Shree Cement Operating level performance in line-Maintain ACCUMULATE:Emkay

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Shree Cement

Operating level performance in line-Maintain ACCUMULATE

ACCUMULATE

CMP: Rs 1,836                                       Target Price: Rs 1,960

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n     EBITDA of Rs2.96bn (+88% qoq) - in line with estimates. However accelerated depreciation (on Jaipur grinding unit capitalised in Q4FY11), drags APAT to a meager Rs102mn

n     Revenues of Rs10.7bn (+13.4% yoy) came in exactly in line, led by 6.8% revenue growth in cement revenues (Rs9.5bn) and impressive 121% yoy growth in power revenues (Rs1.2bn)

n     Upgrade FY12 EBITDA by 3.8%, but cut FY12E EPS estimates by to EPS of Rs13.8 on account of revised depreciation guidance. Introduce FY13 estimates with EPS of Rs175

n     Change in FY12 EPS does not affect our target as it’s driven by depreciation (non cash charge). Continue to value Shree on 6X FY12 EV/E. Maintain ACCUMULATE. Target - Rs1,960