04-10-2012, 11:07 AM
Bhushan Steel
Bhushan Steel Analyst Report.pdf (Size: 179.81 KB / Downloads: 87)
Background
Bhushan Steel, a Cold Rolled product leader, has a rich
product mix - value added products such as CRCA,
galume, color coated sheets, HTSS, H&T, drawn tubes
etc. It is one of the most preferred suppliers to the auto
industry. CRCA is produced in its plant near Delhi to cater
to major Auto OEMs. Its galvanizing plants are located
strategically close to HRC producers such as Ispat
Industries and the ports of Mumbai, helping it to cater
to global demand at competitive prices. BSL’s total VAP
(value added products) volumes are next only to Tata
Steel, but its product portfolio is wider in comparison.
With ongoing backward integration project to meet the
current and future raw material requirement of the cold
rolling mill complexes, margins will improve.
Sector view
Global steel demands still remains subdued due to
European economic problems and slow down in
construction in China. The growth rate moderated
sharply in December with crude steel production
rising 0.8% YoY. Global economic growth slow down
mainly in China continues to cloud demand outlook.
Indian real steel demand too has slowed down
growing only 4.2% YoY to 45.2m tons during April-
November 2011. We believe Indian demand will still
grow 7-8% over couple of years. Depreciation of INR
against USD and appreciating Yuan has increased
competitiveness of Indian producer’s vis-à-vis their
Chinese counterparts, therefore lowering Chinese
imports threat.