Shree Cement - EBIDTA in line-Maintain ACCUMULATE ::Emkay

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Shree Cement

EBIDTA in line-Maintain ACCUMULATE

ACCUMULATE

CMP: Rs1,750                                        Target Price: Rs2,050

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n     EBITDA of Rs2.6bn (-10.5% yoy) - in line. PAT-Rs552 mn ahead of est led by lower depreciation. Cement rev grew+12.7% yoy, led by 8.4% growth in volumes & 4% realizations (Rs3405/t)   

n     Total cost increased 3% qoq to Rs2524 led by higher freight, EBIDTA/t at Rs880 improve 4% qoq. Power EBIDTA at Rs220 mn (est-Rs250 mn) decline 44% yoy

n     Cut FY12/13 EBITDA estimates by 7.3%/6.2% led by lower power profitability & higher freight exp-With 7.3% in FY12E EBIDTA, we now expect an FY12 loss of Rs312 mn for Shree   

n     Headwinds for Shree yet to recede-However see resumption of EBIDTA growth from H2FY12 onwards. Valuation at 4.2X EV/E  & EV/t of USD89 remain inexpensive-ACCUMULATE