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Result Reviews
Ambuja Cements – 4QCY2010
During 4QCY2010 Ambuja Cements’ top line remained flat on a yoy basis at `1,788cr,
despite a 7.1% increase in dispatches to 4.99mn tonnes. The muted performance on the topline
front was on account of a 5.8% decline in realisations to ~`3,583/tonne. OPM declined
by 291bp on a yoy basis to 22.2% on account of higher power and fuel costs. The
company’s per tonne power and fuel costs rose by 27.3% yoy to `894. EBITDA/tonne of
cement declined by 21.1% yoy to `736, although it was higher by 13% on a qoq basis. On
the bottom-line front, net profit for the quarter rose by 7% yoy to `258cr, due to lower
effective tax rates. We continue to remain Neutral on the stock.
ACC – 4QCY2010
During 4QCY2010, ACC’s net sales grew marginally by 1.9%, primarily on account of a
6.7% increase in dispatches to 5.58mn tonnes. However, realisations declined by ~4.5% yoy
to `3,508. OPM declined by 829bp on a yoy basis to 17.4% on account of higher power
and fuel costs, and lower realisations. However, on a qoq basis, OPM rose by 386bp due to
improvement in realisations in the southern region, which is one of the major markets of the
company. On the bottom-line front, net profit for the quarter declined by 8.8% yoy to
`256cr, above our estimates, on account of lower effective tax rates. We continue to remain
Neutral on the stock.
Motherson Sumi Systems – 3QFY2011
For 3QFY2011, Motherson Sumi Systems (MSSL) registered strong 18.6% yoy and ~10%
qoq growth in net sales to `2,153cr (`1,815cr), which was 6.6% ahead of our expectations.
Sales growth was driven by growth in domestic revenue, which grew by robust ~62% yoy
and 14% qoq to `863cr. However, a marginal decline in revenue outside India and a muted
performance at Samvardhana Motherson Reflectec (SMR) in INR terms arrested revenue
growth during the quarter. Noticeably, SMR revenue in Euro terms increased by ~13% yoy
during the quarter. On the operating front, the company reported a 62bp yoy increase in
EBITDA margins to 11.6%; better than our expectations of 10.5%. Raw-material costs during
the quarter increased by 112bp yoy and accounted for 63.5% of net sales v/s 62.4% in
3QFY2011, while staff cost and other expenditure declined by 113bp and 87bp yoy,
respectively, which supported the expansion in operating margin. Net profit for the quarter
came in above our expectation at `106.4r, largely on account of improved performance at
the operating level. Further, lower tax outgo helped the company to a certain extent.
At current levels, the stock is trading at 21.3x FY2011E and 16x FY2012E. We will revisit our
estimates and rating post the conference call and release a detailed report thereafter.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Result Reviews
Ambuja Cements – 4QCY2010
During 4QCY2010 Ambuja Cements’ top line remained flat on a yoy basis at `1,788cr,
despite a 7.1% increase in dispatches to 4.99mn tonnes. The muted performance on the topline
front was on account of a 5.8% decline in realisations to ~`3,583/tonne. OPM declined
by 291bp on a yoy basis to 22.2% on account of higher power and fuel costs. The
company’s per tonne power and fuel costs rose by 27.3% yoy to `894. EBITDA/tonne of
cement declined by 21.1% yoy to `736, although it was higher by 13% on a qoq basis. On
the bottom-line front, net profit for the quarter rose by 7% yoy to `258cr, due to lower
effective tax rates. We continue to remain Neutral on the stock.
ACC – 4QCY2010
During 4QCY2010, ACC’s net sales grew marginally by 1.9%, primarily on account of a
6.7% increase in dispatches to 5.58mn tonnes. However, realisations declined by ~4.5% yoy
to `3,508. OPM declined by 829bp on a yoy basis to 17.4% on account of higher power
and fuel costs, and lower realisations. However, on a qoq basis, OPM rose by 386bp due to
improvement in realisations in the southern region, which is one of the major markets of the
company. On the bottom-line front, net profit for the quarter declined by 8.8% yoy to
`256cr, above our estimates, on account of lower effective tax rates. We continue to remain
Neutral on the stock.
Motherson Sumi Systems – 3QFY2011
For 3QFY2011, Motherson Sumi Systems (MSSL) registered strong 18.6% yoy and ~10%
qoq growth in net sales to `2,153cr (`1,815cr), which was 6.6% ahead of our expectations.
Sales growth was driven by growth in domestic revenue, which grew by robust ~62% yoy
and 14% qoq to `863cr. However, a marginal decline in revenue outside India and a muted
performance at Samvardhana Motherson Reflectec (SMR) in INR terms arrested revenue
growth during the quarter. Noticeably, SMR revenue in Euro terms increased by ~13% yoy
during the quarter. On the operating front, the company reported a 62bp yoy increase in
EBITDA margins to 11.6%; better than our expectations of 10.5%. Raw-material costs during
the quarter increased by 112bp yoy and accounted for 63.5% of net sales v/s 62.4% in
3QFY2011, while staff cost and other expenditure declined by 113bp and 87bp yoy,
respectively, which supported the expansion in operating margin. Net profit for the quarter
came in above our expectation at `106.4r, largely on account of improved performance at
the operating level. Further, lower tax outgo helped the company to a certain extent.
At current levels, the stock is trading at 21.3x FY2011E and 16x FY2012E. We will revisit our
estimates and rating post the conference call and release a detailed report thereafter.
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