Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Top line increases marginally on back of higher dispatched: ACC net sales for
the year were marginally down by 1.6% at Rs 8259 cr v/s Rs 8480 cr in CY09.
Whereas, ACC’s net sales for Q4CY10 stood at Rs 2090 cr, an increase of just 2% yo-
y from Rs 2050 cr in Q4CY09 and increase of 18.8% on q-o-q basis. Dispatches
for CY10 were at 21.29 Million Tonnes (MT), a decline of 1.1% y-o-y. Dispatch for
Q4CY10 was at 5.58 MT v/s 5.23 MT in Q4CY09 an increase of 6.7% and 15.5% on
q-o-q basis. The net realizations for CY10 were at Rs 194/bag v/s Rs 197/bag in
CY09, a decline of 1.6%. For the quarter net realization’s stood at Rs 187.3/bag v/s
Rs 196/bag in Q4CY09 a decrease of 4.4%. The decline in realization was mainly
because of intense competition that is presently prevailing in the Indian cement
industry.
Operational Performance: ACC’s EBIDTA per tonne for CY10 was significantly
down by 30.6% on a y-o-y basis to Rs 849/tonne v/s Rs 1222/tonne in CY09.
EBIDTA per tonne for Q4CY10 was significantly down by 48.4% on a y-o-y basis at
Rs 492/tonne compared to Rs 955/tonne a year ago. EBIDTA margins for Q4CY10
were at 12.3% v/s 23.6 % last year and 4.8 % in the last quarter (Q3CY10).
EBIDTA margins for the year were down by 1070 bps to 23.2% v/s 33.9% in CY09.
Cost Escalation leads to pressure on profitability but Tax provisions write
back helps to some extent: Raw material costs increased 23.1% y-o-y to Rs
746/tonne. The main reason for the increase in raw material cost is increase in
input costs for coal, power, slag and fly ash. Power & Fuel cost increased by 7.2%
y-o-y to Rs 815/tonne v/s Rs 760/tonne. Also freight charges were up significantly
to Rs 641/tonne up by 8.7% y-o-y & 38% on a q-o-q basis on back of increase in
freight by railways. Net Profit for the Q4CY10 stood at Rs 183.3 crore, down 34%
on y-o-y basis and an increase of 112% on q-o-q basis. ACC won the subjudice case
related to a sales tax subsidy, company had made a provision of Rs 64.45 cr for the
same, however they are no longer required as the case has been given in favor of
ACC and so a lower tax outgo for the current quarter.
CAPEX Plans Update: ACC’s total installed capacity has been increased to 30
MTPA. ACC commissioned a kiln at its Wadi plant in Sept 2010 with a capacity of
12,500 tonnes per day; this is the largest cement kiln in the world, also a 25MW
captive power plant (CPP) was commissioned in October 2010 and another 25MW
CPP will be commissioned in Q1CY11 at Wadi. ACC commissioned 3 MTPA
clinkerisation plant along with a 25MW CPP at Chanda in Maharashtra in November
2010 and would ramp up the plant in H1CY11
Valuation: Raw material cost increase for slag, coal, power has led to margin
pressure for ACC. However with the quasi cartel of the cement players working
since October 2010, we believe that some amount of pricing power will return back
to the cement players in the coming quarters. At current levels of Rs 999, ACC is
trading at 15.8x its CY11E EPS. On EV/EBIDTA ACC is trading at 6.8x its CY11E and
on EV/Ton ACC is available at $121/ton its CY11E capacity. We value ACC at
$130/tonne, at a marginal premium to the replacement cost and recommend a buy
on dip strategy for the stock with a target price of Rs 1064.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Top line increases marginally on back of higher dispatched: ACC net sales for
the year were marginally down by 1.6% at Rs 8259 cr v/s Rs 8480 cr in CY09.
Whereas, ACC’s net sales for Q4CY10 stood at Rs 2090 cr, an increase of just 2% yo-
y from Rs 2050 cr in Q4CY09 and increase of 18.8% on q-o-q basis. Dispatches
for CY10 were at 21.29 Million Tonnes (MT), a decline of 1.1% y-o-y. Dispatch for
Q4CY10 was at 5.58 MT v/s 5.23 MT in Q4CY09 an increase of 6.7% and 15.5% on
q-o-q basis. The net realizations for CY10 were at Rs 194/bag v/s Rs 197/bag in
CY09, a decline of 1.6%. For the quarter net realization’s stood at Rs 187.3/bag v/s
Rs 196/bag in Q4CY09 a decrease of 4.4%. The decline in realization was mainly
because of intense competition that is presently prevailing in the Indian cement
industry.
Operational Performance: ACC’s EBIDTA per tonne for CY10 was significantly
down by 30.6% on a y-o-y basis to Rs 849/tonne v/s Rs 1222/tonne in CY09.
EBIDTA per tonne for Q4CY10 was significantly down by 48.4% on a y-o-y basis at
Rs 492/tonne compared to Rs 955/tonne a year ago. EBIDTA margins for Q4CY10
were at 12.3% v/s 23.6 % last year and 4.8 % in the last quarter (Q3CY10).
EBIDTA margins for the year were down by 1070 bps to 23.2% v/s 33.9% in CY09.
Cost Escalation leads to pressure on profitability but Tax provisions write
back helps to some extent: Raw material costs increased 23.1% y-o-y to Rs
746/tonne. The main reason for the increase in raw material cost is increase in
input costs for coal, power, slag and fly ash. Power & Fuel cost increased by 7.2%
y-o-y to Rs 815/tonne v/s Rs 760/tonne. Also freight charges were up significantly
to Rs 641/tonne up by 8.7% y-o-y & 38% on a q-o-q basis on back of increase in
freight by railways. Net Profit for the Q4CY10 stood at Rs 183.3 crore, down 34%
on y-o-y basis and an increase of 112% on q-o-q basis. ACC won the subjudice case
related to a sales tax subsidy, company had made a provision of Rs 64.45 cr for the
same, however they are no longer required as the case has been given in favor of
ACC and so a lower tax outgo for the current quarter.
CAPEX Plans Update: ACC’s total installed capacity has been increased to 30
MTPA. ACC commissioned a kiln at its Wadi plant in Sept 2010 with a capacity of
12,500 tonnes per day; this is the largest cement kiln in the world, also a 25MW
captive power plant (CPP) was commissioned in October 2010 and another 25MW
CPP will be commissioned in Q1CY11 at Wadi. ACC commissioned 3 MTPA
clinkerisation plant along with a 25MW CPP at Chanda in Maharashtra in November
2010 and would ramp up the plant in H1CY11
Valuation: Raw material cost increase for slag, coal, power has led to margin
pressure for ACC. However with the quasi cartel of the cement players working
since October 2010, we believe that some amount of pricing power will return back
to the cement players in the coming quarters. At current levels of Rs 999, ACC is
trading at 15.8x its CY11E EPS. On EV/EBIDTA ACC is trading at 6.8x its CY11E and
on EV/Ton ACC is available at $121/ton its CY11E capacity. We value ACC at
$130/tonne, at a marginal premium to the replacement cost and recommend a buy
on dip strategy for the stock with a target price of Rs 1064.
No comments:
Post a Comment