Ferro Alloys
Min'g/Mine'ls
EBITDA Margin Contribution PAT Margin Contribution
Apart from tubes/pipes and zinc, sponge iron and pig Apart from ferro alloy, non-ferrous metal and mining
iron were the other segments to record expansion in were the other segments to record massive cut in PAT
EBITDA margin, while ferro alloy witnessed the margin.
largest shrinkage in above.
6 (%) 4 (%)
0 0
-6 -4
-12 17.5% -8 14.0%

Med/Small
Copper
Alumi
Pig Iron
Sponge Iron
Zinc
Stl-Large
Tubes/Pipes
Others
Min'g/Mine'ls
Ferro Alloys
Med/Small
Copper
Alumi
Zinc
Sponge Iron
Pig Iron
Stl-Large
Tubes/Pipes
Others
Min'g/Mine'ls
Ferro Alloys

November 11, 2009
Net Sales Sales Growth
Although, the revenue remained lower than Though, this quarter registered biggest drop in
corresponding quarter last year, it is the highest in last revenue, we believe, it would be the end of negative
four quarter implying gradual improvement. growth trajectory.
820(INR Bn) 50 (%)
640
25
460
0
280
100 -25
Jun-03 Jun-05 Jun-07 Jun-09 Jun-03 Jun-05 Jun-07 Jun-09
EBITDA & Margin EBITDA Growth
EBITDA and margin have seen substantial The EBITDA growth has soon constant improvement
improvement from 3QFY09 quarters, which should from last four quarter and it would surge strongly in
result in sparkles from next quarter. coming quarters.
EBITDA EBITDA Margin 100 (%)
200 (INR Bn) (%) 33
150 26
50
100 19
50 12
- 5 -50

November 11, 2009
PAT & Margin PAT Growth
The PAT has also mirrored the similar story with PAT growth will also turn positive with a sizeable
substantial improvement from lows. number due to very low base.
PAT PAT Margin 200 (%)
129 (INR Bn) (%) 20
453
337
98 15
100
67 10
36 5
-2,543
5 0 -100
Other Income & Profit contribution Interest Cost Growth & EBITDA/Interest
Other income for past couple of quarters has been Interest cost has been stable for the past one year after
stable with minor hiccups. vast increase in previous year. The improvement in
EBITDA has recovered the interest coverage ratio.
v
65 (INR Bn) Interest EBITDA/Interest

24 (INR Bn) (%) 20
49
18 15
33 12 10
16 6 5
- 0 0

November 11, 2009
Note: For the analysis perspective, sector has been filtered on the basis of net sales above INR 2,000 mn.
Net Sales Growth
Increase in Net Sales Decrease in Net Sales
Only handful of companies were able to post positive The decline was visible across all verticals like large
revenue growth, which include names like JSW Steel, steel, non-ferrous, mining and mid to small size
Hindustan Zinc, Welspun Gujarat and Jindal Stainless. companies.
Description 2QFY10 2QFY09 YoY Description 2QFY10 2QFY09 YoY

(INR Mn) Sept-09 Sept-08 % Chg (INR Mn) Sept-09 Sept-08 % Chg
JSL 13,300 10,949 21.5 Sesa Goa 5,387 8,757 -38.5
Welsp.Guj.Stahl 18,132 14,928 21.5 Ispat Inds. 20,480 32,232 -36.5
Lloyd Steel Inds 8,460 7,109 19.0 Mah. Seamless 4,103 6,022 -31.9
Surya Roshni 5,315 5,010 6.1 ISMT 2,869 4,081 -29.7
Jai Balaji Inds. 4,749 4,479 6.0 MUSCO 2,674 3,643 -26.6
Hind.Zinc 18,183 17,905 1.6 Natl. Aluminium 11,791 15,715 -25.0
JSW Steel 47,565 46,841 1.5 Natl. Steel& Agro 5,171 6,895 -25.0
Visa Steel 2,528 3,311 -23.7
Guj NRE Coke 3,834 4,961 -22.7
Monnet Ispat 3,140 3,997 -21.4
EBITDA Growth
Increase in EBIDTA Decrease in EBIDTA
EBITDA growth list was also headed by pipes and Non-ferrous and mining companies were major source
secondary steel segment companies. of the decline.

JSL 2,808 263 967.2 Lloyd Steel Inds 72 345 -79.2
Welsp.Guj.Stahl 2,935 1,569 87.0 Natl. Aluminium 1,417 6,759 -79.0
MUSCO 208 139 49.2 Sesa Goa 1,527 4,205 -63.7
Mukand 701 512 36.8 Guj NRE Coke 635 1,464 -56.6
Varun Inds. 389 295 31.7 Ispat Inds. 3,129 5,957 -47.5
Jindal Saw 2,551 1,995 27.8 Hindalco Inds. 6,092 9,934 -38.7
Mah. Seamless 1,074 886 21.2 Man Inds. 223 350 -36.3
Uttam Galva 1,044 869 20.1 Tata Steel 19,222 28,350 -32.2
Surya Roshni 263 223 18.0 Usha Martin 784 1,112 -29.5
JSW Steel 10,753 9,352 15.0 Sterlite Inds. 13,419 18,408 -27.1

November 11, 2009
PAT Growth
Increase in PAT Decrease in PAT
Apart from pipe & secondary steel producers, the list Tata Steel, Hindalco, NALCO and Sesa Goa were the
includes Jindal Steel & Power due to higher power most prominent names to register over 50% drop in
income. PAT.

Mukand 163 14 1,032.6 Visa Steel 87 441 -80.3
Varun Inds. 46 18 154.4 Guj NRE Coke 202 1,028 -80.3
Welsp.Guj.Stahl 1,402 653 114.7 Man Inds. 31 109 -71.1
Jindal Saw 1,464 1,001 46.3 Natl. Steel& Agro 23 74 -69.2
Sunflag Iron 177 127 39.8 Usha Martin 147 419 -65.0
Bhushan Steel 1,892 1,430 32.3 Natl. Aluminium 1,595 4,445 -64.1
Surya Roshni 48 37 31.3 Tata Steel 9,029 20,279 -55.5
Mah. Seamless 712 639 11.3 Hindalco Inds. 3,441 7,200 -52.2
Jindal Steel 8,084 7,623 6.0 Adhunik Metal 116 232 -50.3
Monnet Ispat 642 620 3.5 Sesa Goa 1,694 3,398 -50.1
EBITDA Margin Movement
Expansion in EBITDA Margin Contraction in EBITDA Margin
Pipe companies witnessed strong expansion in NALCO and Sesa Goa witnessed a massive erosion in
EBITDA margin due to execution of previous order margin due to steep fall in realization.
book.

JSL 21.1 2.4 18.7 Natl. Aluminium 12.0 43.0 -31.0
Mah. Seamless 26.2 14.7 11.5 Sesa Goa 28.3 48.0 -19.7
Jindal Steel 53.4 44.4 9.0 Guj NRE Coke 16.6 29.5 -12.9
Welsp.Guj.Stahl 16.2 10.5 5.7 Tata Steel 33.8 41.6 -7.8
Jindal Saw 18.6 13.4 5.2 Hindalco Inds. 12.4 17.5 -5.1
Mukand 13.4 8.6 4.8 Sterlite Inds. 21.9 27.0 -5.1
Monnet Ispat 30.7 26.0 4.7 Lloyd Steel Inds 0.8 4.9 -4.0
Bhushan Steel 26.4 22.0 4.4 Ispat Inds. 15.3 18.5 -3.2
Hind.Zinc 59.1 54.8 4.3 Usha Martin 16.1 18.6 -2.5
ISMT 17.0 12.7 4.3 Man Inds. 7.2 9.3 -2.1

November 11, 2009
PAT Margin Movement
Expansion in PAT Margin Contraction in PAT Margin
Secondary steel producers were able to expand margin Tata Steel, NALCO, Sesa Goa and Gujarat NRE Coke
due to lower cost. reported 10% shrinkage in PAT margin.

Mah. Seamless 17.1 10.3 6.8 Guj NRE Coke 5.2 20.6 -15.4
Jindal Steel 32.5 26.5 6.0 Natl. Aluminium 12.1 26.9 -14.8
Bhushan Steel 14.5 9.4 5.1 Tata Steel 15.7 28.7 -13.1
Monnet Ispat 19.7 15.4 4.3 Visa Steel 3.4 13.3 -9.9
Jindal Saw 10.7 6.7 3.9 Sesa Goa 27.0 36.9 -9.9
Welsp.Guj.Stahl 7.7 4.4 3.4 Hindalco Inds. 6.9 12.3 -5.4
Mukand 3.1 0.2 2.9 Manaksia 11.5 15.9 -4.4
Sunflag Iron 5.8 3.8 2.0 Usha Martin 3.0 7.0 -4.0
ISMT 6.1 4.9 1.2 Sterlite Inds. 20.4 24.0 -3.6
Varun Inds. 1.6 0.6 1.0 JSW Steel 6.6 9.0 -2.3

November 11, 2009
Companies’ 2QFY10 Result Update

November 11, 2009
ArcelorMittal USA Inc.

CMP: $ 35.56 52 Week Hi / Lo: $ 42.32 / 14.94
ArcelorMittal results for 3QCY09 are largely inline with market expectations. The company reported 29% YoY
decline in volumes to 18.2 MT, while it improved 7% QoQ. Lower volumes along with 35% drop in realization
led to 54% drop in net sales to $16.17 bn. EBITDA nosedived 81% YoY to $1.59 bn (middle range of $1.4–1.8 bn
guidance provided in 2QCY09) compared to $8.58 bn. Lower cost compared to previous sequential quarter
enabled company to report 30% jump in QoQ EBITDA. The company reported profit of $903 mn after losses for
three consecutive quarters, however YoY decline stand at 76% from last quarter.
Management View
The management indicates the first signs of recovery have been visible during this quarter as per anticipation. In
response to this increased demand, the company has now re-started a number of facilities, and expects fourth
quarter crude steel capacity utilization to be approximately 70%. The company also anticipates to see gradual
improvement through 2010 despite continuing challenges in operating environment.
Regional Analysis
American region has seen robust growth of 30% and 20% QoQ in production and shipment of flat steel. The
blended realization in the region has seen marginal dip of 1% from last sequential quarter. In addition, the
cost/tonne has witnessed 5% QoQ drop, which enabled company to post 58% jump in EBITDA/tonne to
$80/tonne.
In comparison, European market remain bit sluggish compared to American market. Although, the flat steel
production jumped 66% QoQ, shipment was just higher by 13%. The blended realization in the region has seen
sizeable decline of 5% from last sequential quarter. This coupled with marginal increase in total cost resulted in
54% plunge in EBITDA/tonne to $48/tonne.
The other segment like total long steel, Asia, Africa & CIS region (AACIS) and Stainless Segment has seen stable
growth during the quarter from 2QCY09. However, all three segments have seen over double digit jump in steel
realization from sequential quarter. Higher realization resulted in higher EBITDA/tonne except AACIS region,
where cost have also escalated during the quarter.
EBITDA Guidance
The company has guided EBITDA of $2.0 – 2.4 bn on the back of strong volumes and better average steel
realization despite surge in fixed cost due to higher capacity utilization.
Implication on Tata Steel
The results indicate that this quarter is expected to be quiet for Corus considering lower realization in flat steel
segment, while marginal improvement in long steel segment. However, the outlook is likely to be better as
ArcelorMittal has indicated higher volume and better realization. Robust production jump of 65% in flat steel
Europe production indicates that management has seen some demand at ground level in the region.

November 11, 2009
Financial Summary
Description 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 QoQ YoY
(USD Mn) Mar-08 Jun-08 Sept-08 Dec-08 Mar-09 Jun-09 Sept-09 % Chg. % Chg.
Sales 29,809 37,840 35,198 22,089 15,123 15,176 16,170 -54.1 6.5
EBITDA 5,044 8,046 8,580 2,808 883 1,221 1,589 -81.5 30.1
- EBITDA Margin (%) 16.9 21.3 24.4 12.7 5.8 8.0 9.8 -59.7 22.1
Operating Income 3,614 6,621 5,467 -3,466 -1,483 -1,184 305 -94.4 -125.8
- Operating Margin (%) 12.1 17.5 15.5 -15.7 -9.8 -7.8 1.9 -87.9 -124.2
Income before taxes and MI 3,207 7,124 4,930 -3,724 -2,221 -2,093 19 -99.6 -100.9
Income before Minority Interest 2,611 6,191 4,235 -2,598 -1,133 -854 918 -78.3 -207.5
Net Income 2,371 5,839 3,821 -2,632 -1,063 -792 903 -76.4 -214.0
Production and Sales Volumes Blended Realization, Cost and EBITDA (Per Tonne)
31 (MT) Production Volume Realization Cost EBITDA (RHS)

1,400 (USD/Tonne) (US/Tonne) 350
1,200 280
24
1,000 210
800 140
17
600 70
10 400 0
1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09

November 11, 2009
Crude Steel Production Shipments
4Q08 1Q09 2Q09 3Q09 4Q08 1Q09 2Q09 3Q09

7,000 ('000/Tonne) 7,000 ('000/Tonne)
5,600 5,600
4,200 4,200
2,800 2,800
1,400 1,400
0 0
FCA FCE LC AACIS FCA FCE LC AACIS
Realization/Tonne EBITDA/Tonne
4Q08 1Q09 2Q09 3Q09 4Q08 1Q09 2Q09 3Q09

1,200 (USD/Tonne) 200 (USD/Tonne)
150
900
100
600
50
300 0
FCA FCE LC AACIS FCA FCE LC AACIS
Note: FCA: Flat Carbon America; FCE: Flat Carbon Europe; LC: Long Carbon; AACIS: Asia, Africa and CIS

November 11, 2009
Hindalco Industries Limited

Ratings • Domestic results marginally lower than expectation due
CMP 127 Recommendation ADD to lower aluminium profit, whereas Novelis operations
Target 133 Risk HIGH
higher than expectation
Bloomberg Consensus • Retain ‘ADD’ with TP of Rs 133, 12% upside from CMP
(BUY/HOLD/SELL) 11 / 09 / 15
Hindalco turned out subdued standalone financial
Sensex Nifty BSE Metals performance due to sharp 28% drop in aluminium prices and
16,441 4,882 15,057 crash in DAP subsidy and sulphuric acid prices to the tune of
Codes 79% and 95%. The company got some relief from
BSE NSE Bloomberg Reuters improvement in long term Tc/Rc margin and higher volume
500440 HINDALCO HNDL IB HALC.BO
across the segments. Novelis performance was better than
expected and expiry of fixed priced contracts in Dec’09 would
Sensex Hindalco
52 Wk: Hi/Lo 17,493/8,047 144/37 further improve the margins. Number of domestic brownfield
Life High 21,207-Jan 08 228-May 06 and greenfield projects are on way for scheduled
P/E 20.90 13.18 commissioning during FY12-14, trebling aluminium capacity.
P/BV 3.93 0.91 The company has decided to increase the fund raising size
Dividend Yield (%) 1.17 1.06 from Rs 24 bn to Rs 29 bn through a mix of QIP/GDR/Other
Mkt Cap (INR Mn) 56,688,748 215,904 securities. Hindalco standalone figures for 2QFY10 are not
Equity (INR Mn) - 1,701
comparable with those of the corresponding quarter due to
change in AS - 30.
Share Holding Pattern % Jun-09 Sept-09 2QFY10 Result Highlights
Foreign 25.71 28.90
Institutions 19.52 18.90 Lower LME realization partially offset higher volumes led
Government 0.02 0.02 to 13% YoY drop in revenue to Rs 48,926 mn.
Corporate 7.25 5.67
Promoters 36.10 36.10
Modest decline in cost could not stop shaving off 549 bps
Public & Others 11.41 10.41 from EBITDA margin to 12.4%; EBITDA therefore was
down whopping 39% YoY to Rs 6,092 mn.
Returns % Abs Relative to
Other income sank 68% YoY to Rs 573 mn due to lower
Perf Sensex BSE Metals
1 Month 1.09 2.70 -4.30
treasury gains, while interest cost witnessed 22% YoY
3 Months 27.27 15.74 -1.64 drop to Rs 663 mn due to decline in LIBOR rate.
1 Year 97.20 38.20 -75.86 Aforesaid factors along with marginal lower effective tax
rate resulted in 52% decline in PAT to Rs 3,441 mn.
Relative Price Performance Valuation
250 Hindalco Sensex Hindalco is currently trading 6.0x FY10e, FY11e EPS and
EV/EBITDA of 6.0x and 5.6x for FY10 and FY11 respectively.
We retain ‘BUY’ with revised TP of Rs 133/share (earlier Rs
200 145) after factoring changes in estimates and higher multiple
(6x FY11 EV/EBITDA) to Novelis due to pass through
business model after fixed priced contract expiry.
150
Financial Summary (Consolidated)
(INR Mn) FY07 FY08 FY09 FY10E FY11E
100
Net Sales 190,965 596,963 654,146 612,859 629,362
EBITDA 41,133 62,405 25,865 78,309 80,526
50 Profit after MI 26,278 21,535 5,270 33,995 33,753
Oct-08 May-09 Nov-09 EPS (INR) 25.2 17.6 3.1 20.0 19.8

November 11, 2009
Change in Earning Estimates We have revised our FY10 estimates upwards due to strong performance
in Novelis, while we have revised our FY11 estimates downwards
following the management guidance on FY11 financial performance.
Descriptions Earlier New %
(INR Mn) Assumption Assumption Change
FY2010 FY2011 FY2010 FY2011 FY2010 FY2011
Net Sales 566,623 603,639 612,859 629,362 8.2 4.3
EBITDA 90,437 93,449 78,309 80,526 -13.4 -13.8
Profit after MI 39,735 42,056 33,995 33,753 -14.4 -19.7
2QFY10 Novelis Result Highlights Weak LME aluminium realization coupled with 10% lower volumes
led to 26% YoY drop in revenue to $2,181 mn. However, the company
has managed 5% improvement in sequential volume, while revenue
Volume EBITDA/Tonne (RHS) was higher by 11% during the same period.
850 ('000' Tonne) (USD) 300
The adjusted operation EBITDA reported a massive jump of 125%
YoY to $200 mn on back of lower LME and tough cost control
775 240 measures. The company has also been able to improve adjusted
EBITDA by 61% sequentially. Novelis reported highest
700 180
EBITDA/tonne in last eight quarters.
Interest cost during the quarter remained stable at $41 mn, while
625 120
depreciation cost sank 14% YoY to $92 mn due to rationalization of
fixed assets.
550 60
The company reported $80 mn gain on change in fair value of
Jun-07 Mar-08 Dec-08 Sep-09 derivative instruments compared to loss of $185 mn corresponding
quarter last year.
Aforesaid factors led to turnaround in PAT after minority interest
from loss of $104 mn to gain of $195 mn during the quarter.
Sequentially, the PAT after minority interest improved 36%.
Other Highlights The company is observing stable to positive demand across the
region and geography.
South America and Europe saw double digit growth compared to
sequential last quarter.
Novelis has been able to improve conversion premium due to
sustained improvement in prices and product mix.
The unrealized gain on derivative stood at $254 mn during the
quarter compared to loss of $221 mn during 2QFY09 and gain of $299
mn during 1QFY10.
The capital expenditure during first half stood at $46 mn, while the
company has guided $51 mn during second half.

November 11, 2009
Standalone Segment Highlights
Aluminium Brownfield expansion at Hirakud enabled the company to report highest

Production ever production of aluminium at 139,894 tonne, a growth of 7% from
corresponding quarter last year and 3% QoQ. The Muri brownfield
Alumina Aluminium (RHS) expansion helped in 5% YoY rise in alumina production to 311,706 tonne.
325,000 (Tonne) (Tonne) 145,000
The production of rolled/foil products recorded 12% jump to was 57,787
314,000 136,000 tonne, which was higher by 9% from sequential quarter. although,
extrusion production was up 11% QoQ at 9,815 tonne, it remain
303,000 127,000
marginally down from last year.
292,000 118,000
Aluminium segment achieved turnover of Rs 16,500 mn, a decline of 22%
281,000 109,000 YoY due to lower realization. The EBIT margin plunged from to 15.7%
270,000 100,000
from 33.7% during 2QFY10 and therefore EBIT was down by a whopping
Jun-06 Jun-07 Jun-08 Jun-09 64% YoY to Rs 2,586 mn. However, as stated earlier, these numbers are not
comparable due to change in AS – 30.
Copper The copper segment recorded strong production due to ronust demand in
Production domestic market. the company reported highest ever copper cathode
production at 89,692 tonne, an increase of 16% YoY and 12% QoQ. CC
Copper Cathodes CC Rods (RHS) Rods production also witnessed 9% YoY and 3% QoQ growth during the
95,000 (Tonne) (Tonne) 45,000
quarter.
87,000 40,000 A sizeable 16% drop in copper prices entirely offset the volume gain and
79,000 35,000
led to 8% YoY decline in segment revenue to Rs 32,691 mn. the company
has also been able to report 32% jump in sequential revenue largely driven
71,000 30,000 by 24% higher prices and volume. Improvement in long term Tc/Rc
enabled company to post 277 bps YoY expansion in EBIT margin to 6.6%,
63,000 25,000
which resulted in robust 57% growth in EBIT to 2,172 mn. The company
55,000 20,000 has been able to expand EBIT margin by 34 bps sequentially.
Jun-06 Jun-07 Jun-08 Jun-09
Expansion Projects
Belgaum The specials alumina production from Belgaum will be ramped up to

316,000 tonne from 138,000 tonne. On completion, this project will catapult
Hindalco to one of the largest specials producer in the world. A co-gen 18
MW power plant and a railway siding facility have also been included in
the project, which will reduce the cost of production substantially. This is
expected to be completed by end 2011.
Hirakud The smelter expansion from 143,000 tonne to 155,000 tonne was completed
on time, while work on the smelter expansion from 155,000 tonne to
213,000 tonne is now underway, where some part of this would be
completed by Jul’10 and the rest would be commissioned during FY12.
The company has also undertaken the project of transferring all key
equipments for flat rolled products from Novelis Plant at Rogerstone, UK
to Hirakud. This would enable the company to produce can body stock for
local and export market at competitive cost. The project is slated for
completion in 2QFY12.

November 11, 2009
Greenfield Projects
Utkal Alumina Construction of 1.5 MT alumina refinery in Orissa is in full swing, where ~
75% of the project cost has already been committed. Major equipments
like boilers, evaporators and turbines have started arriving at site, while
production of alumina is expected to start around Jul’11.
Mahan Aluminium Aluminium smelter with capacity of 359,000 tonne and a captive 900 MW
power plant in MP is progressing well and all the major approvals are in
place. A major chunk of land has already been acquired and site activities
are running progressing smoothly. Major orders have been placed for both
the smelter and the power plant and ~ 58% of the total project cost has
been committed. The first metal from the smelter is expected to roll out by
Jul’11.
Aditya Aluminium This is an integrated Aluminium project, situated in Orissa, with a 1.5 MT
alumina refinery, 359,000 tonne aluminium smelter and 900 MW captive
power plant. Major orders have been placed for both the smelter and the
power plant and ~ 51% of the total project cost for the smelter & power
plant has been committed. The first metal from the smelter is slated for
Oct’11, while the refinery would be mechanically completed by Jun’13.
Jharkhand Aluminium This project contains aluminium smelter capacity of 359,000 tonne and 900
MW captive power plant, located in Jharkhand. The land acquisition
process has commenced and activities for getting the environmental
clearance have also started. Water allocation clearance for 55 mcm of
water from the Subarnarekha basin has been obtained, while Tubed coal
mine has been allotted jointly with Tata Power. The first metal from the
smelter is expected by Jun’13.
Industry Outlook
Aluminium Global aluminium demand contracted 11% during first half of fiscal year,
where production continues to exceed consumption. Although, the
consumption has been rising at a faster pace in the last few months
compared to production. India has witnessed growth as high as 15%
during first half, which remain encouraging considering this is just the
beginning of recession easing globally.
Downstream demand in India has caught on considerably compared to
the second half of the last fiscal year. Electrical and transportation sectors
have done very well while building & construction is showing signs of
revival. Consumer durables and packaging have continued on the high
growth path during the same period.

November 11, 2009
Copper Copper prices have sustained their strength, aided by a brighter outlook
on global economy and improved risk sentiment. However, rising
exchange stocks and muted Chinese imports may cap further uptrend in
prices.
The Indian copper market benefited from the robust trend in the electrical
segment and poor scrap availability during first half. However, increased
scrap availability and high LME could act as a dampener for growth in
refined copper market in the coming months.
Following last year’s financial meltdown, delays in copper mining projects

have led to tightness in the global concentrate market, resulting in
depressed spot Tc/Rc. The easing of the market seems less likely in the
imminent future.
AS-30 Implementation Accounting for all derivatives during this quarter have been done as
prescribed under the new AS and accordingly, net gain/(loss) Rs 470 mn,
Rs 1,990 mn and Rs (310) mn have been included under net sales,
consumption of raw materials and other expenditure. The figures of the
current quarter in respect of above items are, therefore, not comparable
with those of the corresponding quarter of the previous year.
2QFY10 Financial Results (Standalone)

Description 2QFY10 2QFY09 Y-o-Y 1HFY10 1HFY09 Y-o-Y
(INR Mn) Sept-09 Sept-08 % Chg Sept-09 Sept-08 % Chg
Net Turnover 48,926 56,366 -13.2 87,635 102,557 -14.6
Other Operating Income 246 466 -47.3 531 750 -29.1
Other Income 573 1,768 -67.6 1,326 3,914 -66.1
Total Income 49,499 58,600 -15.5 88,961 107,221 -17.0
Expenditure 31,980 35,299 -9.4 57,099 62,274 -8.3

Variation in Stock -7,694 498 -1645.6 -10,868 -1,993 445.2
Consumption of Raw Materials 39,052 33,834 15.4 67,248 63,266 6.3
Purchase of Traded Goods 622 968 -35.7 719 1,001 -28.2
Employees Cost 2,282 1,674 36.3 4,352 3,168 37.4
Power and Fuel 5,223 6,143 -15.0 9,433 11,686 -19.3
Other Expenses 3,595 3,783 -5.0 3,612 6,755 -46.5
Total Expenditure 43,080 46,898 -8.1 74,496 83,883 -11.2
EBITDA 6,092 9,934 -38.7 13,670 19,424 -29.6

EBITDA Margin (%) 12.4 17.5 -5.1 15.5 18.8 -3.3
Depreciation 1,659 1,592 4.2 3,312 3,160 4.8
PBIT 5,006 10,110 -50.5 11,684 20,179 -42.1
Interest & Finance Charges 663 855 -22.5 1,345 1,616 -16.8
PBT 4,343 9,255 -53.1 10,339 18,563 -44.3
Total Tax 903 2,056 -56.1 2,093 4,396 -52.4
Net Profit after Tax 3,441 7,200 -52.2 8,246 14,167 -41.8
Share Capital (FV Re 1 each) 1,701 1,227 38.6 3,401 2,454 38.6
Basic EPS (INR) 2.0 5.9 -65.5 4.8 11.5 -58.0
November 11, 2009
2QFY10 Financial Results (Novelis)

Net Turnover 2,181 2,959 -26.3 4,141 6,062 -31.7
Expenditure
Cost Of Goods Sold 1,728 2,791 -38.1 3,261 5,622 -42.0
Selling, General and Administrative Expenses 83 89 -6.7 161 173 -6.9
R&D Expenses 9 10 -10.0 17 22 -22.7
EBITDA 361 69 423.2 702 245 186.5

EBITDA Margin (%) 16.6 2.3 14.2 17.0 4.0 12.9
Depreciation 92 107 -14.0 192 223 -13.9
PBIT 269 -38 -807.9 510 22 2,218.2
Interest & Finance Charges 41 41 0.0 81 81 0.0
(Gain) Loss on Change in Fair Value of Derivative
-80 185 -143.2 -152 120 -226.7
Instruments, Net
Restructuring Charges 3 - - 6 -1 -700.0
Equity in Net (Income) loss of Non-Consolidated
10 -2 -600.0 20 - -
Affiliates
Other (Income) Expenses, Net -6 10 -160.0 -19 33 -157.6
PBT 301 -272 -210.7 574 -211 -372.0
Provision (benefit) for Taxes on Income (Loss) 87 -168 -151.8 199 -133 -249.6
Net Profit After Tax 214 -104 -305.8 375 -78 -580.8
Minority Interest -19 - - -37 -2 1,750.0
PAT After MI 195 -104 -287.5 338 -80 -522.5

November 11, 2009
Financials
Profit & Loss Statement (Standalone)
Descriptions FY2007 FY2008 FY2009 FY2010E FY2011E
(INR Mn) Mar-07 Mar-08 Mar-09 Mar-10 Mar-11
Net Turnover 183,130 189,091 180,530 184,304 211,393
Other Operating Income 0 2,920 1,667 1,291 1,850
Other Income 3,701 4,929 6,367 2,951 3,300
Total Income 186,831 196,940 188,563 187,255 214,693
Expenditure
Variation in Stock -4,425 -1,370 5,207 -10,868 0
Consumption of Raw Materials 110,887 120,517 104,263 130,547 135,795
Purchase of Traded Goods 230 925 1,130 919 400
Employees Cost 5,196 6,212 6,676 8,212 8,120
Power and Fuel 18,486 19,108 22,316 18,793 20,179
Other expenses 12,606 12,607 12,246 10,209 13,609
Total Expenditure 142,980 157,999 151,838 157,812 178,103
EBITDA 40,150 34,011 30,359 27,783 33,289

EBITDA Margin (%) 21.9 17.7 16.7 15.0 15.7
Depreciation 6,381 5,878 6,453 6,717 6,908
PBIT 37,470 33,062 30,273 24,017 29,682
Interest & Finance Charges 2,424 2,806 3,369 2,677 3,366
PBT 35,046 30,256 26,903 21,340 26,316
Total Tax 9,403 1,647 4,601 4,843 6,579
PAT 25,643 28,609 22,303 16,497 19,737
Share Capital (FV Re 1 each) 1,043 1,226 1,701 1,701 1,701
Basic EPS (INR) 25.3 24.4 13.1 9.7 11.6

November 11, 2009
Profit & Loss Statement (Novelis)

Descriptions FY2007 FY2008 FY2009 FY2010E FY2011E
(INR Mn) Mar-07 Mar-08 Mar-09 Mar-10 Mar-11
Net Turnover 10,160 11,246 10,177 8,706 8,664
Expenditure
Cost of Goods Sold 9,629 10,246 9,251 7,308 7,362
Selling, General and Administrative Expenses 417 414 319 327 346
R&D Expenses 0 52 41 37 40
EBITDA 75 534 566 1,034 916

EBITDA Margin (%) 0.7 4.7 5.6 11.9 10.6
Depreciation 233 399 439 389 362
PBIT -158 135 127 645 554
Interest & Finance Charges 208 199 168 159 150
(Gain) Loss on Change in Fair Value of Derivative
-39 -42 556 -152 0
Instruments, Net
Impairment of Goodwill 0 0 1,340 0 0
Other 34 14 231 57 100
PBT -361 -36 -2,168 581 304
Provision (Benefit) for Taxes on Income (Loss) -99 76 -246 201 91
Net Profit After Tax -262 -112 -1,922 380 213
Minority Interest -3 -4 12 -37 0
PAT After MI -265 -116 -1,910 343 213

November 11, 2009
Hindustan Zinc Limited

Ratings • Results marginally better than expectations; PAT jumps
CMP 930 Recommendation ADD 30% QoQ but slightly down 2.6% YoY
Target 939 Risk LOW
• Expansion from 0.76 MT to 1.07 MT on schedule
Bloomberg Consensus
(BUY/HOLD/SELL) 21 / 04 / 03
• Cash per share at Rs 241 as of Q2FY10
• Retain ‘ADD’ with a TP of Rs 939, 8% upside from CMP
Sensex Nifty BSE Metals
16,441 4,882 15,057 INR zinc prices were 17% higher than corresponding quarter
Codes last year after consistent decline for last nine quarters. The
BSE NSE Bloomberg Reuters company also marked its sixth consecutive decline in
500188 HINDZINC HZ IB HZNC.BO quarterly PAT; however, profit growth is likely to remain
remarkable from next quarter onwards. Zinc and lead prices
Sensex Hind. Zinc
have witnessed strong surge last month and currently stand
52 Wk: Hi/Lo 17,493/8,047 952/296
26% higher than last quarter average, which is also higher
Life High 21,207-Jan 08 1,119-May 06
P/E 20.90 15.27 than our FY11 estimates. Stability in LME prices at current
P/BV 3.93 2.74 level would result in earning upgrade for the company. The
Dividend Yield (%) 1.17 0.43 call-option issue of HZL can also be next catalyst considering
Mkt Cap (INR Mn) 56,688,748 392,953 reformist coalition at centre.
Equity (INR Mn) - 4,225
* - TTM standalone basis Capitaline
2QFY10 Results Highlights
Steady growth in zinc volume to the tune of 15% along
Share Holding Pattern % Mar-09 Jun-09 with 17% and 7% jump in zinc and lead realization were
Foreign 1.47 1.64
largely offset with lower by-product realization of
Institutions 1.97 1.83
Government 29.54 29.54
sulphuric acid to the tune of 94% and 11% lower lead
Corporate 0.73 0.74 volume, which resulted in just 3% YoY increase in bet
Promoters 64.92 64.92 sales at Rs 17,896 mn.
Public & Others 1.37 1.34
Lower raw material and admin cost were mostly able to
compensate for rise in royalty cost leading 430 bps
Perf Sensex BSE Metals expansion in EBITDA margin to 59.1% and 10% YoY
1 Month 12.93 14.54 7.54 increase in EBITDA to Rs 10,755 mn.
3 Months 34.42 22.89 5.51
Drop in other income by 15% coupled with sharp increase
1 Year 166.48 107.48 -6.58
in effective tax rate from 11.6% to 18.5% resulted in 2.6%
YoY slump in PAT at Rs 9,350 mn.
Relative Price Performance Valuation
280 Hind Zinc Sensex Hindustan Zinc is trading at a P/E of 10.1x and 8.7x and
Strong cash reserve of Rs 100 bn (Rs 241/share) in addition to
220 surge in LME zinc and lead prices remain positive for the
company. We retain ‘ADD’ rating with same TP at Rs 939,
which provides 8% return from CMP.
160
Financial Summary
100
Net Sales 85,602 78,778 56,803 71,833 83,341
EBITDA 64,069 54,617 28,760 39,905 45,488
PAT 44,418 43,961 27,276 36,155 42,058
40
Oct-08 May-09 Nov-09 EPS (INR) 105.1 104.0 64.6 85.6 99.5

November 11, 2009
Steady production growth Performance in mining operation helped the company to report 3% YoY
growth in mined zinc and lead metal production at 192,517 tonne during
the quarter. Refined zinc production witnessed 16% YoY surge at 140,661
tonne, while refined lead production witnessed 8% YoY drop to 11,565
tonne. HZL was able to enhance its silver and sulphuric acid production
by 40% and 19% YoY to 30,324 tonne and 247,438 tonne respectively
during the quarter.
Sales volume of refined zinc metal remained 15% YoY higher, while
refined lead metal volume witnessed 11% YoY slump during the quarter.
Sales volumes of silver and sulphuric acid were higher by 21% and 10%
YoY respectively. The company also sold 22,359 tonne and 21,000 tonne of
surplus zinc and lead concentrates respectively during the quarter.
The management has indicated higher refined production in second half
as some critical issue with new smelter has been resolved in the later part
of 2QFY10.
Progress of Projects Expansion of Rampura Agucha mine from 5 MT to 6 MT is on schedule

for commissioning by mid-2010, while construction at the 210,000 tonne
zinc smelter, 100,000 tonne lead smelter along with 160 MW CPP project
at Rajpura Dariba are progressing well, which would also be completed
by mid-2010. Work at the mining projects at Sindesar Khurd and Kayar
are also on schedule for progressive commissioning at the same time.
Post completion of these projects, HZL will be the world’s largest
integrated zinc – lead producer with a total capacity of 1,065,000 tonne.
The total investment in these projects is estimated at Rs 36 bn.
Refined Zinc and Lead Volume Sulphuric Acid and Silver Volume
HZL has seen strong volume growth in zinc segment The company has also reported strong volume in by-
and this would continue with improving utilization of products such as sulphuric acid and silver. The
existing expansion along with new capacity addition ongoing expansion would ensure higher volume for
by mid-2010, however, lead volume has remain these products in coming quarters also.
subdued in last couple of quarters.
Refined Zinc Refined Lead (RHS) Sulphuric Acid Silver (RHS)
160,000 (Tonne) (Tonne) 20,000 275,000 (Tonne) (Kg) 35,000
128,000 16,000 220,000 28,000
96,000 12,000 165,000 21,000
64,000 8,000 110,000 14,000
32,000 4,000 55,000 7,000
0 0 0 0
Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09
Source: Khandwala Research, Company Source: Khandwala Research, Company

November 11, 2009
Zinc and Lead Realization and EBITDA Margin Sulphuric Acid and Silver Realization
Zinc and lead have seen steady improvement from last Sulphuric acid realization shoots up during the first
three quarters after witnessing steady decline previous half of FY09; however, it has witnessed severe
year and this has directly improved the EBITDA correction from thereon, while silver realization has
margin of the company. remained more or less stable.
Zinc Real. Lead Real. EBITDAM (RHS) Sulphuric Acid Silver (RHS)
200,000 (INR/Tonne) (%) 85 12,000 (INR/Tonne) (INR/Kg) 30,000
160,000 72
9,000 25,000
120,000 59
6,000 20,000
80,000 46
3,000 15,000
40,000 33
0 20 0 10,000
Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-06 Jun-07 Jun-08 Jun-09
2QFY10 Financial Results

Descriptions 2QFY10 2QFY09 Y-o-Y 1HFY10 1HFY09 Y-o-Y
Net Sales 17,896 17,438 2.6 33,018 33,875 -2.5
Other Operating Income 287 466 -38.4 431 778 -44.5
Other Income 1,537 1,807 -14.9 3,339 3,590 -7.0
Total Income 19,720 19,712 0.0 36,788 38,242 -3.8
Expenditure
Mining and Manufacturing Expenses 4,554 5,186 -12.2 8,985 9,555 -6.0
Mining Royalty 1,385 1,018 36.1 2,305 2,039 13.0
Employees Cost 1,037 865 19.9 1,843 1,713 7.6
Administrative, Selling and Other Expenditure 615 909 -32.4 1,332 1,648 -19.2
Total 7,428 8,084 -8.1 14,871 14,744 0.9
EBITDA 10,755 9,821 9.5 18,578 19,909 -6.7

EBITDA Margin 59.1 54.8 4.30 55.5 57.5 -1.91
Depreciation & Amortization 771 704 9.5 1,519 1,390 9.2
PBIT 11,521 10,924 5.5 20,398 22,108 -7.7
Interest 54 71 -24.4 86 140 -38.6
PBT 11,467 10,853 5.7 20,312 21,968 -7.5
Total Tax 2,118 1,257 68.4 3,774 3,895 -3.1
PAT 9,350 9,595 -2.6 16,538 18,073 -8.5
Equity Capital 4,225 4,225 - 4,225 4,225 -
EPS (INR) 22.1 22.7 -2.6 39.1 42.8 -8.5
November 11, 2009
Financials
Profit & Loss Statement
Descriptions (INR Mn) FY2007 FY2008 FY2009 FY2010E FY2011E
Gross Sales 92,205 87,369 61,415 76,445 93,170
Less: Excise 6,602 8,591 4,612 5,733 6,988
Net Sales 85,602 78,778 56,803 71,833 83,341
Other Operating Income - 833 1,418 1,031 1,600
Other Income 2,313 7,684 7,894 7,847 10,026
Total Income 87,915 87,294 66,115 80,711 94,967
Expenditure
(Inc) / Dec in Stock-in-trade and WIP -569 591 -244 407 -
Mining and Manufacturing Expenses 10,405 13,021 19,300 21,068 26,898
Mining Royalty 6,438 5,111 3,642 4,949 5,590
Employees Cost 2,598 3,082 3,649 3,723 3,820
Administrative, Selling and Other Expenditure 2,661 3,189 3,113 2,813 3,145
Total 21,533 24,994 29,461 32,959 39,453
EBITDA 64,069 54,617 28,760 39,905 45,488

EBITDA Margin 74.8 68.6 49.4 54.8 53.6
Depreciation & Amortization 1,561 2,205 2,853 3,015 3,649
PBIT 64,821 60,095 33,801 44,737 51,865
Interest 284 242 219 206 260
PBT 64,537 59,853 33,582 44,531 51,605
Total Tax 20,119 15,893 6,306 8,376 9,547
PAT 44,418 43,961 27,276 36,155 42,058

November 11, 2009
JSW Steel Limited

Ratings • Results above expectations on account of more than
CMP 847 Recommendation BUY estimated realization
Target 1,007 Risk HIGH
• Management maintains guidance of 72% production and
Bloomberg Consensus 78% volume growth
(BUY/HOLD/SELL) 21 / 09 / 09 • Recommend ‘BUY’ with TP of Rs 1,007, 18% upside from
CMP
16,441 4,882 15,057 JSW Steel reported over 6% jump in blended realization from
Codes sequential previous quarter surprised us and street as well
BSE NSE Bloomberg Reuters since company sold higher semis during the quarter while
500228 JSWSTEEL JSTL IB JSTL.BO long product prices also remain subdued. The company is on
track to achieve volume growth as it has already attained 67%
Sensex JSW Steel
growth during 1HFY10. The company also seems to be on
52 Wk: Hi/Lo 17,493/8,047 935/161
Life High 21,207-Jan 08 1,390-Dec 07 track to achieve EBITDA/tonne guidance of $150/tonne as it
P/E 20.90 18.04 has already achieved EBITDA of $139/tonne during 1HFY10
P/BV 3.93 2.08 with EBITDA of over $160/tonne during 2QFY10. Although,
Dividend Yield (%) 1.17 0.12 US operation performance improved from sequential quarter,
Mkt Cap (INR Mn) 56,688,748 158,441 it remain low compared to previous year, however,
Equity (INR Mn) - 1,871 management expect US operation to generate positive
EBITDA from 3QFY10.
Share Holding Pattern % Jun-09 Sept-09 2QFY10 Standalone Results Highlights
Foreign 35.84 36.95 Robust volume growth of 74% YoY was largely mitigated
with 40% YoY plunge in net realization and resulted in 6%
3.43 3.19
higher revenue to Rs 45,539 mn.
Corporate
Promoters 45.02 45.02 Sharp fall in key raw material enabled 41% drop in cost of
Public & Others 9.38 8.92 production, which helped the company to restrict the
EBITDA margin shrinkage at just 72 bps and therefore
Returns % Abs Relative to EBITDA was up by 3% YoY to Rs 11,672 mn.
1 Month -6.39 -4.78 -11.78 The company incurred forex loss of Rs 2,684 mn during
3 Months 24.91 13.38 -4.00 corresponding quarter last year.
1 Year 171.65 112.66 -1.41 Depreciation and interest cost was higher by 42% and 17%
YoY respectively on commissioning of new capacity.
Relative Price Performance Aforesaid factors led to 42% YoY jump in PAT to Rs 4,515
mn, however, PBT before extraordinary item was down
300 JSW Steel Sensex
by 11% YoY to Rs 6,582 mn.
Valuation
JSW Steel is currently trading at a P/E of 9.8x and 6.2x and
200 EV/EBITDA of 6.2x and 4.8x for FY10 and FY11 respectively.
We recommend ‘BUY’, while revising our target price from Rs
974 to Rs 1,007 (5.5x FY11 EV/EBITDA).
100
Net Sales 85,709 131,924 160,277 194,783 243,726
EBITDA 27,933 35,928 32,491 45,809 63,795
0
PAT 12,920 17,309 2,749 16,323 25,889
Oct-08 May-09 Nov-09
EPS (INR) 81.2 92.5 14.7 87.3 138.4

November 11, 2009
Change in Earning Estimates We have revised our estimates upward for FY10 considering current
quarter performance and improved realization for next two quarters.
However, we have revised our FY11 estimates marginally downward
after lower US sales and higher raw material cost than previously
estimated.
FY2010 FY2011 FY2010 FY2011 FY2010 FY2011
Net Sales 186,545 247,865 194,783 243,726 4.4 -1.7
EBITDA 42,192 67,592 45,809 63,795 8.6 -5.6
Profit after MI 13,371 26,799 16,323 25,889 22.1 -3.4
2QFY10 US Operations Highlights
Operational Performance US operating performance improved substantially from sequential

quarter. Plate production and volume were higher 76% and 169% from
1QFY10 respectively, while pipe production and volume were higher
210% and 314% from 1QFY10 respectively. The company also sold 7,505
tonne of slab during the quarter.
Financial Performance US operation recorded a massive plunge of 75% YoY in revenue to $41.5
mn, while revenue jumped 131% from sequential quarter. Lower capacity
utilization led to EBITDA loss of $21.0 mn compared to EBIDTA of $29.7
mn, while PBT and PAT remained negative at $38.9 mn and $25.1 mn
compared to profit of $11.4 and $9.6 mn respectively during
corresponding quarter last year.
The company has taken all the write-down related to high raw material
cost and the management expects the company to remain EBITDA
positive from 3QFY10 onwards.

November 11, 2009
JSW Steel Domestic Highlights
Operational Performance The company reported crude steel production growth of 54% YoY to 1.54
MT, which remain 12% higher on QoQ as well. Production of flat steel
and long steel was higher by 28% and 214% respectively over
corresponding period last year. Sales volume jumped 74% YoY and 10%
QoQ to 1.45 MT, while sale of semis, flat steel, long steel and value added
products was higher by 100%, 34%, 76% and 244% YoY respectively.
The share of semis sales during quarter has gone up from 24% to 28% due
to delay in next line facility. Nevertheless, the company has improved the
sale of branded products in total value added sales from 17% during
2QFY10 to 33% during this quarter. JSW has opened 80 stores of JSW
Shoppe (the retail outlet) till 2QFY10 adding 13 store in last quarter and 70
stores in last one year.
Financial Position JSW Steel consolidated debt stood at 140,500 mn during the end of current
quarter, while long term D/E ratio of 1.60x compared to 1.67x as on
1QFY10. Weighted average cost of debt also dropped significantly to
6.71% compared to 7.05% at the end of 1QFY10.
Covenant Relaxation The unprecedented global crisis of late FY09 resulted in considerable
lower financial performance and consequently the company and some of
its subsidiaries were unable to comply with certain financial covenants
contained in certain loan agreements. This also resulted in non
compliance in terms of the Trust Deed executed in connection with the
issue of $325 mn FCCBs in Jun’07.
JSW Steel has approached its lenders to obtain waivers of past default
with respect to these credit facilities (and, where appropriate, the
relaxation of the relevant covenants). The company has obtained
necessary waivers or amendments from some lenders and believes it is on
track to receive the approvals from the remaining relevant lenders in due
course. In abundant caution, the Trustees for the FCCBs have also been
notified detailing the factual position.
Project Status The implementation of state of-the-art new Hot strip mill & beneficiation
plant at Vijayanagar and blooming mill at Salem is progressing at a brisk
pace to be commissioned at the end of current fiscal year. The project
execution work is progressing in full swing to expand the crude steel
capacity to 10 MT and to set up 300 MW power plant at Vijayanagar,
which is likely to be commissioned by Mar’11.

November 11, 2009
Crude Steel Production & Saleable Volume Blended Realization, Cost & EBITDA
The company has shown tremendous growth on back After seeing very sharp reduction in EBITDA/tonne
of new commissioned capacity and this trend would till March quarter, performance has improved
continue in view of full utilization of current expansion substantially on back of reduction in cost. This is likely
and next phase of expansion from 7.8 MT to 11.0 MT in to remain steady from here on due to stability in
Mar’11. realization and raw material cost.
16 (Lac Tonne) Crude Steel Sales Volume Realization Cost EBITDA/Tonne (RHS)
55,000 (INR/Tonne) (INR/Tonne) 15,000
13
47,000 12,000
10
39,000 9,000
7
31,000 6,000
4 23,000 3,000
1 15,000 0
Plate & Pipe Production LT Debt/Equity, LT Debt/EBITDA and Weighted

Average Cost of Debt
Plate & pipe production have dropped substantially After constant deterioration in debt ratios in past
after the collapse of global economy, however, there couple of quarters, there is improvement visible during
has been sizeable improvement from sequential the quarter. Nevertheless, the company has been able
quarter and is likely to continue in coming quarter to lower its WACD on back of loose monetary policy
also. across the globe.
150,000 (Tonne) Plate Production Pipe Production LT Debt/Equity LT Debt/EBITDA WACD (RHS)
6 (x) (%) 8.0
120,000
5 7.5
4 7.0
90,000
3 6.5
60,000
2 6.0
30,000
1 5.5
0 0 5.0
Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

November 11, 2009

Descriptions 2QFY10 2QFY09 YoY 1HFY10 1HFY09 YoY
(INR Mn) Sept-09 Sept-08 % Chg. Sept-09 Sept-08 % Chg.
Gross Turnover 47,791 46,602 2.6 89,376 86,440 3.4
Carbon Credit 602 - - 602 - -
Excise Duty 2,854 3,511 -18.7 5,501 6,634 -17.1
Net Turnover 45,539 43,091 5.7 84,478 79,805 5.9
Other Operating Income 254 27 832.4 483 251 92.7
Total Income 45,792 43,118 6.2 84,960 80,056 6.1
Expenditure
Variation-in-Stock -447 -4,672 -90.4 -963 -9,123 -89.4
Consumption of Raw Materials 25,846 28,601 -9.6 50,432 52,372 -3.7
Power and Fuel 2,497 1,716 45.6 4,829 3,271 47.7
Employees Cost 956 838 14.0 1,876 1,613 16.3
Other Expenses 5,269 5,306 -0.7 9,647 10,415 -7.4
Total Expenditure 34,121 31,789 7.3 65,822 58,548 12.4
EBITDA 11,672 11,302 3.3 19,138 21,481 -10.9

EBITDA Margin (%) 25.5 26.2 -0.7 22.5 26.8 -4.3
Depreciation 2,805 1,975 42.0 5,523 3,827 44.3
Other Income 13 - - 28 50 -43.3
PBIT 8,879 9,354 -5.1 13,643 17,731 -23.1
Interest & Finance Charges 2,298 1,960 17.3 4,504 3,491 29.0
Exchange Loss/(Gain) - 2,684 - -2,399 6,311 -138.0
PBT 6,582 4,711 39.7 11,538 7,928 45.5
Tax 2,066 1,536 34.5 3,623 2,560 41.5
Net Profit after Tax 4,515 3,175 42.2 7,916 5,368 47.5
Share Capital 1,871 1,871 - 1,871 1,871 -
Basic EPS (INR) 24.1 17.0 42.2 42.3 28.7 47.5

November 11, 2009
2QFY10 Financial Results (Consolidated)

Descriptions 2QFY10 2QFY09 YoY 1HFY10 1HFY09 YoY
Gross Turnover 49,549 50,352 -1.6 92,097 98,037 -6.1
Carbon Credit 602 - - 602 - -
Excise Duty 2,854 3,511 -18.7 5,501 6,634 -17.1
Net Turnover 47,297 46,841 1.0 87,199 91,403 -4.6
Other Operating Income 268 27 890.0 504 260 94.1
Total Income 47,565 46,868 1.5 87,703 91,662 -4.3
Expenditure
Variation-in-Stock -87 -6,346 -98.6 -730 -12,081 -94.0
Consumption of Raw Materials 27,695 31,285 -11.5 53,571 59,773 -10.4
Power and Fuel 2,569 2,120 21.2 4,962 4,126 20.3
Employees Cost 1,217 1,517 -19.7 2,363 3,023 -21.8
Other Expenses 5,418 6,271 -13.6 9,899 12,718 -22.2
EBITDA 10,753 12,022 -10.6 17,637 24,104 -26.8

EBITDA Margin (%) 22.6 25.7 -3.0 20.1 26.3 -6.2
Depreciation 3,255 2,369 37.4 6,421 4,568 40.6
Other Income 13 - - 11 44 -73.9
PBIT 7,511 9,653 -22.2 11,227 19,580 -42.7
Interest & Finance Charges 3,019 2,788 8.3 6,003 5,136 16.9
Exchange Loss/(Gain) - 2,643 -100.0 -2,399 6,334 -137.9
PBT 4,491 4,222 6.4 7,623 8,110 -6.0
Tax 1,367 1,647 -17.0 2,337 3,007 -22.3
Net Profit after Tax 3,124 2,575 21.3 5,286 5,103 3.6
Minority Interest -103 74 -239.1 -282 138 -304.5
Net Profit after MI 3,228 2,524 27.9 5,568 5,027 10.8
Share Capital 1,871 1,871 - 1,871 1,871 -
Basic EPS (INR) 17.3 13.5 27.9 29.8 26.9 10.8

November 11, 2009
Financials
Profit & Loss Statement (Consolidated)
Descriptions (INR Mn) FY2006 FY2007 FY2008 FY2009 FY2010E FY2011E
Net Turnover 62,071 85,709 131,924 160,277 194,783 243,726
Other Operating Income 3,877 1,287 739 1,778 1,199 1,960
Total Income 65,947 86,996 132,663 162,056 195,982 245,686
Expenditure
Variation-in-Stock -1,393 665 -4,564 -3,662 -730 -
Consumption of Raw Materials 31,191 39,634 70,632 99,855 114,369 137,911
Power and Fuel 4,202 3,931 6,246 8,038 10,552 12,370
Employees Cost 1,162 1,755 4,167 5,186 5,010 5,736
Other Expenses 10,029 11,791 19,516 20,148 20,971 25,874
Total Expenditure 45,191 57,776 95,996 129,565 150,173 181,890
EBITDA 16,880 27,933 35,928 32,491 45,809 63,795

EBITDA Margin (%) 27.2 32.6 27.2 20.3 23.5 26.2
Depreciation 4,058 4,982 7,896 9,878 13,071 13,848
Other Income - - - 44 31 60
PBIT 16,698 23,147 30,161 22,657 32,769 50,008
Interest & Finance Charges 3,687 3,995 6,295 11,556 11,988 12,390
Exceptional Items - - -2,038 7,948 -2,399 -
PBT 13,011 19,152 25,904 3,153 23,181 37,618
Tax 4,446 6,232 8,411 726 7,287 11,981
Net Profit after Tax 8,565 12,920 17,493 2,427 15,894 25,637
Minority Interest - - 184 -322 -429 -252
Net Profit after MI 8,565 12,920 17,309 2,749 16,323 25,889
Share Capital 1,570 1,640 1,871 1,871 1,871 1,871
Basic EPS (INR) 54.6 81.2 92.5 14.7 87.3 138.4

November 11, 2009
National Aluminium Co Limited

Ratings • Results significantly below our expectations, plunge in
CMP 379 Recommendation SELL aluminium and alumina prices resulted in 64% YoY drop
Target 235 Risk MEDIUM
in PAT
Bloomberg Consensus • Considering government’s disinvestment plans, NALCO
(BUY/HOLD/SELL) 01 / 06 / 29 IPO may not be far away
• Retain ‘SELL’ with TP of Rs 235, 35% lower from CMP
16,441 4,882 15,057 NALCO’s performance during the quarter was very dismal
Codes considering 577 bps QoQ decline in EBITDA margin despite
BSE NSE Bloomberg Reuters 21% improvement in LME prices and stable currency. Robust
532234 NATIONALU NACL IB NALU.BO 39% jump in sequential other income and substantial
reduction in effective tax rate from 24.1% to 22.1% enabled the
Sensex NALCO
company to post 26% QoQ increase in PAT. The company has
52 Wk: Hi/Lo 17,493/8,047 396 / 141
Life High 21,207-Jan 08 566-May 08 recently completed its capacity expansion across the units by
P/E 20.90 41.50 ~ 33%, which would result in strong volume growth going
P/BV 3.93 2.50 forward.
Dividend Yield (%) 1.17 1.32 2QFY10 Results Highlights
Mkt Cap (INR Mn) 56,688,748 244,097
Equity (INR Mn) - 6,443 Massive 28% YoY drop in aluminium INR prices led to
* - TTM standalone basis Capitaline 25% dip in net sales to Rs 11,431 mn. Aluminium and
alumina segment reported 16% and 33% drop in revenue,
Share Holding Pattern % Jun-09 Sept-09 while power segment revenue jumped 99% YoY.
Foreign 4.21 4.28
Lower realization along with higher power fuel cost led to
Corporate 2.67 2.65
deep cut in EBITDA margin to 12.4% from 44.0% in
Government 87.15 87.15 2QFY09, which resulted in colossal 79% YoY decline in
Public & Others 0.75 0.71 EBITDA to Rs 3,731 mn.
Alumina EBIT plummeted 72% YoY to Rs 794 mn, while
aluminium EBIT turned negative to Rs 923 mn compared
1 Month 10.88 12.49 5.49
to profit of Rs 3,702 mn. The power segment EBIT turned
3 Months 25.36 13.83 -3.55 positive to Rs 1,084 mn compared to loss of Rs 119 mn.
1 Year 112.16 53.16 -60.90 Despite other income jump of 69% and lower tax rate on
account of tax written back to the tune of Rs 280 mn, PAT
sank 64% YoY to Rs 1,595 mn.
Relative Price Performance
Valuation
250 NALCO Sensex
NALCO is currently trading at a P/E of 35.7x & 18.7x and
EV/EBITDA of 24.8x & 10.7x for FY10 and FY11 respectively.
We retain our ‘SELL’ rating in view of current stretched
200
valuations with target price of Rs 235 (earlier Rs 255) despite
being positive on company business fundamental. We also
150
believe, stock may find support at current prices in near term
considering the surrounding talk of PSUs disinvestment.
Financial Summary
100 (INR Mn) FY07 FY08 FY09 FY10E FY11E
Net Sales 59,525 50,109 50,940 45,270 53,640
EBITDA 35,419 23,521 17,896 7,677 16,883
50
Profit 23,814 16,315 12,723 6,458 12,332
EPS (INR) 37.0 25.8 19.7 10.0 19.1

November 11, 2009
Change in Earning Estimates We have revised our estimates downwards for FY10 & FY11 by
factoring current quarter performance.
FY2010 FY2011 FY2010 FY2011 FY2010 FY2011
Net Sales 44,692 52,695 45,270 53,640 1.3 1.8
EBITDA 12,553 18,814 7,677 16,883 -38.8 -10.3
Profit after MI 8,679 12,856 6,458 12,332 -25.6 -4.1
Change in accounting treatment of The company has changed the accounting treatment of inter-segment
inter-segment transfer transfer from this quarter. Alumina has been considered at a price
calculated based on average export sales realization during the period
less freight or cost plus fixed percentage of return on investment in
gross fixed assets @ 15.5%, which ever is lower. Similarly, for
electricity, the average sale price to GRIDCO or cost plus a fixed
percentage of return on investment in gross fixed assets @ 15.5% as
per CERC guidelines, which ever is lower has been considered for
segment revenue and segment Results. Earlier the segment transfers
were considered at average export sales realization less freight for
alumina and average sale price to GRIDCO for electricity.
Segment Revenues Segment PBIT
The company has seen improvement in aluminium Alumina and power segment reported improvement
and alumina segments revenue on back of in sequential EBIT, while aluminium segment EBIT
enhancement in LME aluminium prices, while power further deteriorated from sequential quarter,
segment has seen improvement due to change in partially on back of change in accounting treatment
accounting treatment. of inter-segment transfer.
Alumina Aluminium Power Alumina Aluminium Power

12,000 (INR Mn) 4,500 (INR Mn)
9,000 3,000
6,000 1,500
3,000 0
0 -1,500
Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09

November 11, 2009
Average LME Aluminium & EBIT Margin Alumina EBIT
Despite improvement in aluminium prices, EBIT After seeing massive deterioration in alumina segment
margin decline from sequential quarter due to change EBIT margin, there is a steady improvement in margin
in accounting treatment. during last quarter.
Aluminium Price Alum. EBIT Margin (RHS) 80 (%)
125,000 (INR/Tonne) (%) 45
65
110,000 30
50
95,000 15
80,000 0 35
65,000 -15 20
50,000 -30 5
Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09

Gross Turnover 11,992 16,759 -28.4 21,697 32,823 -33.9
Excise Duty 562 1,395 -59.7 1,051 2,784 -62.3
Net Turnover 11,431 15,364 -25.6 20,646 30,039 -31.3
Other Operating Income 361 351 2.7 498 653 -23.7
Other Income 1,402 830 68.9 2,414 1,790 34.8
Total Income 13,193 16,545 -20.3 23,558 32,482 -27.5
Expenditure
Variation in Stock -302 -81 272.7 -907 -445 103.5
Consumption of Raw Materials 2,011 1,739 15.6 3,870 3,293 17.5
Power and Fuel 4,845 3,974 21.9 7,697 6,699 14.9
Employees Cost 1,800 1,579 14.0 3,486 3,109 12.1
Repair Maintenance & Other Mfg Expenses 1,253 955 31.3 2,360 2,141 10.2
Other Expenses 767 791 -3.0 1,548 1,466 5.6
EBITDA 1,417 6,759 -79.0 3,091 14,429 -78.6
EBITDA Margin (%) 12.4 44.0 -31.6 30.6 96.3 -65.7
Depreciation 764 696 9.8 1,521 1,375 10.6
PBIT 2,054 6,893 -70.2 3,984 14,844 -73.2
Interest & Finance Charges 8 1 0.0 19 5 0.0
PBT 2,046 6,892 -70.3 3,965 14,840 -73.3
Total Tax 451 2,447 -81.6 1,105 5,142 -78.5
Net Profit After Tax 1,595 4,445 -64.1 2,859 9,698 -70.5

November 11, 2009
Financials
Gross Turnover 65,269 54,965 55,170 47,892 57,064
Excise Duty 5,743 4,857 4,230 2,622 3,424
Net Turnover 59,525 50,109 50,940 45,270 53,640
Other Operating Income 0 1,419 1,227 1,098 1,200
Other Income 4,017 4,225 4,001 5,069 5,933
Total Income 63,542 55,752 56,168 51,437 60,773
Expenditure
Variation in Stock -151 -219 -854 -907 -
Power and Fuel 8,510 9,947 13,116 16,698 13,431
Employees Cost 3,929 5,530 7,711 7,206 7,540
Repair Maintenance & Other Mfg Expenses 2,303 2,315 2,505 5,015 5,787
Other Expenses 3,939 4,689 4,825 3,174 3,348
EBITDA 35,419 23,521 17,896 7,677 16,883

EBITDA Margin (%) 59.5 46.9 35.1 17.0 31.5
Depreciation 3,171 2,811 2,724 3,290 4,094
PBIT 36,264 24,935 19,173 9,456 18,722
Interest & Finance Charges 0 15 40 39 40
PBT 36,204 24,666 19,272 9,417 18,682
Total Tax 12,390 8,351 6,549 2,958 6,350
Net Profit after Tax 23,814 16,315 12,723 6,458 12,332
Share Capital 6,443 6,443 6,443 6,443 6,443
Basic EPS (INR) 37.0 25.8 19.7 10.0 19.1

November 11, 2009
Sesa Goa Limited

Ratings • Results broadly in line with expectations; however, PAT
CMP 330 Recommendation REDUCE down 51% on back of 48% drop in iron ore realization
Target 298 Risk MEDIUM
• Target in intact to reach 50 MT volume in three years
Bloomberg Consensus
• Likely to see strong volume growth in 2HFY10 following
(BUY/HOLD/SELL) 03 / 11 / 19
ramp up in Dempo mines
Sensex Nifty BSE Metals • Retain ‘REDUCE’ with revised TP of Rs 298, 6% downside
16,441 4,882 15,057 from CMP
Codes
BSE NSE Bloomberg Reuters
SGL reported 17% YoY growth in iron ore volumes to 1.62
500295 SESAGOA SESA IB SESA.BO MT; however, this was more than offset by 48% YoY drop in
iron ore realization. Although, the realizations have improved
Sensex Sesa Goa sequentially, it is more on account of higher proportion of
52 Wk: Hi/Lo 17,196/7,697 363/60 high grade ore from Karnataka and Orissa. During the
Life High 21,207-Jan 08 363-Oct 09 quarter, SGL raised $500 mn through FCCBs, where $125 mn
P/E 20.90 17.51
would be utilized towards pig iron plant expansion. SGL has
P/BV 3.93 5.36
Dividend Yield (%) 1.17 0.65
also received shareholder nod to raise another ~ Rs 35 bn
Mkt Cap (INR Mn) 56,688,748 270,724 indicating large expansions underway.
Equity (INR Mn) - 821 2QFY10 Results Highlights
Decline in iron ore realization resulted in 38% YoY drop in
Share Holding Pattern % Jun-09 Sept-09 total income to Rs 5,387 mn.
Foreign 22.59 23.26 Lower realization coupled with higher royalty led to
massive erosion in EBITDA margin to 28.3% from 48.0%
Corporate 3.02 1.67
during corresponding quarter last year and therefore
Public & Others 14.89 13.04 EBITDA was down 64% YoY to Rs 1,527 mn.
Depreciation surged 73% to Rs 202 mn on account of
Returns % Abs Relative to inclusion of Dempo operations, while other income
moved up 96% to Rs 752 mn on back of strong cash
1 Month 17.33 18.94 11.94
3 Months 53.84 42.31 24.93
reserve and dividend income during the quarter.
1 Year 313.62 254.62 140.55 Aforesaid factors coupled with reduction in effective tax
rate from 25.2% to 22.9% helped the company restrict net
profit decline at 51% YoY to Rs 1,665 mn.
Valuation
500 NALCO Sensex
SGL is currently trading at P/E of 14.0x and 9.1x and
400 We retain our REDUCE rating, while revising our target
prices from Rs 310 to Rs 298 after adjusting estimate change.
300
However, the management has purchased 3.95% stake
through creeping acquisition and it may continue in the
future also, which risk our recommendation.
200
100
Net Sales 22,179 38,227 49,591 50,212 70,475
EBITDA 9,628 23,032 25,421 21,060 32,365
0
Profit after MI 6,461 15,416 19,881 18,803 29,117
EPS (INR) 8.2 19.6 25.3 22.9 35.5

November 11, 2009
Change in Earning Estimates We have changed our FY10 and FY11 estimates after factoring current
quarter number, change in tax assumption, inclusion of FCCB, change
in royalty and pig iron plant capex.

FY2010 FY2011 FY2010 FY2011 FY2010 FY2011
Net Sales 53,291 69,619 50,212 70,475 -5.8 1.2
EBITDA 23,375 32,890 21,060 32,365 -9.9 -1.6
Profit after MI 20,404 30,121 18,803 29,117 -7.8 -3.3
Pig iron plant Capex The company has announced expansion of pig iron plant from 0.25 MT
to 0.63 MT along with expansion of the metallurgical coke plant and a
sinter plant. The company will also set up a new waste heat recovery
power plant as a part of this expansion programme. The plant is likely
to commission by Jun’11 with the estimated cost of $125 mn.
Pig Iron division Pig iron volume jumped 10% YoY, which was more than offset with
41% drop in realization and resulted in 34% YoY decline in net revenue.
However, lower realization was largely offset with decline in raw
material cost and therefore PBIT was just 8% lower from corresponding
quarter last year.
Met Coke division Met coke volume witnessed 7% YoY decline during this quarter, which
coupled with 53% drop in realization led to 56% decline in net revenue.
Lower realization coupled with higher coking coal cost resulted in PBIT
falling into negative territory compare to profit of Rs 1,101 mn during
corresponding quarter last year. Effective coking coal prices were higher
than headline prices due to carry over tonnage of last year.
Gigantic plan in the offing The company has medium term plan to reach 50 MT output, which
would require large amount of reserves to the tune of over 500 MT. SGL
is looking at organic as well as inorganic opportunities in the iron ore
space in domestic as well as overseas market. The large amount of fund
raising indicates the same and company is not averse to value addition
also in the form of steel making.

November 11, 2009
Iron Ore Volumes Iron Ore Realization & PBIT/tonne
SGL has been able to improve volume YoY due to Although the realization improved sequentially,
ramp up in existing operation; however, this quarter PBIT/tonne remain lower due to higher cost of
volumes are seasonality affected. Karnataka and Orissa operation.
6.0 (MT) 5,000 (INR/Tonne) Realization EBIT
4,000
4.5
3,000
3.0
2,000
1.5
1,000
0.0 0
Jun-07 Mar-08 Dec-08 Sep-09 Jun-07 Mar-08 Dec-08 Sep-09
Met Coke Volumes and Realization & PBIT/tonne Pig Iron Volumes and Realization & PBIT/tonne
Lower realization coupled with higher raw material Stable volume along with marginal improvement in
cost and lower volume resulted in negative PBIT for realization and lower cost helped the division to
met coke division. restore normal profitability.
Realization EBIT Volume (RHS) Realization EBIT Volume (RHS)

30,000 (INR/Tonne) (Tonne) 78,000 36,000 (INR/Tonne) (Tonne) 78,000
30,000
24,000 65,000 65,000
24,000
18,000 52,000 52,000
18,000
12,000 39,000 39,000
12,000
6,000 26,000 26,000

6,000
0 13,000 13,000
0
-6,000 0 -6,000 0
Jun-07 Mar-08 Dec-08 Sep-09 Jun-07 Mar-08 Dec-08 Sep-09

November 11, 2009

(INR Mn) Sep-09 Sep-08 % Gwth Sep-09 Sep-08 % Gwth
Income from Operation 5,387 8,757 -38.5 15,502 21,557 -28.1
Expenditure
Stock Adjustment -1,566 -1,103 42.1 -1,386 -1,985 -30.2
Raw Material Consumed 881 657 34.0 1,695 1,134 49.5
Purchase of Finished Goods 557 605 -7.9 830 1,350 -38.5
Employee Expenses 334 216 54.8 729 501 45.3
Consumption of stores 526 387 36.0 1,061 782 35.7
Contractors for inland transportation & other ser.
Inland transportation 1,577 2,116 -25.5 3,839 4,252 -9.7
Other services 729 689 5.8 1,387 1,453 -4.5
Export Duty 47 736 -93.7 86 1,296 -93.4
Other Expenses 777 250 211.4 1,204 519 131.9
Total Expenditure 3,860 4,552 -15.2 9,444 9,302 1.5
EBITDA 1,527 4,205 -63.7 6,058 12,256 -50.6

EBITDA Margin (%) 28.3 48.0 -19.7 41.9% 51.3% -9.3
Depreciation 202 117 73.5 354 233 52.2
PBIT 1,325 4,088 -67.6 5,704 12,023 -52.6
Other Income 893 455 96.4 1,644 1,066 54.3
Interest 20 0 - 40 1 7920.0
PBT 2,198 4,543 -51.6 7,308 13,088 -44.2
Total Tax 503 1,145 -56.0 1,373 3,330 -58.8
Reported PAT 1,694 3,398 -50.1 5,935 9,758 -39.2
Minority Interest 30 32 -6.3 30 62 -51.5
PAT after MI 1,665 3,366 -50.5 5,906 9,697 -39.1

November 11, 2009
Financials
Income from Operation 22,179 38,227 49,591 50,212 70,475
Total Expenditure
Total Manufacturing Cost 12,216 13,603 22,014 28,924 37,823
Export Duty 335 1,591 2,156 227 286
EBITDA 9,628 23,032 25,421 21,060 32,365

EBITDA Margin (%) 43.9 60.3 51.3 41.9 45.9
Depreciation 393 500 517 822 938
PBIT 9,236 22,533 24,904 20,238 31,427
Other Income 451 744 2,240 3,463 5,342
Interest 30 28 43 665 1,260
PBT 9,657 23,249 27,102 23,036 35,509
Total Tax 3,147 7,760 7,153 4,204 6,392
Reported PAT 6,510 15,489 19,949 18,832 29,117
Minority Interest 49 74 68 30 0
PAT after MI 6,461 15,416 19,881 18,803 29,117
Equity Capital 787 787 787 820 820
EPS (INR) 8.2 19.6 25.3 22.9 35.5

November 11, 2009
Steel Authority of India Limited

Ratings • Results broadly in line with expectation, lower realization
CMP 176 Recommendation BUY led to 17% YoY drop in PAT, up 25% QoQ
• On track to double the steel capacity by FY12, 1HFY10
Bloomberg Consensus capex stood at Rs 49,200 mn compared to full year target
(BUY/HOLD/SELL) 10 / 16 / 14 of Rs 100,000 mn
• Retain ‘BUY’ with TP of Rs 200, 21% upside from CMP
SAIL has done reasonable on operational front with 14%
16,441 4,882 15,057
Codes
higher volume to 3.0 MT and 15% increase in value added
BSE NSE Bloomberg Reuters production to 1.2 MT. The company has been able to improve
500113 SAIL SAIL IB SAIL.BO EBITDA/tonne to Rs 8,035/tonne from Rs 6,770/tonne during
1QFY10. The EBITDA/tonne would remain stable with
Sensex SAIL upward bias in coming quarters on back of improvement in
52 Wk: Hi/Lo 17,493/8,047 198/55 long products demand post monsoon and stable flat steel
Life High 21,207-Jan 08 293-Dec 07
demand. The finance ministry has allowed SAIL to go for 20%
P/E 20.90 13.68
FPO in two phases, where half would be fresh capital and
P/BV 3.93 2.60
Dividend Yield (%) 1.17 1.48
remaining would be offer for sale. The expansion of steel
Mkt Cap (INR Mn) 56,688,748 726,537 facility and scouting for raw material is also moving at a
Equity (INR Mn) - 41,304 greater speed.
* - TTM standalone basis Capitaline 2QFY10 Results Highlights
Lower realization to the tune of 28% entirely offset robust
Share Holding Pattern % Jun-09 Sept-09
Foreign 3.91 4.25
14% YoY volume growth and resulted in 17% YoY drop in
Institutions 7.61 7.48 net sales to Rs 101,855 mn.
Corporate 0.56 0.47 Lower realization was largely offset with modest decline
Government 85.82 85.82 in raw material cost and substantial drop of 64% in
Public & Others 2.10 1.99 employee cost due to higher sixth pay commission
provisioning in earlier quarters, which restricted EBITDA
margin erosion at just 94 bps, however, EBITDA was
1 Month 2.20 3.81 -3.18 down 20% YoY to Rs 24,105 mn.
3 Months 9.06 -2.47 -19.85 Strong cash reserve helped the company to post 29% YoY
1 Year 106.26 47.26 -66.81 jump in interest income to Rs 5,141 mn, while higher
borrowing led to 55% surge in interest cost to Rs 735 mn.
Relative Price Performance Aforesaid factors resulted in 17% YoY growth in PAT to
Rs 16,635 mn, nevertheless, steady improvement in
250 SAIL Sensex realization and modest cost reduction sequentially
enabled 25% growth in PAT.
Valuation
200
SAIL is currently trading at P/E of 9.3x & 7.9x and
EV/EBITDA multiple of 5.7x and 4.9x for FY10 and FY11
150
respectively. We retain ‘BUY’ rating while revising our TP to
Rs 200 (earlier Rs 205) factoring in change in estimate.
Financial Summary
Net Sales 350,262 402,159 442,084 419,262 471,170
EBITDA 101,275 113,390 90,235 106,529 131,166
50
Profit after MI 62,023 75,369 61,748 72,868 85,892
EPS (INR) 15.0 18.2 14.9 17.6 20.8

November 11, 2009
Change in Earning Estimates We have revised our estimates downwards for FY10 & FY11 by
factoring current quarter performance and weakness in steel prices for
next quarter.
FY2010 FY2011 FY2010 FY2011 FY2010 FY2011
Net Sales 432,011 469,011 419,262 471,170 -3.0 0.5
EBITDA 117,410 133,356 106,529 131,166 -9.3 -1.6
Profit after MI 79,471 87,036 72,868 85,892 -8.3 -1.3
Raw Material Securities Update SAIL has received all statutory clearances for Rowghat mine at
Chhattisgarh and lease deed agreement has been signed in last
fortnight, an issue which was pending for more than two decades. This
will provide iron ore security to Bhilai Plant for next 30 years.
Regarding Chiria/Gua mines, there has been a major positive
development with the Jharkhand government conveying its ‘in-
principle’ approval for renewal of the biggest of Chiria/Gua iron ore
leases with a reserve of about 810 MT of iron ore (area 823.8 hectares).
The company has further requested the Jharkhand government to
renew additional leases of Chiria/Gua to meet the company’s iron ore
requirements for its growth plan in the broader national interest.
SAIL is also developing two new coking coal blocks at Sitanala and
Tasra for its captive use. Environment clearance for Tasra block of 4
MTPA capacity has been received in Oct’09 and the company is
targeting to start some mining operations in the next few months.
Blended Realization, Cost & EBITDA
EBITDA/tonne has seen sizeable improvement due to lower employee

cost marginal improvement in realization, which would continue in
future also on back of stable cost and better realization.
Realization Cost EBITDA (RHS)
43,000 10,200
36,000 8,400
29,000 6,600
22,000 4,800
15,000 3,000
Jun-06 Jun-07 Jun-08 Jun-09
Source: Khandwala Research; Company

November 11, 2009

Gross Sales/ Income from Operations 107,296 135,442 -20.8 204,763 257,277 -20.4
Less: Excise Duty 7,857 15,958 -50.8 15,818 30,570 -48.3
Net Sales / Income from Operations 101,855 122,386 -16.8 194,514 232,300 -16.3
Interest Earned 5,141 3,984 29.0 10,475 7,884 32.9
Other Income 222 240 -7.8 288 266 8.1
Total Income 107,218 126,610 -15.3 205,276 240,450 -14.6
Expenditure
Inc (-)/Dec in Stock-in-Trade 3,952 -11,422 -134.6 4,873 -13,265 -136.7
Consumption of Raw Materials 38,804 45,269 -14.3 79,077 78,763 0.4
Purchase of Traded Goods 7 43 -83.3 7 50 -85.5
Staff Cost 11,278 31,033 -63.7 21,987 53,187 -58.7
Consumption of Stores & Spares 7,093 8,423 -15.8 13,623 16,412 -17.0
Power & Fuel 8,770 8,578 2.2 16,917 16,370 3.3
Other Expenditure 8,067 10,346 -22.0 15,390 22,933 -32.9
EBITDA 24,105 30,115 -20.0 42,927 57,851 -25.8

EBITDA Margin (%) 23.7 24.6 -0.9 22.1 24.9 -2.8
Depreciation 3,322 3,194 4.0 6,591 6,359 3.6
PBIT 25,924 31,145 -16.8 46,810 59,641 -21.5
Interest 735 475 54.6 1,563 1,043 49.8
Profit Before tax 25,189 30,670 -17.9 45,248 58,598 -22.8
Tax Expenses 8,554 10,574 -19.1 15,352 20,150 -23.8

November 11, 2009
Financials
Net Sales / Income from Operations 350,262 402,159 442,084 419,262 471,170
Interest Earned 7,526 11,848 18,290 20,972 16,609
Other Income 866 1,181 734 688 1,000
Total Income 358,654 415,187 461,108 440,921 488,779
Expenditure
Increase(-)/Decrease in stock-in-trade -2,426 -3,376 -19,345 4,873 -
Purchase of Traded Goods 13 36 68 47 80
Staff Cost 50,842 79,190 84,015 51,987 70,000
Consumption Of Stores & Spares 26,016 28,644 30,211 28,797 30,555
Power & Fuel 25,753 28,223 31,146 35,210 36,556
Other Expenditure 26,182 29,762 38,388 32,554 34,455
EBITDA 101,275 113,390 90,235 106,529 131,166

EBITDA Margin (%) 28.9 28.2 20.4 25.4 27.8
Depreciation 12,115 12,355 12,851 13,652 14,578
PBIT 97,552 114,064 96,407 113,848 134,197
Interest 3,321 2,509 2,532 3,491 3,463
Profit Before Tax 94,231 111,555 93,874 110,357 130,734
Exceptional Item - -3,133 -160 - -
PBT After Exceptional Item 94,231 114,687 94,035 110,357 130,734
Tax Expenses 32,208 39,318 32,286 37,489 44,842
Net Profit After Tax 62,023 75,369 61,748 72,868 85,892
Share Capital 41,304 41,304 41,304 41,304 41,304
EPS (INR) 15.0 18.2 14.9 17.6 20.8

November 11, 2009
Sterlite Industries (India) Limited

Ratings • Results broadly inline with our expectation, lower
CMP 806 Recommendation BUY realization led to 25% YoY drop in PAT, up 43% QoQ
• Strong surge in non-ferrous metal prices coupled with
Bloomberg Consensus higher volume in zinc and commissioning of SEL power
(BUY/HOLD/SELL) plant would improve the profitability in coming quarters
• We maintain our estimates and Recommend ‘BUY’ with
16,441 4,882 15,057
same TP of Rs 886, 19% upside from CMP
Codes The company has performed reasonably well on the
BSE NSE Bloomberg Reuters operational front, where copper and zinc volume remained
500900 STER STLT IB STRL.BO higher from corresponding quarter last year, while
aluminium production was down deliberately due to ramp
Sensex Sterlite
down of higher cost BALCO – I smelter. This quarter revenue
52 Wk: Hi/Lo 17,493/8,047 880/195
Life High 21,207-Jan 08 1,140-Dec 07 & profitability was adversely affected due to 24% and 35%
P/E 20.90 99.83 drop in average LME copper and aluminium realization,
P/BV 3.93 4.81 however, stable zinc and lead prices along with 11% INR
Dividend Yield (%) 1.17 0.37 depreciation were able to mitigate some of the impact. Going
Mkt Cap (INR Mn) 56,688,748 677,068 forward, SIIL is likely to witness very robust quarters due to
Equity (INR Mn) - 1,681 strong surge in LME prices from last quarter average coupled
with full benefit of HZL expansion and commissioning of
Share Holding Pattern % Jun-09 Sept-09
SEL’s 2,400 ME power plant. The company is currently sitting
Foreign 20.02 30.99 with over Rs 240 bn of cash, which the company plan to
Institutions 7.43 7.63 utilized in HZL and BALCO call option, power & copper
Corporate 4.28 3.95 segment expansion and ASARCO acquisition.
2QFY10 Results Highlights
Public & Others 6.58 5.41
Lower metal prices & drop in aluminium volume offset
Returns % Abs Relative to the effect of higher volume of zinc & copper and led to 8%
Perf Sensex BSE Metals YoY drop in net sales to Rs 60,855 mn.
1 Month 6.90 8.51 1.51
Lower prices resulted in sizeable 492 bps erosion in
3 Months 39.26 27.73 10.35
1 Year 211.17 152.17 38.10
EBITDA margin to 22.3% and therefore EBITDA was
down 26% YoY to Rs 13,654 mn. However, EBITDA was
up 34% sequentially on back of improved realization.
Relative Price Performance PAT after minority interest was down 25% YoY to Rs
325 Sterlite Inds Sensex 9,589 mn, while sequentially profit was up 43%.
Valuation
SIIL is currently trading at P/E of 16.3x and 11.7x and
250
We recommend ‘BUY’ (from ‘ADD’) as the stock has corrected
in last couple of week, while keeping our target prices same at
175
Rs 886.
Net Sales 243,868 247,054 211,455 226,118 281,902
EBITDA 94,589 79,212 51,182 54,525 78,727
25
Profit after MI 43,862 43,995 35,400 38,085 53,055
EPS (INR) 78.5 62.1 50.0 45.8 63.8

November 11, 2009
2QFY10 Segment Highlights
Copper Segment Copper cathode production was 12% YoY higher at 91,258 tonne, while
copper rods production was down by 9% to 53,271 tonne. The mined
metal production at Australian mine was down 7% YoY to 5,235 tonne
due to unprecedented rainfall in Aug’09, However, the mine has
resumed production thereafter and is progressively expected to attain
rated capacity. Phosphoric acid and sulphuric acid production stood at
54,414 tonne and 270,359 tonne, an increase of 10% and 1% YoY
respectively.
Copper rods volume was down by 9% to 52,425 tonne, while copper
cathode volume witnessed robust jump of 63% YoY to 37,136 tonne.
Phosphoric acid volume jumped 21% to 59,773 tonne, while sulphuric
acid volume witnessed 5% drop to 119,879 tonne.
Revenues during the quarter were 5% down to Rs 35,640 mn, while
EBITDA took a massive knock of 61% YoY to Rs 1,790 mn. The decrease
in profitability was primarily on account of sharp reduction in acid
realizations as sulphuric acid and phosphoric acid prices declined by
96% and 76% YoY respectively during first half.
Aluminium Segment The BALCO - II smelter continued to operate at higher than its rated
capacity, while the company fully ramped down the high cost BALCO -
I smelter. As a result, aluminium production was 30% down at 63,892
tonne during the quarter. However, the company continues to sell
surplus power from BALCO - I CPP in the commercial market.
Lower volume coupled with 35% plunge in average LME prices
resulted in 46% YoY drop in revenues at Rs 6,290 mn. These factors led
to 59% decline in EBIDTA during the quarter. The continuous effort of
cost control have yielded in positive impact on the unit cost of
production (CoP) at BALCO - II, which reduced to $1,347/tonne in first
half compared with $1,796/tonne in the corresponding prior period.
Zinc & Lead Segment Zinc and lead mined metal production was stable at 192,517 tonne in
line with the rated capacity, while zinc and lead refined metal
production was 14% higher at 1,52,226 tonne during the quarter. The
company sold 22,359 dry metric tonne of surplus zinc and 21,057 dry
metric tonne of surplus lead concentrate also during the quarter. the
company reported robust 40% jump in saleable silver production at
30,324 kg, primarily on account of higher silver content in the mined ore
and higher recovery.
Stable zinc and lead prices along with INR depreciation largely
mitigated the effect of lower by-product realization and led to 3% rise in
revenues to Rs 17,680 mn and 10% jump in EBITDA to 10,530 mn.
Power Segment The company sold 388 mn units compared with 287 mn units during
1QFY10. However, 32% drop in average per unit resulted in 9% and
22% drop in revenue and EBITDA to Rs 1,240 mn and 800 mn
respectively.

November 11, 2009
Expansion Projects
Copper Segment The company recently announced a 400,000 tonne brownfield copper
smelter expansion project at Tuticorin along with an associated 160 MW
captive power plant project, at a estimated cost of Rs 23,000 mn. The
project is expected to be commissioned by mid CY2011.
Aluminium Segment BALCO

Construction activity of the new 325,000 tonne aluminium smelter is
progressing well and the project is on schedule for first metal tapping
from Oct’10. However, construction at the 1,200MW captive power
plant project site has been disrupted following a tragic collapse of a
chimney under-construction, nevertheless, the company doesn’t
anticipate a material delay in the progressive commissioning of the
power plant also.
VAL
The second phase of 250,000 tonne aluminium smelter of the 500,000
tonne Jharsuguda aluminium smelter is under commissioning for
completion by end FY10. Apart from this, the construction of the 1.25
MT Jharsuguda II aluminium smelter project consisting of four pot lines
is also progressing well with more than 70% of civil works completed.
The project is on schedule for first metal tapping from March 2010.
Besides this, Progress on the 600,000 tonne de-bottlenecking project and
the 3 MT alumina refinery expansion project at Lanjigarh is also on
schedule.
Zinc Segment The work at the 210,000 tonne zinc smelter and the 100,000 tonne lead
smelter projects at Rajpura Dariba are progressing well and are on
schedule for completion by mid-2010. Work at the mining projects at
Rampura Agucha, Sindesar Khurd and Kayar are also on schedule for
progressive commissioning from mid-2010 onwards.
Commercial Energy Segment Construction work on the 2,400 MW (4x600 MW) coal – based
independent thermal power plant at Jharsuguda is progressing well.
The first unit of 600 MW is expected to get commissioned in Q4FY10,
while the remaining units are expected to be progressively
commissioned by the end of CY2010.

November 11, 2009
Metal Production Other Income and Interest Cost
SIIL has shown stable performance in zinc-lead and Stable cash generation from operation and equity
copper segment in last couple of quarters, which is raising has helped the company to generate strong
likely to improve due to capacity addition and full other income, which would further improve after
utilization of current capacity. Aluminium recent ADS issue of over $1.5 bn. The interest cost has
production, after close down one smelter would remained more or less stable during last couple of
remain stable until new capacity comes in. quarters.
175 ('000s Tonne) Copper Aluminium Zinc & Lead 6,250 (INR Mn) Other Income Interest & Finance Charges
150 5,000
125 3,750
100 2,500
75 1,250
50 0
Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Jun-06 Jun-07 Jun-08 Jun-09
Average LME Aluminium & EBIT Margin Average LME Zinc & EBIT Margin
Although, aluminium prices have improved Zinc prices improvement has been able to deliver on
sequentially, the company has not been able to the EBIT margin as substantial improved can be seen
improve its aluminium EBIT due to fixed cost related from Dec’08 quarter, which is also likely to continue
to BALCO – I plant. considering strong prices and cost control at HZL.
LME Aluminium Prices EBIT Margin (RHS) LME Zinc Prices EBIT Margin (RHS)
(%) 60 195,000 (INR/Tonne) (%) 85
125,000 (INR/Tonne)
110,000 45 164,000 70
95,000 30 133,000 55
80,000 15 102,000 40
65,000 0 71,000 25
50,000 -15 40,000 10


November 11, 2009
2QFY10 Consolidated Financial Results

Net Turnover 60,855 65,938 -7.7 106,226 123,639 -14.1
Other Operational Income 436 2,173 -79.9 854 2,522 -66.2
Other Income 3,887 3,948 -1.5 7,671 7,624 0.6
Total Income 65,178 72,059 -9.5 114,750 133,435 -14.0
Variation in Stock -1,681 1,052 -259.8 -5,033 -102 4853.3

Consumption of Raw Materials 34,297 33,002 3.9 58,804 59,010 -0.3
Employees Cost 2,058 1,926 6.8 3,789 3,757 0.8
Power and Fuel 4,637 6,094 -23.9 9,308 10,932 -14.9
Other Expenses 8,327 7,514 10.8 16,350 15,425 6.0
EBITDA 13,654 18,523 -26.3 23,862 37,138 -35.7

EBITDA Margin (%) 22.3 27.2 -4.9 22.3 29.4 -7.2
Depreciation 1,734 1,667 4.0 3,470 3,321 4.5
PBIT 15,807 20,805 -24.0 28,063 41,440 -32.3
Interest & Finance Charges 576 581 -0.7 1,289 1,455 -11.4
Exceptional Items 234 100 134.2 234 100 134.2
PBT 14,997 20,124 -25.5 26,540 39,886 -33.5
Total Tax 2,593 2,916 -11.1 4,898 6,723 -27.1
Minority Interest 3,677 4,425 -16.9 6,897 8,895 -22.5
Profits of Associates 863 -14 - 1,570 13 -
Net Profit after tax attributable to Consolidated 9,589 12,770 -24.9 16,315 24,281 -32.8
Share Capital 1,681 1,417 18.6 1,681 1,417 18.6
Basic EPS (INR) 11.4 18.0 -36.7 19.4 34.3 -43.4

November 11, 2009
Tata Steel Limited

Ratings • Results marginally below expectations due to lower
CMP 505 Recommendation BUY blended realization compared to 1QFY10
• TSL India is on track to achieve over 20% growth
Bloomberg Consensus guidance; 21% jump in 1HFY10 volumes
(BUY/HOLD/SELL) 27 / 07 / 03 • Recommend ‘BUY’ with revised TP of Rs 605, 21% upside
from CMP
16,441 4,882 15,057 TSL surprisingly reported marginal 1.3% decline in net
Codes blended realization compared to sequential quarter. Long
BSE NSE Bloomberg Reuters products segment comprising ~40% of portfolio remain
500470 TATASTEEL TATA IB TISC.BO subdued during the quarter. The company has been able to
improve EBITDA/tonne from Rs 12,288 to Rs 13,195/tonne on
Sensex Tata Steel
back of reduction in raw material cost, mainly coking coal.
52 Wk: Hi/Lo 17,493/8,047 600/146
Steel prices locally as well as globally have been marginally
Life High 21,207-Jan 08 970-Oct 07
P/E 20.90 12.12
subdued over the last fortnight, which may remain for
P/BV 3.93 1.48 considering the dollar rebound expected by market in short
Dividend Yield (%) 1.17 2.61 term. Nevertheless, we believe, current correction should be
Mkt Cap (INR Mn) 56,688,748 447,819 utilized as a buying opportunity, since prospects for FY11
Equity (INR Mn) - 8,872 remain unchanged.
2QFY10 Standalone Results Highlights
Share Holding Pattern % Jun-09 Sept-09 Robust 21% volumes growth entirely offset by massive
Foreign 14.54 20.27 30% drop in net realization resulted in 17% YoY decline in
Institutions 23.46 23.07 net revenue to Rs 56,299 mn.
Corporate 3.50 3.14
Raw material cost decline was lower compared to fall in
Promoters 33.95 31.18 realization and led EBITDA margin nosedive to 33.8%
Public & Others 24.55 22.32 from 46.5% during corresponding quarter last year, and
therefore, EBITDA was down 40% YoY to Rs 19,222 mn.
Other income plunged 68% to Rs 761 mn, while interest
cost surged 54% to Rs 3,920 mn, therefore, PBT was down
1 Month -4.57 -2.96 -9.96
3 Months 17.42 5.89 -11.49 54% YoY to Rs 13,499 mn.
1 Year 152.15 93.16 -20.91 PAT drop stood at 49% YoY to Rs 9,029 mn due to
effective lower tax rate and forex loss of Rs 3,454 mn
during 2QFY09. However, EPS plummeted 58% YoY due
to 21% increase in equity capital on account of conversion
300 Tata Steel Sensex of preference capital and GDR issue.
Valuation
250 Tata Steel is trading at a consolidated P/E of 66.8x and 5.9x
and EV/EBITDA of 7.9x and 4.8x for FY10 and FY11
200 respectively. We recommend ‘BUY’, while lowering our TP
from Rs 626 to Rs 605 on back of change in earning estimates.
150 Financial Summary (Consolidated)
100
Net Sales 252,133 1,310,908 1,455,526 1,029,900 1,167,882
EBITDA 74,502 177,824 184,756 92,071 171,618
50
PAT 41,773 123,500 46,475 6,056 73,294
EPS (INR) 72.8 169.0 63.6 6.8 82.6

November 11, 2009
Change in Earning Estimates We have revised our estimates mainly arising from change in
standalone number due to lower than estimated realization. This has
marginally affected FY11 estimates also.

FY2010 FY2011 FY2010 FY2011 FY2010 FY2011
Net Sales 1,035,327 1,170,838 1,029,900 1,167,882 -0.5 -0.3
EBITDA 96,577 174,575 92,071 171,618 -4.7 -1.7
Profit after MI 8,439 74,486 6,056 73,294 -28.2 -1.6
2QFY10 Highlights
Operational Performance The company has achieved 21% growth in crude steel production to 1.64
MT, while saleable steel production jumped 22% to 1.52 MT during the
quarter. The company sold 1.46 MT of steel during 2QFY10.
Segmental Performance Steel business reported 12% drop in revenue to Rs 51,937 mn, while
ferro business registered 53% plunge in revenue to Rs 4,339 mn on back
of sharp fall in prices. Segment PBIT for steel and ferro division stood at
Rs 16,828 mn and Rs 718 mn, a decline of 31% and 87% respectively. The
ferro alloy prices have crashed from the highs witnessed during 2QFY09
and this has led to very dismal performance in ferro alloy division.
Other Highlights The Company has converted 547.3 mn Cumulative Convertible

Preference Shares (CCPS) of Rs 100 each into 91.2 mn equity shares of
Rs 10 each at a premium of Rs 590 per share. This coupled with GDR
issue to 65.4 mn share has resulted in equity capital rising by 21% from
Rs 7,308 mn to Rs 8,874 mn.
Tata Steel Limited and Mineral and Metal Trading Company Limited
(MMTC) have signed an agreement on October 22, 2009 to establish a
74:26 joint venture company for acquiring, development and operation
of mines and processing of minerals and metals.

November 11, 2009
Production and Volume Realization, Cost & EBITDA
TSL has seen tremendous improvement in production Realizations were down significantly in YoY terms;
and volume after commissioning of 1.8 MT capacity in however, it remained stable QoQ. This coupled with
Dec’08 quarter. This growth momentum is likely to decline in cost of production has improved the
continue next years which will get further boost from EBITDA/tonne during the quarter. EBITDA/tonne is
additional 3.2 MT capacity expected to commissioned likely to witness moderate improvement in view of
by end of FY11. lower input cost and stable steel prices.
2.0 (MT) Steel Production Steel Sales Blended Real Blended Cost EBITDA/Tonne (RHS)
1.7
45,000 21,000
1.4
30,000 14,000
1.1
15,000 7,000
0.8
0.5 0 0

November 11, 2009

(INR Mn) Sep-09 Sep-08 % Gwth Sep-09 Sep-08 % Gwth
Steel Production (Tonne) 1,519,000 1,329,565 14.2 3,061,380 2,516,438 21.7
Steel Sales (Tonne) 1,456,755 1,220,050 19.4 2,874,591 2,379,545 20.8
Net Sales/Income from Operations 56,299 67,442 -16.5 111,839 128,343 -12.9
Other Operating Income 623 1,065 -41.5 1,238 1,823 -32.1
Total Income 56,921 68,507 -16.9 113,077 130,166 -13.1
0 0
Expenditure
Increase/Decrease in Stock -375 -3,844 -90.2 81 -5,862 -101.4
Purchase of Goods 327 1,205 -72.8 606 2,370 -74.4
Raw Materials Consumed 14,265 13,818 3.2 29,587 24,049 23.0
Staff Cost 5,221 5,985 -12.8 10,283 10,704 -3.9
Purchase of Power 2,979 2,781 7.1 6,262 5,400 16.0
Freight and Handling 3,078 3,315 -7.1 6,231 6,356 -2.0
Other Expenditure 12,204 13,418 -9.0 23,383 25,066 -6.7
EBITDA 19,222 31,830 -39.6 36,645 62,084 -41.0

EBITDA Margin (%) 33.8 46.5 -12.7 32.4 47.7 -15.3
Depreciation 2,564 2,488 3.0 5,095 4,656 9.4
PBIT 16,659 29,342 -43.2 31,549 57,428 -45.1
Other Income 761 2,384 -68.1 1,224 2,497 -51.0
Interest (Net) 3,920 2,548 53.8 7,342 4,966 47.9
PBT 13,499 29,177 -53.7 25,431 54,960 -53.7
Total Exceptional Items - -3,454 - - -6,488 -
Profit before tax 13,499 25,723 -47.5 25,431 48,471 -47.5
Total Tax 4,470 7,845 -43.0 8,504 15,709 -45.9
Net Profit 9,029 17,878 -49.5 16,928 32,762 -48.3
Equity Capital 8,874 7,308 21.4 8,874 7,308 21.4
Basic EPS (INR) 10.2 24.5 -58.4 21.0 44.8 -53.2

November 11, 2009
Financials
Profit & Loss Statement (Standalone)
Net Sales/Income from Operations 175,511 194,809 240,245 247,039 276,700
Other Operating Income - 2,102 2,913 2,638 3,200
Total Income 175,511 196,910 243,158 249,677 279,900
Expenditure
Raw Materials Consumed 34,896 37,044 57,795 62,834 64,505
Staff Cost 14,548 18,160 23,058 22,983 23,800
Purchase of Power 9,217 9,328 10,914 13,572 14,606
Freight and Handling 11,175 11,406 12,512 13,711 15,075
EBITDA 69,733 80,138 91,334 87,173 108,584

EBITDA Margin (%) 39.7 40.7 37.6 34.9 38.8
Depreciation 8,193 8,346 9,734 10,445 11,200
PBIT 61,540 71,792 81,600 76,728 97,384
Other Income 4,337 2,428 3,083 1,884 1,540
Interest (Net) 1,739 7,865 11,527 14,492 14,150
PBT Before Exceptional Items 64,138 66,355 73,156 64,120 84,774
Exceptional Items -1,521 4,309 -6,488 - -
Total Tax 20,395 23,793 21,139 21,658 28,823
PAT 42,222 46,870 45,529 42,462 55,951

November 11, 2009
Profit & Loss Statement (Consolidated)

Net Sales/Income from Operations 252,133 1,310,908 1,455,526 1,029,900 1,167,882
Other Operating Income - 4,428 17,646 3,141 3,200
Total Income 256,505 1,315,336 1,473,172 1,033,040 1,171,082
Expenditure
Raw Materials Consumed 86,312 585,795 748,828 467,793 512,194
Staff Cost 18,870 168,996 178,889 157,806 152,008
Purchase of Power 13,154 49,293 59,582 41,270 46,059
Freight and Handling 15,084 60,385 60,320 49,979 54,947
Total Expenditure 177,632 1,137,512 1,288,415 940,969 999,463
EBITDA 74,502 177,824 184,756 92,071 171,618

EBITDA Margin (%) 29.5 13.6 12.7 8.9 14.7
Depreciation 10,110 41,370 42,654 41,604 43,600
PBIT 64,392 136,455 142,102 50,468 128,018
Other Income 4,381 4,759 2,657 4,960 3,540
Interest (Net) 4,112 40,854 32,902 30,875 27,395
PBT Before Exceptional Items 64,661 100,359 111,857 24,552 104,164
Exceptional Items -1,530 63,351 -47,459 -2,188 -
Profit Before Tax 63,130 163,711 64,398 22,364 104,164
Total Tax 21,474 40,493 18,940 17,357 31,870
PAT 41,656 123,218 45,458 5,007 72,294
Minority Interest -117 -282 -1,017 -1,049 -1,000
Profit After MI 41,773 123,500 46,475 6,056 73,294

November 11, 2009
Financial Highlights
Net Sales EBITDA PAT EBITDA Margin (%) PAT Margin (%)
Company 2Q’10 % Change 2Q’10 % Change 2Q’10 % Change 2Q’10 Change (bps) 2Q’10 Change (bps)
(INR Mn) Sept-09 YoY QoQ Sept-09 YoY QoQ Sept-09 YoY QoQ Sept-09 YoY QoQ Sept-09 YoY QoQ
Aluminium
Ess Dee Alumin. 1,416 14.0 8.6 412 17.1 26.1 243 5.9 38.9 29 0.8 4.0 17 -1.2 3.7
Goa Carbon 748 -27.5 57.9 -36 -168.8 40.2 -51 -281.9 6.0 -5 -10.0 0.6 -7 -9.4 3.3
Hindalco Inds. 49,171 -13.5 26.1 6,092 -38.7 -19.6 3,441 -52.2 -28.4 12 -5.1 -7.0 7 -5.4 -5.2
Natl. Aluminium 11,791 -25.0 26.1 1,417 -79.0 -15.3 1,595 -64.1 26.1 12 -31.0 -5.9 12 -14.8 -0.1
Parekh Aluminex 1,411 33.9 12.0 243 40.8 9.5 107 23.5 9.2 17 0.8 -0.4 8 -0.7 -0.2
Total 64,538 -14.9 25.6 8,127 -52.9 -16.9 5,335 -55.5 -15.3 13 -10.2 -6.4 8 -7.3 -3.8
Copper
Hind.Copper 2,399 -32.0 -27.3 180 -8.0 -573.2 145 -18.9 6,472.7 7 2.0 8.6 6 1.0 5.7
Prec. Wires (I) 1,493 -2.5 18.3 109 26.4 -13.2 51 52.1 -16.7 7 1.7 -2.6 3 1.2 -1.4
Ram Ratna Wires 952 12.1 13.9 64 97.5 5.7 28 515.2 4.8 7 2.9 -0.5 3 2.4 -0.3
Sterlite Inds. 61,291 -10.0 33.9 13,419 -27.1 31.4 13,462 -22.1 35.3 22 -5.1 -0.4 20 -3.6 0.6
Total 66,135 -10.7 29.2 13,772 -26.4 33.0 13,685 -21.8 36.4 21 -4.5 0.6 19 -3.1 1.3
Ferro Alloys
Balasore Alloys 1,135 -45.6 21.9 165 -51.2 -10.1 26 -80.1 -37.8 15 -1.7 -5.2 2 -4.0 -2.2
Facor Alloys 698 18.1 50.9 91 -18.7 -532.2 86 -62.4 -469.1 13 -5.9 17.6 12 -26.1 17.2
Ferro Alloys Cor 802 -10.7 12.2 133 -61.3 -893.5 59 -71.3 651.3 17 -21.8 19.0 7 -15.5 6.3
Impex Ferro Tech 1,355 41.8 25.4 50 3.1 31.7 14 -32.0 58.6 4 -1.4 0.2 1 -1.1 0.2
Indian Metals 1,196 -52.2 -0.9 207 -83.9 142.5 -20 -102.8 -75.9 17 -34.1 10.3 -2 -30.9 5.3
Mah. Elektrosm. 915 -15.4 25.7 258 -9.1 161.0 179 -11.7 107.7 28 2.0 14.6 19 0.8 7.7
Maithan Alloys 1,052 -51.6 12.4 185 -44.8 13,078.6 104 -54.5 -780.9 18 2.2 17.4 10 -0.6 11.3
Sandur Manganese 683 -51.9 24.8 89 -91.6 -271.0 78 -88.5 -285.1 13 -61.7 22.6 11 -37.5 18.2
Total 7,835 -33.1 18.6 1,179 -69.0 271.3 525 -78.4 -2,671.6 15 -17.5 10.2 7 -14.0 6.9
Mining/Minerals
Austral Coke 859 -35.4 -4.2 129 -66.2 -63.2 30 -82.8 -80.4 15 -13.6 -23.9 3 -9.8 -13.6
Guj NRE Coke 3,834 -22.7 23.7 635 -56.6 275.8 202 -80.3 455.2 17 -12.9 11.1 5 -15.4 4.1
Ashapura Minech. 2,305 -3.3 58.4 168 -262.4 -45.2 -97 -42.5 -293.0 7 11.6 -13.7 -4 2.8 -7.6
GMDC 1,767 34.8 -35.3 745 30.4 -46.1 380 104.1 -52.5 42 -1.4 -8.5 20 7.2 -8.2
Himadri Chemical 1,250 9.9 47.3 506 32.3 36.1 283 22.9 24.8 40 6.9 -3.3 22 2.3 -3.5
NMDC 13,901 -14.0 8.8 10,165 -16.2 7.2 7,709 -18.4 -0.4 73 -1.9 -1.1 49 -1.6 -2.1
Resurgere Mines 900 10.5 -7.1 75 -64.2 -19.0 48 -58.7 -7.9 8 -17.4 -1.2 5 -8.9 0.0
Sesa Goa 5,387 -38.5 -46.7 1,527 -63.7 -66.3 1,694 -50.1 -60.0 28 -19.7 -16.4 27 -9.9 -12.0
Total 30,204 -18.1 -8.2 13,948 -27.5 -16.4 10,250 -28.9 -22.9 46 -6.0 -4.5 31 -5.1 -5.6
Others
Kalyani Steels 2,495 -34.1 25.0 152 -34.4 24.1 128 16.0 -1,124.8 6 0.0 0.0 5 1.9 5.4
Manaksia 2,984 -15.5 -0.4 564 -20.3 23.9 349 -38.5 5.2 19 -1.1 3.7 12 -4.4 0.5
Rohit Ferro Tec. 1,969 -29.6 12.8 205 -18.1 24.8 66 -71.3 27.0 10 1.5 1.0 3 -4.9 0.4
Tinplate Co. 1,563 0.4 -21.2 359 29.9 -24.9 156 124.5 -28.8 23 5.2 -1.1 10 5.4 -1.1
Total 9,011 -22.8 3.3 1,280 -12.7 4.9 700 -28.5 18.4 14 1.6 0.2 8 -0.8 0.8
Continued…

November 11, 2009
Steel - Large
Bhushan Steel 12,985 -14.3 -0.5 3,428 2.6 15.4 1,892 32.3 10.1 26 4.4 3.6 14 5.1 1.6
ISMT 2,869 -29.7 11.7 487 -6.2 -14.6 177 -12.2 -28.0 17 4.3 -5.2 6 1.2 -3.4
Ispat Inds. 20,480 -36.5 46.3 3,129 -47.5 201.4 -794 197.0 -63.1 15 -3.2 7.9 -4 -3.0 11.5
Jindal Saw 13,729 -7.6 -8.5 2,551 27.8 6.7 1,464 46.3 7.7 19 5.2 2.7 11 3.9 1.6
JSL 13,300 21.5 -1.3 2,808 967.2 32.7 716 -7.0 279.0 21 18.7 5.4 5 -1.6 4.1
JSW Steel 47,565 1.5 18.5 10,753 15.0 56.2 3,160 -24.8 44.7 23 2.6 5.5 7 -2.3 1.5
Lloyd Steel Inds 8,460 19.0 44.8 72 -79.2 -53.8 -340 193.2 133.7 1 -4.0 -1.8 -4 -2.0 -1.2
MUSCO 2,674 -26.6 18.9 208 49.2 101.7 20 -293.1 -142.8 8 3.9 3.2 1 1.0 2.8
Mukand 5,232 -12.3 18.5 701 36.8 9.4 163 1,032.6 14.1 13 4.8 -1.1 3 2.9 -0.1
Natl. Steel&Agro 5,171 -25.0 23.3 157 -27.0 12.0 23 -69.2 24.7 3 -0.1 -0.3 0 -0.6 0.0
PSL 6,062 -8.3 -4.3 685 3.4 -7.8 216 -0.1 -4.3 11 1.3 -0.4 4 0.3 0.0
Ramsarup Inds 4,214 -11.9 11.2 535 -0.8 28.8 98 -7.1 57.4 13 1.4 1.7 2 0.1 0.7
SAIL 100,390 -16.8 8.3 23,883 -20.7 27.3 16,635 -17.2 25.4 24 -1.2 3.5 16 -0.4 2.2
Sunflag Iron 3,061 -9.3 7.4 384 2.6 -0.5 177 39.8 11.1 13 1.5 -1.0 6 2.0 0.2
Surya Roshni 5,315 6.1 30.4 263 18.0 9.1 48 31.3 15.3 5 0.5 -1.0 1 0.2 -0.1
Tata Steel 56,921 -16.5 1.4 19,222 -32.2 10.3 9,029 -55.5 14.3 34 -7.8 2.7 16 -13.1 1.7
Usha Martin 4,858 -18.6 18.0 784 -29.5 7.5 147 -65.0 9.3 16 -2.5 -1.6 3 -4.0 -0.2
Uttam Galva 11,026 -19.0 2.7 1,044 20.1 1.4 218 2.4 -37.0 9 3.1 -0.1 2 0.4 -1.2
Total 324,311 -13.7 9.7 71,093 -16.2 25.3 33,048 -32.3 28.9 22 -0.7 2.7 10 -2.8 1.6
Steel – Medium/Small
Adhunik Metal 3,154 -19.8 16.1 534 -25.7 -26.0 116 -50.3 -36.3 17 -1.3 -9.6 4 -2.3 -3.0
Bilpower 1,075 -2.4 2.9 54 -16.5 -34.6 25 -12.9 -45.3 5 -0.8 -2.9 2 -0.3 -2.0
Facor Steels 613 -52.2 18.6 17 -75.0 -154.8 -16 -159.9 -72.2 3 -2.5 8.8 -3 -4.8 8.7
Gallantt Metal 967 -37.1 -8.5 133 7.8 4.8 51 47.4 13.6 14 5.7 1.7 5 3.0 1.0
Godawari Power 1,650 -51.3 -23.9 205 -61.3 -35.1 45 -87.6 -67.0 12 -3.2 -2.1 3 -8.1 -3.6
Goodluck Steel 1,209 0.1 8.8 97 -6.1 -11.0 39 -7.4 -18.4 8 -0.5 -1.8 3 -0.3 -1.1
Jai Corp 934 -24.6 -13.4 152 -15.4 23.0 185 -1.7 102.1 16 1.8 4.8 17 3.4 9.3
Kamdhenu Ispat 708 -35.0 -9.8 10 -48.2 -16.3 -12 -221.8 30.9 1 -0.4 -0.1 -2 -2.7 -0.5
Modern Steel 648 -23.2 -5.6 34 -27.9 -33.2 3 -78.8 -85.1 5 -0.3 -2.1 0 -1.0 -2.1
OCL Iron & Steel 541 -18.9 67.5 28 -35.1 -28.2 -10 -420.0 -318.2 5 -1.3 -6.8 -2 -2.2 -3.1
Panchmahal Steel 751 -54.8 32.3 99 -4.5 172.8 38 64.8 -337.0 13 7.0 6.8 5 3.7 7.8
Pennar Inds. 1,810 5.5 -0.1 251 35.4 2.6 120 19.7 11.4 14 3.1 0.4 7 0.8 0.7
Ratnamani Metals 1,785 -29.9 -6.7 414 -11.2 12.8 214 -8.8 17.2 23 4.9 4.0 12 2.8 2.4
Real Strips 537 21.1 13.8 46 60.8 17.8 17 129.3 14.7 9 2.1 0.3 3 1.5 0.0
Ruchi Strips 1,169 29.2 56.8 59 29.4 53.1 2 120.0 -56.9 5 0.0 -0.1 0 0.1 -0.5
S.A.L Steel 509 -48.4 -42.5 30 -85.1 -72.5 -70 -542.8 13,980.0 6 -14.4 -6.4 -14 -15.4 -13.8
Sarda Energy 1,020 -70.3 9.6 62 -92.5 90.7 16 -96.7 -78.2 6 -17.8 2.6 1 -11.9 -6.1
Steel Exchange 1,519 -8.8 -1.7 52 -55.9 55.5 6 -85.7 -87.9 3 -3.7 1.3 0 -2.0 -2.4
Surana Inds. 2,221 6.3 15.0 224 -7.8 -8.0 94 15.1 15.6 10 -1.5 -2.5 4 0.2 -0.1
Tulsyan NEC 1,448 -27.8 9.3 99 -33.1 -6.3 24 -59.6 11.4 7 -0.5 -1.1 2 -1.3 0.0
Vallabh Steels 625 -15.6 7.8 20 -19.0 -12.4 3 138.5 -45.6 3 -0.1 -0.8 0 0.3 -0.5
Vardhman Inds. 571 -21.2 -16.6 50 -14.5 -11.0 17 -22.5 -36.3 9 0.7 0.5 3 0.0 -0.9
Varun Inds. 3,024 -6.2 -22.1 389 31.7 9.7 46 154.4 -33.4 13 3.7 3.7 2 1.0 -0.2
Visa Steel 2,528 -23.7 -0.5 442 -9.9 43.4 87 -80.3 -13.4 17 2.7 5.4 3 -9.9 -0.5
Zenith Birla 1,254 -14.8 -10.2 84 27.1 -9.9 45 190.9 16.1 7 2.2 0.0 4 2.5 0.8
Total 32,272 -25.3 -1.3 3,586 -30.9 -1.3 1,082 -56.2 -13.7 11 -0.9 0.0 3 -2.4 -0.5
Continued…

November 11, 2009
Steel – Pig Iron
Kirl. Ferrous 1,769 -9.9 6.7 278 89.2 32.6 161 719.3 88.1 16 8.2 3.1 9 8.1 4.0
Lanco Inds. 1,759 10.0 3.8 365 64.6 30.5 153 382.0 55.4 21 6.9 4.3 9 6.7 2.9
Sathavaha. Ispat 719 -70.0 -45.8 119 -74.4 -11.5 41 -82.9 -27.5 17 -2.8 6.4 6 -4.3 1.5
Tata Metaliks 2,707 -12.6 45.4 207 -20.6 -382.4 55 -45.5 -125.6 8 -0.8 11.6 2 -1.3 13.5
Total 6,954 -23.2 6.3 970 -11.4 76.1 410 4.8 1,602.1 14 1.9 5.5 6 1.6 5.5
Steel – Sponge Iron
Ankit Met.Power 1,614 74.2 6.0 101 8.0 -19.6 24 -26.8 -40.3 6 -3.8 -2.0 2 -2.1 -1.2
Jai Balaji Inds. 4,749 6.0 3.8 677 10.8 53.7 126 -2.2 -537.5 14 0.6 4.6 3 -0.2 3.3
Jindal Steel 24,453 -14.5 -11.0 13,056 2.8 -18.3 8,084 6.0 -18.2 53 9.0 -4.7 32 6.0 -3.0
Lloyds Metals 1,790 2.6 61.8 -1 -100.3 -101.5 -68 -138.0 430.5 0 -13.7 -3.8 -4 -14.0 -2.6
Monnet Ispat 3,140 -21.4 -11.8 965 -7.2 -10.4 642 3.5 4.8 31 4.7 0.5 20 4.3 2.6
MSP Steel & Pow. 923 -1.4 11.4 155 -7.8 13.0 71 -34.1 91.9 17 -1.2 0.2 8 -3.6 3.2
Tata Sponge Iron 1,149 -51.7 -4.3 247 -77.6 -9.9 146 -80.0 -10.2 21 -24.8 -1.4 12 -17.8 -0.8
Vikash Metal 1,803 35.1 14.9 88 5.5 9.1 8 -50.0 16.7 5 -1.4 -0.3 0 -0.8 0.0
Total 39,620 -10.7 -5.3 15,288 -4.7 -15.8 9,033 -4.3 -15.6 39 2.4 -4.8 22 1.3 -2.8
Tubes/Pipes
Bihar Tubes 1,442 12.1 9.6 135 11.0 8.3 81 8.1 26.0 9 -0.1 -0.1 6 -0.2 0.9
Mah. Seamless 4,103 -31.9 -3.0 1,074 21.2 8.1 712 11.3 9.1 26 11.5 2.7 17 6.8 1.9
Man Inds. 3,103 -17.6 -3.6 223 -36.3 -22.2 31 -71.1 9.8 7 -2.1 -1.7 1 -1.9 0.1
Oil Country 1,269 49.3 74.9 339 31.8 75.6 242 35.9 76.9 27 -3.6 0.1 19 -1.9 0.3
Remi Metals Guj. 723 -13.0 -6.5 -16 -80.9 161.3 -93 -29.4 21.5 -2 8.0 -1.4 -13 3.0 -2.9
Technocraf. Inds. 996 -12.6 25.9 157 -24.4 2.5 169 55.2 173.1 16 -2.5 -3.6 15 5.9 7.8
Welsp.Guj.Stahl 18,132 21.5 -3.5 2,935 87.0 -3.1 1,402 114.7 1.5 16 5.7 0.1 8 3.4 0.4
Total 29,766 3.3 -0.3 4,846 46.5 1.5 2,544 56.0 13.1 16 4.8 0.3 8 2.9 1.0
Zinc
Hind. Zinc 18,183 1.6 19.1 10,755 9.5 37.5 9,350 -2.6 30.1 59 4.3 7.9 47 -1.3 5.3
Total 18,183 1.6 19.1 10,755 9.5 37.5 9,350 -2.6 30.1 59 4.3 7.9 47 -1.3 5.3
Source: Khandwala Research, Capitline

November 11, 2009
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Poised for Muscular Growth

5. Raw Material Prices 8

7. Non-Ferrous Metal Prices 12

10. Industry Aggregate Financials 16

11. Sector Analysis for 2QFY10 17

12. Net Sales Growth 21

13. EBITDA Growth 21

14. PAT Growth 22

15. EBITDA Margins 22

16. PAT Margins 23

17. Companies’ 2QFY10 Result Update 24

ArcelorMittal USA Inc. 25

Hindalco Industries Limited 28

Hindustan Zinc Limited 36

JSW Steels Limited 40

National Aluminium Company Limited 47

Sesa Goa Limited 51

Steel Authority of India Limited 56

Sterlite Industries Limited 60

Tata Steel Limited 65

18. Financial Highlights 71

KSL – Metals & Mining Sector Update 2

Gradual improvement in steel production across the globe

KSL – Metals & Mining Sector Update 3

KSL – Metals & Mining Sector Update 5

Global HRC Prices Global Long Prices

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

India Flat Prices India Long Prices

52,000(INR/Tonne) 44,000 (INR/Tonne)

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

KSL – Metals & Mining Sector Update 6

US HRC Prices China HRC Prices

1,200 (USD/Tonne) 900 (USD/Tonne)

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

North Europe HRC South Europe HRC

1,300(USD/Tonne) 1,425 (USD/Tonne)

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

KSL – Metals & Mining Sector Update 7

Raw Material Prices

Iron Ore Prices China Coke Prices

235 (USD/Tonne) 475 (USD/Tonne)

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

China Scrap Prices US Coal Prices

650 (USD/Tonne) 225 (USD/Tonne)

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

KSL – Metals & Mining Sector Update 8

Steel Production Data

Global Steel Production India Steel Production

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

China Steel Production US Steel Production

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

KSL – Metals & Mining Sector Update 9

Europe Steel Production Japan Steel Production

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

China Steel Export China Coke Export

8.0 (MT) 2.4 (MT)

Source: Khandwala Research, Bloomberg Source: Khandwala Research, Bloomberg

KSL – Metals & Mining Sector Update 10

China Iron Ore Inventory China Total Iron Ore Imports

Source: Khandwala Research; Bloomberg Source: Khandwala Research; Bloomberg

Indian Iron Ore Export to China China Imports market share

Metal & Mining

Metal & Mining