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Price hikes across regions boost realisations
ACC’s Q1CY11 realisation catapulted an impressive 11.6% Q-o-Q to
INR 3,893 per tonne on back of price hikes across the country. Total volumes, at
6.16 mt, soared 9.8% Q-o-Q and 10.4% Y-o-Y. Total revenue, at INR 24.2 bn,
rose 16% Q-o-Q and 13.4% Y-o-Y for the quarter. Reported PAT, at INR 3.5 bn,
surged 37% Q-o-Q, largely in line with our estimate.
EBITDA/tonne at INR 900 versus INR 372 in Q4CY10
With overall cost per tonne declining 4% sequentially, EBITDA/tonne soared
142% Q-o-Q. Increase in the cost of raw material (up 33% Q-o-Q per tonne)
and freight (up 5% Q-o-Q per tonne) was offset by decline in power and fuel
cost (down 3% per tonne due to low cost coal inventory, improved efficiency and
increased use of captive power plants) and lower fixed cost Q-o-Q (employee
cost and other expenditure). Fixed costs were high in the previous quarter due
to year-end adjustments. Power and fuel cost for the quarter was INR
777/tonne. Factoring the 30% increase in the cost of domestic coal and 16% Qo-
Q increase in cost of imported coal, we expect power and fuel cost to be INR
892/tonne for CY11, up 15% from Q1CY11.
Expansion update: Chanda plant and power unit II at Wadi operational
ACC has commissioned the 3 mtpa plant in Chanda (Maharashtra) in Q1CY11
and expects production to be ramped up progressively in H2CY11. The second
unit of 25 MW power plant at Wadi (Karnataka) has also commenced operations
during the quarter, taking the total captive power capacity to 360 MW.
Outlook and valuations: Fairly valued; maintain ‘HOLD’
With visible benefits of production discipline in Q4FY11, we expect companies to
be rational and estimate firm pricing environment over the next two years. At
CMP, the stock appears fairly valued at 8.3x CY12E EV/EBITDA. We maintain our
‘HOLD’ recommendation on the stock with ‘Sector Performer’ rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Price hikes across regions boost realisations
ACC’s Q1CY11 realisation catapulted an impressive 11.6% Q-o-Q to
INR 3,893 per tonne on back of price hikes across the country. Total volumes, at
6.16 mt, soared 9.8% Q-o-Q and 10.4% Y-o-Y. Total revenue, at INR 24.2 bn,
rose 16% Q-o-Q and 13.4% Y-o-Y for the quarter. Reported PAT, at INR 3.5 bn,
surged 37% Q-o-Q, largely in line with our estimate.
EBITDA/tonne at INR 900 versus INR 372 in Q4CY10
With overall cost per tonne declining 4% sequentially, EBITDA/tonne soared
142% Q-o-Q. Increase in the cost of raw material (up 33% Q-o-Q per tonne)
and freight (up 5% Q-o-Q per tonne) was offset by decline in power and fuel
cost (down 3% per tonne due to low cost coal inventory, improved efficiency and
increased use of captive power plants) and lower fixed cost Q-o-Q (employee
cost and other expenditure). Fixed costs were high in the previous quarter due
to year-end adjustments. Power and fuel cost for the quarter was INR
777/tonne. Factoring the 30% increase in the cost of domestic coal and 16% Qo-
Q increase in cost of imported coal, we expect power and fuel cost to be INR
892/tonne for CY11, up 15% from Q1CY11.
Expansion update: Chanda plant and power unit II at Wadi operational
ACC has commissioned the 3 mtpa plant in Chanda (Maharashtra) in Q1CY11
and expects production to be ramped up progressively in H2CY11. The second
unit of 25 MW power plant at Wadi (Karnataka) has also commenced operations
during the quarter, taking the total captive power capacity to 360 MW.
Outlook and valuations: Fairly valued; maintain ‘HOLD’
With visible benefits of production discipline in Q4FY11, we expect companies to
be rational and estimate firm pricing environment over the next two years. At
CMP, the stock appears fairly valued at 8.3x CY12E EV/EBITDA. We maintain our
‘HOLD’ recommendation on the stock with ‘Sector Performer’ rating.
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