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Increase in realisation drives margins…
Heidelberg Cement reported net sales of | 272 crore (up 44% QoQ) in line
with our estimate of | 264 crore. Reported EBITDA and PAT of | 41 crore
(down 33% YoY, LTP QoQ) and | 26 crore (down 35% YoY, LTP QoQ)
were ahead of our respective estimates of | 20 crore and | 8 crore on
account of lower than expected input costs, primarily due to savings in
others cost. The EBITDA per tonne improved significantly to | 498 per
tonne as against loss of | 91 per tone in Q4CY10. The company plans to
increase its capacity to 6 MTPA by setting up 3 MTPA of grinding units.
This is expected to drive sales volume growth at 26% CAGR (CY10-12E).
Sales volume up ~25% QoQ, realisation up ~15% QoQ
Cement sales volumes increased ~25% QoQ (~3% YoY) to 0.82
MT, supported by demand pick-up in the central and northern
region markets of the company during the quarter. Net realisation
increased ~15% QoQ (~1% down YoY) to | 3322 per tonne mainly
due to an increase in prices across all regions during the quarter.
EBITDA per tonne improves to | 498 from loss of | 91 in Q4CY10
Sequentially, the EBITDA per tonne has improved significantly to |
498 on account of ~15% increase in realisations coupled with ~5%
decline in total cost. The decline in total cost was mainly due to
savings in employees and others cost. Thus, the EBITDA margin has
improved by 1813 bps QoQ to 15%. On a YoY basis, the EBITDA per
tonne declined ~34% on account of higher costs and flat realisation.
Valuation
At the CMP of | 47, the stock is trading at 24.4x and 19.6x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of 16x
and 10x CY11E and CY12E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $104 and $58 its CY11E and CY12E capacities,
respectively. We are maintaining our HOLD rating on the stock with a
revised target price of | 51 per share on the basis of valuation of $60 per
tonne at CY12E capacity of 6 MTPA.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Increase in realisation drives margins…
Heidelberg Cement reported net sales of | 272 crore (up 44% QoQ) in line
with our estimate of | 264 crore. Reported EBITDA and PAT of | 41 crore
(down 33% YoY, LTP QoQ) and | 26 crore (down 35% YoY, LTP QoQ)
were ahead of our respective estimates of | 20 crore and | 8 crore on
account of lower than expected input costs, primarily due to savings in
others cost. The EBITDA per tonne improved significantly to | 498 per
tonne as against loss of | 91 per tone in Q4CY10. The company plans to
increase its capacity to 6 MTPA by setting up 3 MTPA of grinding units.
This is expected to drive sales volume growth at 26% CAGR (CY10-12E).
Sales volume up ~25% QoQ, realisation up ~15% QoQ
Cement sales volumes increased ~25% QoQ (~3% YoY) to 0.82
MT, supported by demand pick-up in the central and northern
region markets of the company during the quarter. Net realisation
increased ~15% QoQ (~1% down YoY) to | 3322 per tonne mainly
due to an increase in prices across all regions during the quarter.
EBITDA per tonne improves to | 498 from loss of | 91 in Q4CY10
Sequentially, the EBITDA per tonne has improved significantly to |
498 on account of ~15% increase in realisations coupled with ~5%
decline in total cost. The decline in total cost was mainly due to
savings in employees and others cost. Thus, the EBITDA margin has
improved by 1813 bps QoQ to 15%. On a YoY basis, the EBITDA per
tonne declined ~34% on account of higher costs and flat realisation.
Valuation
At the CMP of | 47, the stock is trading at 24.4x and 19.6x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of 16x
and 10x CY11E and CY12E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $104 and $58 its CY11E and CY12E capacities,
respectively. We are maintaining our HOLD rating on the stock with a
revised target price of | 51 per share on the basis of valuation of $60 per
tonne at CY12E capacity of 6 MTPA.
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