Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ACC
Profitability impacted in 4Q, recovery ahead; maintain Buy
ACC’s profit beat our estimates due to tax write-back, although
PBT was below estimates due to lower-than-estimated realization
and higher raw material and fuel costs. We expect recovery in CY11
on the back of good volume growth and price hikes over Jan-Feb
’11. We reduce our CY11e net profit 5% and target price to `1,110
from `1,125. We also introduce CY12 estimates. Maintain Buy.
Realization declined 3% yoy and rose 3% qoq to ~`3,495/ton.
Cement volume improved 4.7% yoy and 16% qoq to 5.6m tons.
Commissioning of ACC’s Wadi II kiln (12,500 tpd) in Sep ’10 and
3m-ton Chanda plant in 4QCY10 would drive volume growth. We
expect ACC to register 12% volume CAGR over CY10-12e.
Higher costs dent margin. EBITDA/ton, at ~`500, fell 37% yoy
(up 42% qoq) due to fall in realization and rise in raw material cost
(up `150/ton yoy due to higher purchase of clinker and rise in slag &
flyash prices). Freight cost increased 19% qoq and 6% yoy. Other
expenditure is adjusted for one-time provision of `711m due to
change in basis of identifying obsolescence of spare parts. PAT was
higher than estimated on tax write-back (`820m) related to earlier
years. We expect ACC to benefit from higher cement prices and
volume, leading to better profitability in CY11.
Expansion and outlook. The new 3m-ton cement plant at Chanda
commenced trial production in Nov ’10, boosting capacity to 30m
tons. ACC expects cement demand growth at 9-10% in CY11 and
believes near-term pressure on prices would remain.
Valuation and risks. At our target price of `1,110, the stock would
trade at 8x CY11e EV/EBITDA. The target price implies EV/ton of
US$135 and PE of 14.9x. Key risk: Decline in realization.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ACC
Profitability impacted in 4Q, recovery ahead; maintain Buy
ACC’s profit beat our estimates due to tax write-back, although
PBT was below estimates due to lower-than-estimated realization
and higher raw material and fuel costs. We expect recovery in CY11
on the back of good volume growth and price hikes over Jan-Feb
’11. We reduce our CY11e net profit 5% and target price to `1,110
from `1,125. We also introduce CY12 estimates. Maintain Buy.
Realization declined 3% yoy and rose 3% qoq to ~`3,495/ton.
Cement volume improved 4.7% yoy and 16% qoq to 5.6m tons.
Commissioning of ACC’s Wadi II kiln (12,500 tpd) in Sep ’10 and
3m-ton Chanda plant in 4QCY10 would drive volume growth. We
expect ACC to register 12% volume CAGR over CY10-12e.
Higher costs dent margin. EBITDA/ton, at ~`500, fell 37% yoy
(up 42% qoq) due to fall in realization and rise in raw material cost
(up `150/ton yoy due to higher purchase of clinker and rise in slag &
flyash prices). Freight cost increased 19% qoq and 6% yoy. Other
expenditure is adjusted for one-time provision of `711m due to
change in basis of identifying obsolescence of spare parts. PAT was
higher than estimated on tax write-back (`820m) related to earlier
years. We expect ACC to benefit from higher cement prices and
volume, leading to better profitability in CY11.
Expansion and outlook. The new 3m-ton cement plant at Chanda
commenced trial production in Nov ’10, boosting capacity to 30m
tons. ACC expects cement demand growth at 9-10% in CY11 and
believes near-term pressure on prices would remain.
Valuation and risks. At our target price of `1,110, the stock would
trade at 8x CY11e EV/EBITDA. The target price implies EV/ton of
US$135 and PE of 14.9x. Key risk: Decline in realization.
No comments:
Post a Comment