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Better realisation, tax gain boost profit…
UltraTech reported a net profit of ~| 727 crore (up 128% QoQ), which
was higher than our estimate of | 525 crore on account of lower than
expected tax outgo. However, net sales of | 4490 crore (up 21% QoQ)
and EBITDA of | 1021 crore (up 44% QoQ) were in line with our
respective estimates of | 4489 crore and | 1018 crore. The EBITDA
margin has increased by 369 bps QoQ to 22.7%. Blended EBITDA per
tonne increased 28.5% QoQ to | 928 per tonne on the back of better net
realisations during the quarter, which increased by ~8% on a sequential
basis.
�� Growth in volumes, realisation on slight demand recovery
Blended sales volumes (cement and clinker) increased ~6% QoQ to
10.37 million tonnes (MT) while blended realisation improved ~11%
QoQ to | 3553 per tonne. Volumes were higher during the quarter
on account of a slight recovery in demand due to a pick-up in
construction activities.
�� EBITDA/tonne improves ~29% QoQ to | 928 per tonne
The EBITDA per tonne increased ~29% QoQ to | 928 per tonne as
the net realisation improved ~8% QoQ. The total cost per tonne
increased ~3% QoQ at | 3154 per tonne as the increase in raw
material and other cost was negated by the decline in power and
fuel cost. Sequentially, the raw material cost and other cost surged
~9% and ~10%, respectively, while P&F cost dipped sequentially.
Valuation
At the CMP of | 1060, the stock is trading at 18.4x and 15.8x its FY12E and
FY13E earnings, respectively. It is trading at an EV/EBITDA of 10.9x and
9.6x its FY12E and FY13E EBITDA, respectively. On an EV/tonne basis, the
stock is trading at $144 and $146 its FY12E and FY13E capacities,
respectively. We have valued the company at $140 per tonne at its FY13E
capacity of 51.9 MTPA. We maintain our HOLD rating on the stock with a
target price of | 1011 per share.
Net sales increase ~21% QoQ; realisation up ~11% QoQ, cement volumes up~6% QoQ
Net sales soared ~21% QoQ to | 4490 crore supported by ~6% QoQ
growth in blended sales volume (cement and clinker) to 10.37 MT and
improvement in blended realisation by ~11% QoQ to | 3553 per tonne.
During the quarter, the company benefited from higher cement prices in
southern and western regions where its despatches were more than half
of its total output. Cement prices in the southern region saw a steep hike
on account of production discipline.
EBITDA per tonne increases ~29% QoQ to | 928 per tonne
The EBITDA per tonne increased ~29% QoQ to | 928 per tonne on
account of flattish growth (~3% QoQ) in total cost per tonne while net
realisation improved ~8% QoQ during the same period.
The net raw material cost (after stock adjustment) increased ~9% QoQ to
| 540 per tonne on account of an escalation in prices of important inputs
such as fly ash and slag during the quarter. The freight cost remained flat
0.3% on a sequential basis to | 746 per tonne.
Power & fuel cost dipped by 4% sequentially at | 878 per tonne, which
can mainly be attributed to maintenance of coal inventory and decrease in
dependency on grid. Further, prices of domestic coal shot up by 30% per
tonne in March 2011. The impact of this will be seen in Q1FY12.
On a sequential basis, the employee cost increased by 3% to | 197 per
tonne while the other expenditure increased by ~10% at | 793 per tonne
due to one-time maintenance expenditure. Finally, after adjusting all
major input costs, the total cost increased by ~3% QoQ at | 3154 per
tonne.
Net profit increases ~127% QoQ on tax provision reversal
The net profit of the company zoomed by ~128% QoQ to ~| 727 crore in
Q4FY11 as against | 319 crore in Q3FY11, mainly due to tax provision
reversal of | 115 crore in Q4FY11 and better than expected growth in
other income by 80% to |109 crore. Depreciation cost increased by ~4%
QoQ to ~| 227 crore while interest cost remained flat at ~| 83 crore
Capex plan
The company has a capital outlay of | 11000 crore for the next three
years. This includes setting up of additional clinkerisation plants at
Chhattisgarh and Karnataka along with grinding units and packaging
terminals and ready mix concrete across various states. The clinker and
grinding units are expected to come on stream by Q2FY14E. After these
expansions of 9.2 MTPA, the company will have an installed capacity of
~61 MTPA.
Valuations
After the merger with Samruddhi Cement, UltraTech became the largest
cement manufacturer with installed capacity of 48.9 MTPA. Moreover,
after the acquisition of UAE based Star Cement, its installed capacity has
reached 51.9 MTPA.
At the CMP of | 1060, the stock is trading at 18.4x and 15.8x its FY12E and
FY13E earnings, respectively. It is trading at an EV/EBITDA of 10.9x and
9.6x its FY12E and FY13E EBITDA, respectively. On an EV/tonne basis, the
stock is trading at $144 and $146 its FY12E and FY13E capacities,
respectively. We have valued the company at $140 per tonne at its FY13E
capacity of 51.9 MTPA. We maintain our HOLD rating on the stock with a
target price of | 1011 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Better realisation, tax gain boost profit…
UltraTech reported a net profit of ~| 727 crore (up 128% QoQ), which
was higher than our estimate of | 525 crore on account of lower than
expected tax outgo. However, net sales of | 4490 crore (up 21% QoQ)
and EBITDA of | 1021 crore (up 44% QoQ) were in line with our
respective estimates of | 4489 crore and | 1018 crore. The EBITDA
margin has increased by 369 bps QoQ to 22.7%. Blended EBITDA per
tonne increased 28.5% QoQ to | 928 per tonne on the back of better net
realisations during the quarter, which increased by ~8% on a sequential
basis.
�� Growth in volumes, realisation on slight demand recovery
Blended sales volumes (cement and clinker) increased ~6% QoQ to
10.37 million tonnes (MT) while blended realisation improved ~11%
QoQ to | 3553 per tonne. Volumes were higher during the quarter
on account of a slight recovery in demand due to a pick-up in
construction activities.
�� EBITDA/tonne improves ~29% QoQ to | 928 per tonne
The EBITDA per tonne increased ~29% QoQ to | 928 per tonne as
the net realisation improved ~8% QoQ. The total cost per tonne
increased ~3% QoQ at | 3154 per tonne as the increase in raw
material and other cost was negated by the decline in power and
fuel cost. Sequentially, the raw material cost and other cost surged
~9% and ~10%, respectively, while P&F cost dipped sequentially.
Valuation
At the CMP of | 1060, the stock is trading at 18.4x and 15.8x its FY12E and
FY13E earnings, respectively. It is trading at an EV/EBITDA of 10.9x and
9.6x its FY12E and FY13E EBITDA, respectively. On an EV/tonne basis, the
stock is trading at $144 and $146 its FY12E and FY13E capacities,
respectively. We have valued the company at $140 per tonne at its FY13E
capacity of 51.9 MTPA. We maintain our HOLD rating on the stock with a
target price of | 1011 per share.
Net sales increase ~21% QoQ; realisation up ~11% QoQ, cement volumes up~6% QoQ
Net sales soared ~21% QoQ to | 4490 crore supported by ~6% QoQ
growth in blended sales volume (cement and clinker) to 10.37 MT and
improvement in blended realisation by ~11% QoQ to | 3553 per tonne.
During the quarter, the company benefited from higher cement prices in
southern and western regions where its despatches were more than half
of its total output. Cement prices in the southern region saw a steep hike
on account of production discipline.
EBITDA per tonne increases ~29% QoQ to | 928 per tonne
The EBITDA per tonne increased ~29% QoQ to | 928 per tonne on
account of flattish growth (~3% QoQ) in total cost per tonne while net
realisation improved ~8% QoQ during the same period.
The net raw material cost (after stock adjustment) increased ~9% QoQ to
| 540 per tonne on account of an escalation in prices of important inputs
such as fly ash and slag during the quarter. The freight cost remained flat
0.3% on a sequential basis to | 746 per tonne.
Power & fuel cost dipped by 4% sequentially at | 878 per tonne, which
can mainly be attributed to maintenance of coal inventory and decrease in
dependency on grid. Further, prices of domestic coal shot up by 30% per
tonne in March 2011. The impact of this will be seen in Q1FY12.
On a sequential basis, the employee cost increased by 3% to | 197 per
tonne while the other expenditure increased by ~10% at | 793 per tonne
due to one-time maintenance expenditure. Finally, after adjusting all
major input costs, the total cost increased by ~3% QoQ at | 3154 per
tonne.
Net profit increases ~127% QoQ on tax provision reversal
The net profit of the company zoomed by ~128% QoQ to ~| 727 crore in
Q4FY11 as against | 319 crore in Q3FY11, mainly due to tax provision
reversal of | 115 crore in Q4FY11 and better than expected growth in
other income by 80% to |109 crore. Depreciation cost increased by ~4%
QoQ to ~| 227 crore while interest cost remained flat at ~| 83 crore
Capex plan
The company has a capital outlay of | 11000 crore for the next three
years. This includes setting up of additional clinkerisation plants at
Chhattisgarh and Karnataka along with grinding units and packaging
terminals and ready mix concrete across various states. The clinker and
grinding units are expected to come on stream by Q2FY14E. After these
expansions of 9.2 MTPA, the company will have an installed capacity of
~61 MTPA.
Valuations
After the merger with Samruddhi Cement, UltraTech became the largest
cement manufacturer with installed capacity of 48.9 MTPA. Moreover,
after the acquisition of UAE based Star Cement, its installed capacity has
reached 51.9 MTPA.
At the CMP of | 1060, the stock is trading at 18.4x and 15.8x its FY12E and
FY13E earnings, respectively. It is trading at an EV/EBITDA of 10.9x and
9.6x its FY12E and FY13E EBITDA, respectively. On an EV/tonne basis, the
stock is trading at $144 and $146 its FY12E and FY13E capacities,
respectively. We have valued the company at $140 per tonne at its FY13E
capacity of 51.9 MTPA. We maintain our HOLD rating on the stock with a
target price of | 1011 per share.
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