Visit http://indiaer.blogspot.com/ for complete details Ambuja – 3QCY2010
Ambuja’s standalone top line declined by 2.9% yoy, which was in line with our estimates.
The decline was despite a 6.1% yoy increase in despatches to 4.4mn tonnes, aided by
capacity additions. Thus, the top-line decline was on account of an 8.5% yoy decline in
realisations to `3,595/tonne. On the operating front, the company’s OPM declined by
1,174bp yoy to 19.1% on account of lower realisation and higher import of high-cost
imported coal and pet coke. Coal imports increased due to lower availability of domestic
linkage coal. Further, increased production of clinker during the quarter resulted in a 38%
increase in power costs, thereby lowering the operating margin. The bottom line declined
by 52.2% yoy to `152cr, well below our estimates. At the current levels, the stock is trading
at an EV/EBITDA of 9x and EV/tonne of US $160 based on CY2011E estimates.
We remain Neutral on the stock.
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