3QFY2013 Result Update | Steel

January 28, 2013

JSW Steel
Performance Highlights
Quarterly performance (Standalone) (` cr) Net Sales EBITDA % margin Adj. PAT

NEUTRAL
CMP Target Price
yoy (%)
5.3 4.9 (6)bp) (30.6)

`869 -

3QFY13
8,275 1,314 15.9 464

3QFY12
7,860 1,253 15.9 668

2QFY13
8,834 1,525 17.3 400

qoq% 3QFY13
(6.3) (13.9) (139)bp 16.1 8,275 1,314 15.9 464

Investment Period
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Steel 19,409 18,739 1.5 894/566 205,903 10 20,103 6,075 JSTL.BO JSTL@IN

Source: Company, Angel Research

JSW Steels 3QFY2013 standalone top-line came in lower than our expectation; however, the bottom-line was slightly better than our expectation. We maintain our Neutral recommendation on the stock. Realization dips more than our expectations: JSW Steels standalone net sales grew by 5.3% yoy to `8,275cr, below our estimate of `8,521cr due to lower-than-expected realizations. Net sales growth was driven by an increase in steel volumes (+13.7% yoy to 2.17mn tonne), although the same was partially offset by a decline in realizations (-9.5% yoy to `38,804/tonne). Higher interest costs hit PAT: JSW Steels EBITDA increased only 4.9% yoy to `1,314cr on account of decrease in realizations. Interest expenses grew by 61.3% yoy to `455cr. Hence, the adjusted net profit (excluding exceptional items) de-grew by 30.6% yoy to `464cr (our estimate was of `451cr). Slow ramp up in iron ore mines in Karnataka: JSW Steel stated that 6 A category mines, with a capacity of 3.3mtpa, have opened up while another 4 mines with a capacity of 1.8mtpa are at various stages of approvals. For B category mines, 20 mines received R&R approvals; however, there is no clarity on timelines of production from these mines. Outlook and valuation: JSW Steel aims to raise utilization levels at its Vijaynagar plant during FY2014. However, we believe increasing steel production meaningfully during FY2014 would remain a challenge until there is significant rise in iron ore supplies from Karnataka mines. Although we expect iron ore supplies in Karnataka to improve gradually during FY2014, there is lack of clarity on the timelines and production from category B mines. Moreover, we opine that JSW Ispats merger with JSW Steel is likely to be value-destructive for JSW Steels shareholders. The stock is currently trading at 4.9x FY2014 EV/EBITDA. We maintain our Neutral view on the stock. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Adj. net profit % chg Adj. EPS (`) OPM (%) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA FY2011 23,862 26.3 1,754 7.4 78.6 20.4 11.1 1.2 14.2 10.5 1.4 6.7 FY2012 34,368 44.0 1,248 3.6 55.9 17.8 15.5 1.2 7.8 10.8 1.0 5.9 FY2013E 39,072 13.7 1,838 4.7 82.4 16.5 10.5 1.1 10.7 9.6 0.9 5.5 FY2014E 40,493 3.6 2,014 5.0 90.3 18.2 9.6 1.0 10.7 10.4 0.9 4.9

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 38.1 5.3 20.6 36.1

Abs. (%) Sensex JSW Steel

3m 7.9 18.7

1yr 16.6 31.4

3yr 23.3 (12.1)

Bhavesh Chauhan
Tel: 022- 39357800 Ext: 6821 bhaveshu.chauhan@angelbroking.com

Vinay Rachh
Tel: 022- 39357600 Ext: 6841 Vinay.rachh@angelbroking.com

Source: Company, Angel Research

Please refer to important disclosures at the end of this report

JSW Steel | 3QFY2013 Result Update

Exhibit 1: 3QFY2013 performance (Standalone)

(` cr.) Net sales Raw material % of net sales Power & fuel % of net sales Staff cost % of net sales Other expenditure % of net sales Total expenditure % of net sales Operating profit Other operating income EBIDTA EBITDA margins (%) Interest Depreciation Other income Exceptional items Profit before tax % of net sales Tax % of PBT Adj. PAT
Source: Company, Angel Research

3QFY13
8,275 5,354 64.7 493 6.0 160 1.9 972 11.7 6,979 84.3 1,296 18 1,314 15.9 455 498 57 327 91 1.1 (46) (50.7) 464

3QFY12
7,860 5,167 65.7 439 5.6 150 1.9 868 11.0 6,624 84.3 1,236 17 1,253 15.9 282 444 1 0 527 6.7 (141) (26.8) 668

yoy%
5.3 3.6 12.2 6.8 12.0 5.4 4.9 4.0 4.9 0.06 61.3 11.9 7,348.7 (82.8) (67.4) (30.6)

2QFY13
8,834 5,655 64.0 496 5.6 176 2.0 1,019 11.5 7,346 83.2 1,488 37 1,525 17.3 421 481 78 422 1,124 12.7 302 26.8 400

qoq%
(6.3) (5.3) (0.7) (8.8) (4.6) (5.0) (12.9) (52.8) (13.9) 8.0 3.4 (27.7) (91.9) (115.3) 16.1

9MFY2013
26,139 16,614 63.6 1,501 5.7 510 2.0 2,964 11.3 21,589 82.6 4,549 62 4,612 17.6 1,282 1,446 207 497 1,593 6.1 365 22.9 1,725

9MFY2012
22,549 14,421 64.0 1,280 5.7 473 2.1 2,461 10.9 18,635 82.6 3,914 29 3,943 17.5 713 1,236 54 513 1,537 6.8 161 10.5 1,887

yoy%
15.9 15.2 17.2 7.9 20.4 15.9 16.2 114.3 16.9 (0.16) 79.8 17.0 283.6 (3.1) 3.7 126.8 (8.6)

Exhibit 2: 3QFY2013 Actual vs. Angel estimates (Standalone)

(` cr) Net sales EBITDA EBITDA margin (%) Adj. PAT
Source: Company, Angel Research

Actual 8,275 1,314 15.9 464

Estimates 8,521 1,474 17.3 451

Variation (%) (2.9) (10.9) (143)bps 2.9

January 28, 2013

JSW Steel | 3QFY2013 Result Update

Result highlights
Realization dips more than our expectations: JSW Steels standalone net sales grew by 5.3% yoy to `8,275cr, below our estimate of `8,531cr due to lower-thanexpected realizations. Net sales growth was driven by an increase in steel volumes (+13.7% yoy to 2.17mn tonne), although the same was partially offset by a decline in realizations (-9.5% yoy to `38,804/tonne). Exhibit 3: Higher sales volumes...
2.8 2.4 1.9 1.9 2.3 1.7 1.7 60.0 2.1 2.2 2.2

Exhibit 4: ...Partially offset by lower realizations...

44,000 43,000 42,000 43,130 43,003 42,900 42,831 42,901 41,884 40,577 38,804 25

(mn tonnes)

1.2 0.8 0.4 0.0 0.0

(%)

39,000 38,000 37,000 36,000

(30.0)

(25)

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

Sales Volume (LHS)

yoy change (RHS)

Revenue/tonne (LHS)

yoy change (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 5: ...resulted in net revenue growth of 5.3% yoy

10,500 9,000 7,500 7,032 7,065 7,625 7,860 9,511 9,030 8,834 60.0% 8,275 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%

(` cr)

4,500 3,000 1,500 0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Revenue (LHS)
Source: Company, Angel Research

yoy change (RHS)

Lower realizations mute EBITDA growth: JSW Steels EBITDA increased only 4.9% yoy to `1,314cr in spite of a 13.7% yoy increase in volumes due to decrease in realizations. Interest costs rises substantially yoy: Interest expenses grew by 61.3% yoy to `455cr. The company reported an exceptional item related to forex loss of `327cr. Hence, the adjusted net profit (excluding exceptional items) de-grew by 30.6% yoy to `464cr (our estimate was of `451cr). The reported net profit was however down 79.5% yoy to `137cr.

January 28, 2013

3QFY13

(%)

6,000

3QFY13

(%)

1.6

(`/tonne)

2.0

30.0

41,000 40,000

JSW Steel | 3QFY2013 Result Update

Exhibit 6: Adjusted net profit stood at `464cr

1,000 800 833 578 640 668 553 400 464 861 15 12 9 6 3 0

(` cr)

600 400 200 -

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Adjusted net profit (LHS)

Source: Company, Angel Research

margin (RHS)

Slow ramp up in iron ore mines in Karnataka: On the iron ore situation in Karnataka, the company stated that 6 A category mines, with a capacity of 3.3mtpa, have opened up while another 4 mines with a capacity of 1.8mtpa are at various stages of approval. For B category mines, 20 mines received R&R approvals; however, there is no clarity on timelines of production from these mines. On the projects front, the company is implementing various projects which are likely to take the companys share of value-added products to 40-50% of the total capacity over the coming two years.

January 28, 2013

3QFY13

(%)

JSW Steel | 3QFY2013 Result Update

Investment rationale
Robust volume growth over FY2012-15: JSW Steel had expanded its capacity by 3.2mn tonne during FY2012, taking its total capacity to 11mn tonne. Further, JSW Steel is expanding capacity at its Vijaynagar plant from 10mn tonne to 12mn tonne by FY2014-15. Utilization levels remain at risk: Although JSW Steel has expanded its capacity, its
Vijaynagar plant (capacity 10mn tonne) continues to operate at lower utilization levels on account of shortage of iron ore due to mining ban in Karnataka. Although we expect iron ore supplies to improve gradually during FY2013 as category A and B mines commence operations, there is lack of clarity on the timelines and anticipated production from these mines. Procedural delays in the commencement of operations from Karnataka mines could result in higher iron ore costs/lower utilization for JSW Steel. Merger with JSW Ispat to be margin-dilutive: JSW Steel is expected to merge with JSW Ispat over the coming one year. However, JSW Ispats margins are much lower compared to JSW Steels standalone margins. Given the commodity nature of the business, JSW Steels Management is not expected to turnaround JSW Ispats loss making plants in the near-term, in our opinion. Further, JSW Ispats debt will raise debt-equity ratio of the merged entity. Hence, JSW Ispats merger with JSW Steel is likely to be value-destructive for JSW Steels shareholders (at least during our investment horizon).

Outlook and valuation

JSW Steel aims to raise utilization levels at its Vijaynagar plant during FY2014. However, we believe increasing steel production meaningfully during FY2014 would remain a challenge until there is significant rise in iron ore supplies from Karnataka mines. Although we expect iron ore supplies in Karnataka to improve gradually during FY2014, there is lack of clarity on the timelines and anticipated production from category B mines. Procedural delays in the commencement of operations from Karnataka mines could result in higher iron ore costs/lower utilization for JSW Steel. Moreover, we opine that JSW Ispats merger with JSW Steel is likely to be value-destructive for JSW Steels shareholders. The stock is currently trading at 4.9x FY2014 EV/EBITDA. We maintain our Neutral view on the stock. Exhibit 7: EPS Angel forecast vs. consensus
Year (`) FY2013E FY2014E
Source: Bloomberg, Angel Research

Angel forecast

Bloomberg consensus

Variation (%)

82.4 90.3

73.6 89.8

11.9 0.6

January 28, 2013

JSW Steel | 3QFY2013 Result Update

Exhibit 8: P/E band

1,600 1,400 1,200 1,000

(`)

800 600 400 200 0 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 6x 9x 12x 15x

Source: Bloomberg, Angel Research

Exhibit 9: EV/EBITDA band

80,000 70,000 60,000 50,000

(` cr)

40,000 30,000 20,000 10,000 0 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 2x 4x 6x 8x 10x

Source: Bloomberg, Angel Research

Exhibit 10: P/BV band

2,000 1,800 1,600 1,400 1,200

(`)

1,000 800 600 400 200 0 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 0.5x 1.0x 1.5x 2.0x

Source: Bloomberg, Angel Research

January 28, 2013

JSW Steel | 3QFY2013 Result Update

Exhibit 11: Recommendation summary

Company CMP Target price (`) SAIL (`) Reco. Mcap (` cr) Upside (%) P/E (x) FY13E P/BV (x) EV/EBITDA (x) FY13E FY14E RoE (%) FY13E FY14E RoCE (%) FY13E FY14E FY14E FY13E FY14E

90

- Neutral 463 Accum - Neutral

37,236 36,493 19,409

14 -

13.3 17.1 10.5

13.0 8.4 9.6

0.9 0.8 1.1

0.9 0.8 1.0

8.0 6.4 5.5

8.4 5.4 4.9

6.9 4.9 10.7

6.7 9.3 10.7

6.1 7.2 9.6

6.2 10.0 10.4

Tata Steel 406 JSW Steel 869

Source: Company, Angel Research

Company background
Incorporated in 1994, JSW Steel is India's second largest private sector steel maker with a steel making capacity of 11mn tonne. The company has the most modern steel plants with the latest technologies for both upstream and downstream processes. The company has an iron ore mine in Karnataka which fulfills 15% of its requirement. During FY2011, the company acquired 49% stake in JSW Ispat for an enterprise value of US$3bn and is now expected to be merged with JSW Steel during CY2013. The combined capacity of both companies would be 14mn tonne.

January 28, 2013

JSW Steel | 3QFY2013 Result Update

Profit & loss statement (Consolidated)

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Other operating income Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel EBITDA % chg (% of Net Sales) Depreciation& Amortization EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Inc/(Expense) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings of asso. Less: Minority interest (MI) Extraordinary Expense/(Inc.) PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Adj. fully Diluted EPS (`) % chg
previous year numbers

FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 17,064 20,151 25,829 36,964 1,178 49 27.9 1,254 60 19.0 1,968 244 27.2 2,596 42.6 15,886 18,897 23,862 34,368 15,935 18,957 24,106 34,368 12,953 14,887 19,238 28,266 9,619 11,231 14,774 21,928 2,815 519 2,982 (14.3) 18.8 988 1,994 (27.1) 12.6 1,156 272 24.5 1,110 (54.2) (795) 315 73 23.0 243 12 21 275 1,070 (32.5) 6.7 41.2 38.2 (50.6) 3,176 480 4,071 36.5 21.5 1,299 2,772 39.0 14.7 1,108 128 7.2 1,792 61.4 408 2,200 647 29.4 1,553 11 33 1,598 1,190 11.2 6.3 68.8 63.8 67.1 3,824 641 4,868 19.6 20.4 1,560 3,308 19.3 13.9 1,060 190 7.8 2,438 36.0 2,438 779 31.9 1,659 71 (24) 1,706 1,754 47.4 7.4 78.6 78.6 23.3 5,492 846 6,102 25.4 17.8 1,933 4,169 26.0 12.1 1,427 77 2.7 2,818 15.6 (825) 1,993 500 25.1 1,493 (226) 19 710 1,996 1,248 (28.8) 3.6 55.9 55.9 (28.8) 41,963 2,891 39,072 64 39,136 13.9 32,672 24,819 6,838 1,016 6,463 5.9 16.5 2,344 4,119 (1.2) 10.5 1,703 251 9.4 2,666 (5.4) 2,666 800 30.0 1,867 (52) 24 1,838 1,838 47.3 4.7 82.4 82.4 47.3 43,489 2,996 40,493 65 40,558 3.6 33,239 25,100 7,086 1,053 7,382 14.2 18.2 2,632 4,750 15.3 11.7 1,681 276 8.3 3,345 25.5 3,345 1,004 30.0 2,342 (357) 30 2,014 2,014 9.6 5.0 90.3 90.3 9.6

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

January 28, 2013

JSW Steel | 3QFY2013 Result Update

Balance sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves & Surplus Shareholders Funds Share Warrants Minority Interest Total Loans Deferred Tax Liability Other Long term liabilities Long term provisions Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets
previous year numbers

FY2009 187 7,617 7,804 273 16,550 1,277 25,904 22,389 4,080 18,309 9,585 783 397 5,093 509 1,243 3,341 8,263 (3,170) 25,904

FY2010 187 9,070 9,257 219 16,173 1,685 27,334 26,792 5,339 21,453 6,956 899 628 5,470 303 1,604 3,563 8,073 (2,603) 27,334

FY2011 284 15,716 16,000 529 222 18,373 2,049 773 23 38,246 32,684 6,873 25,811 5,983 1,093 2,914 8,582 2,036 1,203 5,343 7,878 704 38,246

FY2012 FY2013E FY2014E 284 16,465 16,750 218 21,786 2,725 472 35 42,302 41,446 8,877 32,568 2,832 1,244 2,090 12,563 3,047 2,187 7,329 11,928 635 42,302 284 18,019 18,304 194 24,286 2,725 472 35 46,332 47,246 11,222 36,024 2,332 1,244 2,090 14,153 6,053 2,187 5,913 12,444 1,709 46,332 284 19,769 20,053 164 24,186 2,725 472 35 47,952 52,746 13,854 38,892 1,832 1,244 2,090 13,452 5,222 2,187 6,042 12,491 961 47,952

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

January 28, 2013

JSW Steel | 3QFY2013 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Others Direct taxes paid Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments Share of profit/ (loss) from asso. Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances
previous year numbers

FY2009 FY2010 FY2011 315 988 2,678 874 262 4,592 115 15 2,548 340 972 1,236 (12) 522 509 2,200 1,299 793 459 3,361 (209) 13 629 57 1,149 (576) (147) 450 303 2,438 1,560 570 426 2,830 (11.6) 53 5,936 401 240 1,001 5,096 293 1,755 573

FY2012 FY2013E FY2014E 1,933 1,933 (1,062) 1,054 407 3,512 (4,079) 13.2 144 (4,101) 2,191 350 1,143 698 110 573 683 2,666 2,344 1,931 800 6,142 (5,300) (52) (5,352) 2,500 284 2,216 3,006 683 6,053 3,345 2,632 (82) 1,004 4,891 (5,000) (357) (5,357) (100) 265 (365) (831) 6,053 5,222

(471) (1,314)

(5,971) (2,736) (7,674)

(5,841) (2,932) (7,633)

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with

January 28, 2013

10

JSW Steel | 3QFY2013 Result Update

Key ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV/Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio (%) Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating RoE Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover (Gross Block) Inventory (days) Receivables (days) Payables (days) WC cycle (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage
comparable with previous year ratios

FY2009 22.8 12.9 2.2 0.1 2.0 10.7 1.2 41.2 38.2 67.5 1.0 401.8 12.6 77.0 0.7 6.3 6.2 2.1 6.6 8.6 14.5 10.7 0.8 55 11 46 32 2.1 5.2 1.7

FY2010 13.6 5.6 1.8 1.1 1.7 7.7 1.1 68.8 63.8 154.8 9.5 480.0 14.7 70.6 0.7 7.6 4.8 1.7 12.4 10.7 17.3 16.1 0.8 52 11 43 32 1.7 3.7 2.5

FY2011 11.1 5.9 1.2 1.2 1.4 6.7 0.9 78.6 78.6 148.5 10.0 704.7 13.9 68.1 0.8 7.3 4.2 0.9 10.0 10.5 15.7 14.2 0.8 51 12 40 36 0.9 2.8 3.1

FY2012 FY2013E FY2014E 15.5 7.8 1.2 1.2 1.0 5.9 0.9 55.9 55.9 110.7 10.0 738.3 12.1 74.9 1.0 8.7 5.3 1.0 12.1 10.8 14.9 7.8 0.9 50 13 30 42 1.0 2.7 2.9 10.5 4.6 1.1 1.2 0.9 5.5 0.8 82.4 82.4 187.5 10.0 807.9 10.5 70.0 1.1 7.8 5.2 0.9 10.2 9.6 12.7 10.7 0.9 50 13 30 39 0.9 2.5 2.4 9.6 4.2 1.0 1.3 0.9 4.9 0.8 90.3 90.3 208.3 11.0 886.3 11.7 70.0 1.0 8.5 4.9 0.9 11.5 10.4 13.6 10.7 0.8 50 13 30 29 0.9 2.3 2.8

Note: Some of the figures from FY2011 onwards are reclassified; hence some ratios may not be

January 28, 2013

11

JSW Steel | 3QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

JSW Steel No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

January 28, 2013

12