Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ULTRATECH CEMENT (UTCEM IN) HOLD
In line with lower cement demand offtake in FY12, we expect UltraTech’s sales
volume to grow by 5% YoY in FY12 and FY13. We have factored in muted
realisation growth in FY12 to reflect the pressure on realisations. Further, we have
accounted for higher fuel and freight costs as coal prices have increased. We have
lowered our FY12E and FY13E net realisations by ~Rs20/mt to reflect the impact
of the recent excise duty hike.
We estimate operating margins to remain flat during FY12 despite weakness in the
grey cement business as we expect realisation in ready mix concrete (RMC), putty
and white cement businesses to improve by ~4% YoY in FY12. These three
businesses constitute ~15% of UltraTech’s sales in FY12. The excise hike has
impacted our FY12 EBITDA and net profits estimates downwards by 3%.
Subsequently, our DCF-based valuation implies a fair value of Rs1,100/share (1%
lower than our earlier estimate of Rs1,114) for UltraTech. The fair value discounts
FY12E and FY13E EBITDA 10x and 7.3x respectively and implies a replacement
cost of US$135/mt.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ULTRATECH CEMENT (UTCEM IN) HOLD
In line with lower cement demand offtake in FY12, we expect UltraTech’s sales
volume to grow by 5% YoY in FY12 and FY13. We have factored in muted
realisation growth in FY12 to reflect the pressure on realisations. Further, we have
accounted for higher fuel and freight costs as coal prices have increased. We have
lowered our FY12E and FY13E net realisations by ~Rs20/mt to reflect the impact
of the recent excise duty hike.
We estimate operating margins to remain flat during FY12 despite weakness in the
grey cement business as we expect realisation in ready mix concrete (RMC), putty
and white cement businesses to improve by ~4% YoY in FY12. These three
businesses constitute ~15% of UltraTech’s sales in FY12. The excise hike has
impacted our FY12 EBITDA and net profits estimates downwards by 3%.
Subsequently, our DCF-based valuation implies a fair value of Rs1,100/share (1%
lower than our earlier estimate of Rs1,114) for UltraTech. The fair value discounts
FY12E and FY13E EBITDA 10x and 7.3x respectively and implies a replacement
cost of US$135/mt.
No comments:
Post a Comment