Ultratech Cement Q4FY11 Result Update; Cement realizations surprise positively; Reduce; Target: Rs 1,050: Emkay

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Ultratech Cement Ltd.

Cement realizations surprise positively

REDUCE

CMP: Rs 1,061                                       Target Price: Rs 1,050

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n     APAT at Rs5.9 bn (85% qoq) – above estimates due to higher cement realizations & lower tax rate. Revenues up 21% qoq- volumes up 11.2%, blended realisations +8.7% qoq

n     Price hikes drives 44.2% qoq growth in EBIDTA to Rs10.2 bn- above est (Rs9.7 bn) - EBITDA/t at Rs954 +30% qoq.  3% Sequential decline in P&F cost, came in as surprise

n     Upgrade FY12 EPS by 6.1% to Rs70.5, introduce FY13 EPS at Rs82.7. Remain concerned on cost as sharp jump in coal price (Domestic & Int’l) yet to reflect in UTCL’s numbers

n     Stock trades at PER of 15X & EV/ton of USD130 on FY12E- 

n     Do not see valuation comfort, considering uncertainty on sustainability of cement prices & sharp jump in coal prices