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R i s i n g c o s t s h u r t m a r g i n s …
ACC reported net sales of | 2403 crore (up 19% YoY, flat QoQ) and net
profit of | 337 crore (down ~6% YoY, ~4% QoQ), which were higher
than our respective estimates of | 2301 crore and | 244 crore. This was
on account of higher-than-expected realisation, which increased ~6%
YoY (~5% QoQ) to | 4052/tonne vs. our expectation of | 3899/tonne.
EBITDA/tonne declined ~12% YoY to | 928/tonne (our estimate: |
739/tonne). Going forward, we expect cement sales volume of 24 MT in
CY11E (~13% YoY) and 25.5 MT in CY12E (~6% YoY). However, with
increased cost pressure coupled with fall in realisations, we expect
margins to remain under pressure. We expect EBITDA of | 680/tonne in
CY11E and | 733/tonne in CY12E.
ƒ Volume up ~12% YoY (down ~5% QoQ), realisation up ~5% QoQ
Sales volumes increased ~12% YoY to 5.93 MTPA in Q2CY11 on
account of capacity additions by the company at Chanda,
Maharashtra and Wadi, Karnataka. Realisation improved ~6% YoY
and ~5% QoQ to | 4052 per tonne, which was aided by an increase
in cement prices across all regions during March-April 2011.
ƒ EBITDA/tonne declines ~12% YoY (improves ~4% QoQ)
Total cost increased ~12% YoY (~6% QoQ) to | 3124/tonne, mainly
on account of an increase in power & fuel cost and freight cost due
to higher coal and diesel prices. Thus, despite higher realisations,
EBITDA declined ~12% YoY to | 928/tonne.
V a l u a t i o n
At the CMP of | 1022, the stock is trading at 19.4x and 16.3x its CY11E
and CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
10.1x and 8.6x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $117 and $114 its CY11E and CY12E
capacities, respectively. We are assigning a HOLD rating to the stock with
a revised target price of | 1105 per share. At the target price, the stock is
trading at $132/tonne at CY11E capacity of 30.5 MTPA, which is in line
with the current replacement cost.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R i s i n g c o s t s h u r t m a r g i n s …
ACC reported net sales of | 2403 crore (up 19% YoY, flat QoQ) and net
profit of | 337 crore (down ~6% YoY, ~4% QoQ), which were higher
than our respective estimates of | 2301 crore and | 244 crore. This was
on account of higher-than-expected realisation, which increased ~6%
YoY (~5% QoQ) to | 4052/tonne vs. our expectation of | 3899/tonne.
EBITDA/tonne declined ~12% YoY to | 928/tonne (our estimate: |
739/tonne). Going forward, we expect cement sales volume of 24 MT in
CY11E (~13% YoY) and 25.5 MT in CY12E (~6% YoY). However, with
increased cost pressure coupled with fall in realisations, we expect
margins to remain under pressure. We expect EBITDA of | 680/tonne in
CY11E and | 733/tonne in CY12E.
ƒ Volume up ~12% YoY (down ~5% QoQ), realisation up ~5% QoQ
Sales volumes increased ~12% YoY to 5.93 MTPA in Q2CY11 on
account of capacity additions by the company at Chanda,
Maharashtra and Wadi, Karnataka. Realisation improved ~6% YoY
and ~5% QoQ to | 4052 per tonne, which was aided by an increase
in cement prices across all regions during March-April 2011.
ƒ EBITDA/tonne declines ~12% YoY (improves ~4% QoQ)
Total cost increased ~12% YoY (~6% QoQ) to | 3124/tonne, mainly
on account of an increase in power & fuel cost and freight cost due
to higher coal and diesel prices. Thus, despite higher realisations,
EBITDA declined ~12% YoY to | 928/tonne.
V a l u a t i o n
At the CMP of | 1022, the stock is trading at 19.4x and 16.3x its CY11E
and CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
10.1x and 8.6x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $117 and $114 its CY11E and CY12E
capacities, respectively. We are assigning a HOLD rating to the stock with
a revised target price of | 1105 per share. At the target price, the stock is
trading at $132/tonne at CY11E capacity of 30.5 MTPA, which is in line
with the current replacement cost.
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