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India Cements
For 2QFY2012, India Cements registered 29.5% yoy growth in its top line to
`1,092cr, mainly on account of a substantial 44.9% yoy increase in cement
realization to `4,223/tonne. However, the company’s dispatches fell by 10.4% yoy
to 2.43mn tones, as cement demand continued to slide down in south India, which
is the company’s major market. The southern region posted a 4.1% yoy decline in
demand during the quarter. OPM rose by 1,972bp yoy to 23.3% due to better
cement realization despite increased raw material, power and fuel, and freight
costs. Power and fuel cost per tonne increased by 18% yoy during the quarter on
account on higher coal imports (due to strike in Singareni coal fields) and INR
depreciation. Further, interest cost rose substantially by 220.2% yoy to `89cr
(including `24cr forex translation loss) on account of replacement of US$75mn
FCCBs (along with premium of `178cr) with domestic debt and higher utilization of
working capital limits. The bottom line stood at `70cr (loss of `34cr in 2QFY2011),
which was better than our expectation of `31cr. We maintain our Neutral view on
the stock.
Amara Raja Batteries
Amara Raja Batteries (AMRJ) posted impressive 42.8% yoy (6.7% qoq) growth in its
top line to `560cr. Top-line growth was led by growth in the industrial battery
segment and stable performance by the automotive battery segment. During
2QFY2012, the company’s operating margin witnessed a 157bp yoy (strong
282bp qoq) expansion to 15.7%, led by 351bp and 133bp yoy contraction in
other expenditure and staff costs as a percentage of sales, respectively. Rawmaterial
cost as a percentage of sales, however, increased by 320bp yoy mainly
due to increased lead prices. Operating and net profit registered substantial 58.6%
yoy (30% qoq) and 65.4% yoy (33% qoq) growth, respectively, led by strong
operating performance. At `209, the stock is trading at attractive valuations of
9.5x FY2013E earnings. We maintain our Buy rating on the stock; however, our
target price is under review.
BGR Energy Systems
BGR Energy Systems (BGR) reported a stable performance for 2QFY2012, as
expected (after witnessing exponential growth in the past few quarters, mainly
FY2011). However, numbers were well below our and street estimates. The top line
declined by 32.1% yoy to (`771cr), which was 24.6% lower than our expectation of
`1,023cr. The downside was majorly from the construction and EPC segment,
which declined by 37.1% yoy to `679.1cr. In contrast, the capital good segment
posted impressive 68.4% yoy growth to `91.5cr (`54.7cr). Capital goods also
contributed to increased proportion – ~12.0% of the total revenue compared to
4.8% in 2QFY2011.
On the EBITDA front, margin posted a positive surprise – EBITDAM expanded by
263bp yoy to 14.3% (est. 11.8%) mainly due to lower raw-material costs, which
contracted by 630bp yoy to 75.5% as a percentage of revenue. Upside in margin
was mainly offered by the capital goods segment, which expanded admirably by
1,250bp yoy to ~20.0%. The construction and EPC segment was also positively
aided by 140bp on the back of expected higher execution of BoP projects.
Interest cost more than doubled on a yoy basis to `30.1cr, which offsetted most
gains on the operating front. Driven by lower revenue and high interest, PAT
declined by 34.0% yoy to `51.4cr, ~25.5% below our and street estimate of
`66.8cr. We would like to hear management’s commentary on future outlook and
get more details over the quarterly numbers, post which we will revise our
estimates and recommendation. Currently, the stock in under review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Cements
For 2QFY2012, India Cements registered 29.5% yoy growth in its top line to
`1,092cr, mainly on account of a substantial 44.9% yoy increase in cement
realization to `4,223/tonne. However, the company’s dispatches fell by 10.4% yoy
to 2.43mn tones, as cement demand continued to slide down in south India, which
is the company’s major market. The southern region posted a 4.1% yoy decline in
demand during the quarter. OPM rose by 1,972bp yoy to 23.3% due to better
cement realization despite increased raw material, power and fuel, and freight
costs. Power and fuel cost per tonne increased by 18% yoy during the quarter on
account on higher coal imports (due to strike in Singareni coal fields) and INR
depreciation. Further, interest cost rose substantially by 220.2% yoy to `89cr
(including `24cr forex translation loss) on account of replacement of US$75mn
FCCBs (along with premium of `178cr) with domestic debt and higher utilization of
working capital limits. The bottom line stood at `70cr (loss of `34cr in 2QFY2011),
which was better than our expectation of `31cr. We maintain our Neutral view on
the stock.
Amara Raja Batteries
Amara Raja Batteries (AMRJ) posted impressive 42.8% yoy (6.7% qoq) growth in its
top line to `560cr. Top-line growth was led by growth in the industrial battery
segment and stable performance by the automotive battery segment. During
2QFY2012, the company’s operating margin witnessed a 157bp yoy (strong
282bp qoq) expansion to 15.7%, led by 351bp and 133bp yoy contraction in
other expenditure and staff costs as a percentage of sales, respectively. Rawmaterial
cost as a percentage of sales, however, increased by 320bp yoy mainly
due to increased lead prices. Operating and net profit registered substantial 58.6%
yoy (30% qoq) and 65.4% yoy (33% qoq) growth, respectively, led by strong
operating performance. At `209, the stock is trading at attractive valuations of
9.5x FY2013E earnings. We maintain our Buy rating on the stock; however, our
target price is under review.
BGR Energy Systems
BGR Energy Systems (BGR) reported a stable performance for 2QFY2012, as
expected (after witnessing exponential growth in the past few quarters, mainly
FY2011). However, numbers were well below our and street estimates. The top line
declined by 32.1% yoy to (`771cr), which was 24.6% lower than our expectation of
`1,023cr. The downside was majorly from the construction and EPC segment,
which declined by 37.1% yoy to `679.1cr. In contrast, the capital good segment
posted impressive 68.4% yoy growth to `91.5cr (`54.7cr). Capital goods also
contributed to increased proportion – ~12.0% of the total revenue compared to
4.8% in 2QFY2011.
On the EBITDA front, margin posted a positive surprise – EBITDAM expanded by
263bp yoy to 14.3% (est. 11.8%) mainly due to lower raw-material costs, which
contracted by 630bp yoy to 75.5% as a percentage of revenue. Upside in margin
was mainly offered by the capital goods segment, which expanded admirably by
1,250bp yoy to ~20.0%. The construction and EPC segment was also positively
aided by 140bp on the back of expected higher execution of BoP projects.
Interest cost more than doubled on a yoy basis to `30.1cr, which offsetted most
gains on the operating front. Driven by lower revenue and high interest, PAT
declined by 34.0% yoy to `51.4cr, ~25.5% below our and street estimate of
`66.8cr. We would like to hear management’s commentary on future outlook and
get more details over the quarterly numbers, post which we will revise our
estimates and recommendation. Currently, the stock in under review.
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