Cement- 3QFY11 Results Preview: Antique

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UltraTech Cement
􀂄 For 3QFY11, we expect UltraTech to post revenues of INR34.7bn. The numbers are
post the merger of Samruddhi with UltraTech, and hence, not comparable on a YoY
basis. We expect blended despatches of 9.6mmt.
􀂄 On the back of weak pricing scenario coupled with higher costs, margins are expected
to remain weak at 21.7%. Accordingly, we expect the company to post operating
profits of INR7.5bn, resulting in a blended EBIDTA/mt of INR780.
􀂄 We expect net profits of INR3.1bn resulting in an EPS of INR11.4.

ACC
􀂄 ACC is expected to post revenues of INR22bn, an increase of 4% YoY in 4QCY10. This
will be largely led by 7% rise in cement volumes to 5.6mmt and a 2% decline in
realisations.
􀂄 On the back of weak pricing scenario coupled with higher costs, margins are expected
to contract by 520bps to 18.4%. Accordingly, operating profits should be lower by
19% to INR4bn. We expect EBIDTA/mt to decline by 24% to INR725.
􀂄 We expect net profits to decline by 27% to INR2bn in 4QCY10.

Ambuja Cement
􀂄 ACL's revenues in 4QCY10 are expected to increase marginally by 6% to INR18.7bn.
This will be largely led by 5% rise in cement volumes to 5mmt. Volume growth was
impacted by the plant shut-down at its units in Himachal Pradesh (Suri and Rauri) on
account of transport strike.
􀂄 Capital charges should surge by 35% to INR1.3bn on account of commissioning of
clinker and grinding capacities in 1HCY10.

Margins are expected to contract by 90bps to 23.6% as a result of weak cement prices
coupled with higher costs. We expect EBIDTA/mt to decline to INR885/mt resulting in
operating profits of INR4.4bn.
􀂄 We expect net profits to decline marginally by 3% to INR2.35bn due to lower effective
tax rate (36% vs. 39.3%).

Shree Cement
􀂄 SCL's revenues are expected to increase by 10% to INR9.5bn aided by higher sales
of surplus power. On the volumes front, we expect the same to rise by 2% to 2.6mmt.
We expect the company to sell ~165m units of power in 3QFY11 against 69.8m units
in 3QFY10.
􀂄 Weaker realisations on the power and cement front coupled with higher raw material
costs should lead to a sharp contraction of 1,500bps to 23.8%, resulting in operating
profits declining by 32% to INR2.3bn.
􀂄 Lower operational profitability alongwith higher capital charges should result in net
profits plunging by 58% to INR697m.

HeidelbergCement India
􀂄 HCIL is expected to post revenues of INR1.9bn, a decline of 3% YoY in 4QCY10. This
will be largely led by 3% rise in cement volumes to 0.59mmt and a 6% decline in
realisations.
􀂄 On the back of weak pricing scenario coupled with higher costs, margins are expected to
contract by 250bps to 10.2%. Accordingly, operating profits should be lower by 23% to
INR201m.
􀂄 We expect net profits to decline by 39% to INR82m in 4QCY10.