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R e a l i s a t i o n g a i n l e a d s t o s p u r t i n e a r n i n g s…
JK Cement’s Q1FY12 net sales of | 605 crore and net profit of | 49.9 crore
were ahead of our respective estimates of | 564 crore and | 22 crore. This
was on account of higher-than-expected blended realisation, which
increased ~10% YoY (~5% QoQ) to | 4273/tonne against our estimate of
| 3930/tonne. Blended EBITDA improved ~36% YoY (~30% QoQ) to |
908/tonne (our estimate: | 625/tonne) due to a significant rise in
realisation. Grey cement volumes remained muted in Q1FY12 as it
increased ~4% YoY and declined ~13% QoQ. Going forward, we expect
the blended sales volume to increase ~6% YoY in FY12E and ~11% YoY
in FY13E. Also, the company is setting up a 3.5 MT brownfield expansion
at Mangrol, Rajasthan, which would take the company’s grey cement
capacity to 11 MTPA by FY14E.
ƒ Blended cement volume up ~5% YoY, realisation up ~10% YoY
Grey cement sales volumes increased ~4% YoY to 1.33 MT but
declined ~13% QoQ. Grey cement realisation improved ~8% YoY
(~5% QoQ) to | 3650/tonne due to significant price hikes across its
markets during March-April 2011. White cement sales volume
increased ~26% YoY (declined ~17% QoQ) to 0.09 lakh tonnes
while white cement realisation improved ~6% YoY (~9% QoQ).
ƒ Blended EBITDA improves ~36% YoY (~30% QoQ) to | 908/tonne
The blended EBITDA has improved significantly by ~36% YoY
(~30% QoQ) to | 908/tonne on the back of a sharp increase in
realisations. Thus, the OPM has improved by 404 bps YoY (398 bps
QoQ) to 21.3%.
V a l u a t i o n
At the CMP of | 113, the stock is trading at 9.5x and 7.3x its FY12E and
FY13E earnings, respectively. The stock is trading at an EV/EBITDA of 5.8x
and 6.3x FY12E and FY13E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $51 and $57 its FY12E and FY13E capacities,
respectively. We have valued the stock at $75/tonne (~40% discount to
the replacement cost) at its FY13E blended capacity of 7.5 MT. We have
assigned a HOLD rating to the stock with a target price of | 123/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R e a l i s a t i o n g a i n l e a d s t o s p u r t i n e a r n i n g s…
JK Cement’s Q1FY12 net sales of | 605 crore and net profit of | 49.9 crore
were ahead of our respective estimates of | 564 crore and | 22 crore. This
was on account of higher-than-expected blended realisation, which
increased ~10% YoY (~5% QoQ) to | 4273/tonne against our estimate of
| 3930/tonne. Blended EBITDA improved ~36% YoY (~30% QoQ) to |
908/tonne (our estimate: | 625/tonne) due to a significant rise in
realisation. Grey cement volumes remained muted in Q1FY12 as it
increased ~4% YoY and declined ~13% QoQ. Going forward, we expect
the blended sales volume to increase ~6% YoY in FY12E and ~11% YoY
in FY13E. Also, the company is setting up a 3.5 MT brownfield expansion
at Mangrol, Rajasthan, which would take the company’s grey cement
capacity to 11 MTPA by FY14E.
ƒ Blended cement volume up ~5% YoY, realisation up ~10% YoY
Grey cement sales volumes increased ~4% YoY to 1.33 MT but
declined ~13% QoQ. Grey cement realisation improved ~8% YoY
(~5% QoQ) to | 3650/tonne due to significant price hikes across its
markets during March-April 2011. White cement sales volume
increased ~26% YoY (declined ~17% QoQ) to 0.09 lakh tonnes
while white cement realisation improved ~6% YoY (~9% QoQ).
ƒ Blended EBITDA improves ~36% YoY (~30% QoQ) to | 908/tonne
The blended EBITDA has improved significantly by ~36% YoY
(~30% QoQ) to | 908/tonne on the back of a sharp increase in
realisations. Thus, the OPM has improved by 404 bps YoY (398 bps
QoQ) to 21.3%.
V a l u a t i o n
At the CMP of | 113, the stock is trading at 9.5x and 7.3x its FY12E and
FY13E earnings, respectively. The stock is trading at an EV/EBITDA of 5.8x
and 6.3x FY12E and FY13E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $51 and $57 its FY12E and FY13E capacities,
respectively. We have valued the stock at $75/tonne (~40% discount to
the replacement cost) at its FY13E blended capacity of 7.5 MT. We have
assigned a HOLD rating to the stock with a target price of | 123/share.
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