>Gujarat NRE Coke(MF Global)

As expected Gujarat NRE Coke came out with another strong quarter for Q2FY09.

v Net sales increased by 386% to Rs.4,961 mn driven by higher coke prices, which were up by 187% in Q2FY09 and volume growth of 108%. The company produced 165,127 ton of coke up by 108%. Coke business contributed 83.6%, against 60.3% last year to the top line.

v Standalone numbers don't include sales from Australian subsidiary, which grew by 7.4x in Q2FY09 to Aus $53.8 mn. Australian subsidiary mined and dispatched 213,000 ton of coal in Q2FY09 as compared to 127,000 ton last year. It sold coal at average realization of Aus $253 per ton as compared to Aus $58 per ton last year.

v Standalone EBIDTA increased by 739.2% to Rs.1,464 mn in Q2FY09 and by 256% to Rs.2,728 mn in H1FY09.

v EBIDTA margin increased by 1,242bps to 29.5% in Q2FY09 and by 69bps to 31.2% in H1FY09 on account of higher coke price and low price coal inventory. Since the price of raw material i.e. coking coal is fixed for entire year while sells of coke happen in spot, we expect the company to face margin pressure here onwards.

Read full report here Gujarat NRE Coke(MF Global)