Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ACC: Cost pressure erodes margins…
ACC reported net sales of | 1958 crore (up 2% YoY, 20% QoQ) in line
with our estimate of | 1976 crore. EBITDA of | 209 crore (down 54%
YoY, up 24% QoQ) was below our estimate of | 319 crore on account of
higher than expected input costs. Net profit of | 256 crore (down 15%
YoY, up 156% QoQ) was ahead of our estimate of | 196 crore on the
back of tax write-back of | 82 crore during the quarter. Realisation
improved 3.5% QoQ during Q4CY10 but was mitigated by the 3.2%
QoQ increase in total cost per tonne. EBITDA per tonne improved
marginally to | 375 per tonne in Q4CY10 (our estimate: | 572 per tonne)
from | 352 per tonne in Q3CY10. Going forward, we expect realisation
to improve but increase in input costs would keep margins under
pressure. We estimate EBITDA of | 623 per tonne in CY11E and | 758
per tonne in CY12E.
Volume increases ~4% YoY (~15% QoQ), realisation up 3.5% QoQ
Sales volume increased ~4% YoY (~15% QoQ) to 5.6 MTPA in
Q4CY10. Realisation improved 3.5% QoQ to | 3508 per tonne.
Realisation was aided by an increase in cement prices in the
southern region during the quarter where the company sells ~30%
of its cement output.
EBITDA/tonne declines ~55% YoY; improves 6.5% QoQ
The company reported an EBITDA of | 375 per tonne, which
declined ~55% YoY on account of ~2% YoY decline in realisation
and ~14% increase in total cost per tonne. Sequentially, EBITDA per
tonne improved marginally as the 3.5% increase in realisation was
mitigated by an increase in input costs.
Valuation
At the CMP of | 984, the stock is trading at 21.5x and 17x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
11.8x and 8.9x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $120 and $118 its CY11E and CY12E
capacities, respectively. We are maintaining our ADD rating on the stock
with a target price of | 1015 per share. At the target price, the stock is
trading at $125/tonne at CY11E capacity of 30.5 MTPA, which is the
current replacement cost.
Net sales increase ~2% YoY and ~20% QoQ
Net sales have increased ~2% YoY to | 1957.6 crore in Q4CY10 as the
impact of increase in sales volume was negated by the decline in
realisation. Sales volumes increased ~4% YoY to 5.6 MTPA while the
realisation declined ~2% YoY to | 3508 per tonne. On a QoQ basis, net
sales have increased ~20% on account of ~15% QoQ rise in volume and
3.5% QoQ improvement in realisation. Realisation was aided by an
increase in cement prices in the southern region during the quarter where
the company sells ~30% of its cement output.
EBITDA margin declines by 1276 bps YoY but improves 30 bps QoQ
The power & fuel cost has increased ~10% YoY and ~8% QoQ to | 809
per tonne on account of an increase in coal prices and increase in tariff
rates of purchased power. The freight cost has increased ~8% YoY and
~15% QoQ to | 537 per tonne on account of an increase in freight tariff
rates. The raw material cost has increased ~27% YoY and ~8% QoQ to |
557 per tonne on the back of higher purchase of clinker and increase in
slag, fly ash and gypsum prices. The employee cost has jumped sharply
by ~98% YoY and ~9% QoQ to | 266 per tonne due to increased
provisioning for employee benefits. The other expenditure has increased
~6% YoY and ~14% QoQ to | 1081 per tonne on account of an increase
in repair & maintenance expenses, royalty, packing material cost and
advertising & consultancy expenses.
Thus, on a YoY basis, the total cost has increased ~14% to | 3134 per
tonne. Hence, the EBITDA has declined ~55% YoY to | 375 per tonne due
to cost increases coupled with a decline in realisation. Sequentially,
EBITDA per tonne improved marginally as the ~3.5% increase in
realisation was mitigated by the ~3% increase in total cost per tonne. The
EBITDA margin has declined by 1276 bps YoY to 10.7% in Q4CY10
against 23.4% in Q4CY09. However, the margin improved marginally by
30 bps QoQ.
Net profit declines ~15 YoY; but increases ~156% QoQ on tax write back
The reported net profit has declined ~15% YoY to | 255.9 crore on
account of ~54% YoY decline in operating profit led by low realisations
and higher input costs. On a QoQ basis, the net profit increased ~156%
on account of a marginal improvement in operating margin and tax write
back of | 82 crore during the quarter (but pertaining to the full year).
Other income increased ~88% YoY and ~92% QoQ to | 155.4 crore as it
includes | 64.5 crore arising due to a write-back of provision.
Capex plan
The clinker capacity expansion of 3 MTPA at Chanda, Maharashtra
commenced trail production during the quarter. The company has also
commissioned the grinding expansion of 12500 TPD at Wadi, Karnataka.
After the commissioning of these capacities, total installed capacity has
reached 30.5 MTPA. The thermal captive power plant (CPP) expansion of
25 MW at Wadi, Karnataka was commissioned during the quarter and the
second unit of 25 MW is expected to be commissioned by Q1CY11E.
Valuations
After completion of the 3 MTPA expansion plan at Chanda, Maharashtra,
the installed capacity has reached 30.5 MTPA. Considering the capacity
expansion, we expect volume growth of ~6% CAGR (CY10-12E). The
realisation is expected to improve by 3.5% YoY in CY11E and ~5% YoY
in CY12E. However, the increase in input costs would keep margins under
pressure. We estimate EBITDA of | 623 per tonne in CY11E and | 758 per
tonne in CY12E.
At the CMP of | 984, the stock is trading at 21.5x and 17x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
11.8x and 8.9x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $120 and $118 its CY11E and CY12E
capacities, respectively. We are maintaining our ADD rating on the stock
with a target price of | 1015 per share. At the target price, the stock is
trading at $125/tonne at CY11E capacity of 30.5 MTPA, which is the
current replacement cost.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ACC: Cost pressure erodes margins…
ACC reported net sales of | 1958 crore (up 2% YoY, 20% QoQ) in line
with our estimate of | 1976 crore. EBITDA of | 209 crore (down 54%
YoY, up 24% QoQ) was below our estimate of | 319 crore on account of
higher than expected input costs. Net profit of | 256 crore (down 15%
YoY, up 156% QoQ) was ahead of our estimate of | 196 crore on the
back of tax write-back of | 82 crore during the quarter. Realisation
improved 3.5% QoQ during Q4CY10 but was mitigated by the 3.2%
QoQ increase in total cost per tonne. EBITDA per tonne improved
marginally to | 375 per tonne in Q4CY10 (our estimate: | 572 per tonne)
from | 352 per tonne in Q3CY10. Going forward, we expect realisation
to improve but increase in input costs would keep margins under
pressure. We estimate EBITDA of | 623 per tonne in CY11E and | 758
per tonne in CY12E.
Volume increases ~4% YoY (~15% QoQ), realisation up 3.5% QoQ
Sales volume increased ~4% YoY (~15% QoQ) to 5.6 MTPA in
Q4CY10. Realisation improved 3.5% QoQ to | 3508 per tonne.
Realisation was aided by an increase in cement prices in the
southern region during the quarter where the company sells ~30%
of its cement output.
EBITDA/tonne declines ~55% YoY; improves 6.5% QoQ
The company reported an EBITDA of | 375 per tonne, which
declined ~55% YoY on account of ~2% YoY decline in realisation
and ~14% increase in total cost per tonne. Sequentially, EBITDA per
tonne improved marginally as the 3.5% increase in realisation was
mitigated by an increase in input costs.
Valuation
At the CMP of | 984, the stock is trading at 21.5x and 17x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
11.8x and 8.9x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $120 and $118 its CY11E and CY12E
capacities, respectively. We are maintaining our ADD rating on the stock
with a target price of | 1015 per share. At the target price, the stock is
trading at $125/tonne at CY11E capacity of 30.5 MTPA, which is the
current replacement cost.
Net sales increase ~2% YoY and ~20% QoQ
Net sales have increased ~2% YoY to | 1957.6 crore in Q4CY10 as the
impact of increase in sales volume was negated by the decline in
realisation. Sales volumes increased ~4% YoY to 5.6 MTPA while the
realisation declined ~2% YoY to | 3508 per tonne. On a QoQ basis, net
sales have increased ~20% on account of ~15% QoQ rise in volume and
3.5% QoQ improvement in realisation. Realisation was aided by an
increase in cement prices in the southern region during the quarter where
the company sells ~30% of its cement output.
EBITDA margin declines by 1276 bps YoY but improves 30 bps QoQ
The power & fuel cost has increased ~10% YoY and ~8% QoQ to | 809
per tonne on account of an increase in coal prices and increase in tariff
rates of purchased power. The freight cost has increased ~8% YoY and
~15% QoQ to | 537 per tonne on account of an increase in freight tariff
rates. The raw material cost has increased ~27% YoY and ~8% QoQ to |
557 per tonne on the back of higher purchase of clinker and increase in
slag, fly ash and gypsum prices. The employee cost has jumped sharply
by ~98% YoY and ~9% QoQ to | 266 per tonne due to increased
provisioning for employee benefits. The other expenditure has increased
~6% YoY and ~14% QoQ to | 1081 per tonne on account of an increase
in repair & maintenance expenses, royalty, packing material cost and
advertising & consultancy expenses.
Thus, on a YoY basis, the total cost has increased ~14% to | 3134 per
tonne. Hence, the EBITDA has declined ~55% YoY to | 375 per tonne due
to cost increases coupled with a decline in realisation. Sequentially,
EBITDA per tonne improved marginally as the ~3.5% increase in
realisation was mitigated by the ~3% increase in total cost per tonne. The
EBITDA margin has declined by 1276 bps YoY to 10.7% in Q4CY10
against 23.4% in Q4CY09. However, the margin improved marginally by
30 bps QoQ.
Net profit declines ~15 YoY; but increases ~156% QoQ on tax write back
The reported net profit has declined ~15% YoY to | 255.9 crore on
account of ~54% YoY decline in operating profit led by low realisations
and higher input costs. On a QoQ basis, the net profit increased ~156%
on account of a marginal improvement in operating margin and tax write
back of | 82 crore during the quarter (but pertaining to the full year).
Other income increased ~88% YoY and ~92% QoQ to | 155.4 crore as it
includes | 64.5 crore arising due to a write-back of provision.
Capex plan
The clinker capacity expansion of 3 MTPA at Chanda, Maharashtra
commenced trail production during the quarter. The company has also
commissioned the grinding expansion of 12500 TPD at Wadi, Karnataka.
After the commissioning of these capacities, total installed capacity has
reached 30.5 MTPA. The thermal captive power plant (CPP) expansion of
25 MW at Wadi, Karnataka was commissioned during the quarter and the
second unit of 25 MW is expected to be commissioned by Q1CY11E.
Valuations
After completion of the 3 MTPA expansion plan at Chanda, Maharashtra,
the installed capacity has reached 30.5 MTPA. Considering the capacity
expansion, we expect volume growth of ~6% CAGR (CY10-12E). The
realisation is expected to improve by 3.5% YoY in CY11E and ~5% YoY
in CY12E. However, the increase in input costs would keep margins under
pressure. We estimate EBITDA of | 623 per tonne in CY11E and | 758 per
tonne in CY12E.
At the CMP of | 984, the stock is trading at 21.5x and 17x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
11.8x and 8.9x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $120 and $118 its CY11E and CY12E
capacities, respectively. We are maintaining our ADD rating on the stock
with a target price of | 1015 per share. At the target price, the stock is
trading at $125/tonne at CY11E capacity of 30.5 MTPA, which is the
current replacement cost.
No comments:
Post a Comment