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H i g h e r c o s t s e r o d e m a r g i n s …
ACC reported net sales of | 2150 crore (up 31% YoY, down ~10% QoQ),
in line with our estimate of | 2105 crore. However, the EBITDA margin of
10.3% was below our estimate of 14.1% primarily on account of higher
than expected employee cost and other cost. Net profit of | 168 crore (up
~67% YoY, down ~50% QoQ) came in line with our estimate of | 181
crore supported by higher other income pertaining to write-back of sales
tax. Sales volumes and realisation were muted on a sequential basis due
to sluggish demand and correction in cement prices during the quarter.
The EBITDA/tonne has declined ~58% QoQ to | 387/tonne (our estimate:
| 527/tonne) due to a decline in realisation and spurt in costs.
ƒ Cement volume up ~18% YoY on stabilisation of new capacities
Sales volumes increased ~18% YoY (declined ~4% QoQ) to 5.7
MTPA in Q3CY11 on account of stabilisation of new capacities
added by the company at Chanda, Maharashtra and Wadi,
Karnataka. Realisation improved ~11% YoY to | 4052/tonne but
declined ~7% QoQ due to a correction in cement prices during the
quarter on account of sluggish demand.
ƒ EBITDA down ~58% QoQ to | 387/tonne on lower realisation
On a YoY basis, the EBITDA/tonne improved ~10% to | 387/tonne
due to higher realisation. However, it was down ~58% on a
sequential basis due to a decline in realisation and increase in costs.
V a l u a t i o n
At the CMP of | 1184, the stock is trading at 21.4x and 18x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
11.7x and 9.4x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $138 and $133 its CY11E and CY12E
capacities, respectively. We have valued the stock at $130/tonne at CY11E
capacity of 30.5 MTPA, which is in line with the current replacement cost.
We are maintaining our target price of | 1105/share with a HOLD rating on
the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
H i g h e r c o s t s e r o d e m a r g i n s …
ACC reported net sales of | 2150 crore (up 31% YoY, down ~10% QoQ),
in line with our estimate of | 2105 crore. However, the EBITDA margin of
10.3% was below our estimate of 14.1% primarily on account of higher
than expected employee cost and other cost. Net profit of | 168 crore (up
~67% YoY, down ~50% QoQ) came in line with our estimate of | 181
crore supported by higher other income pertaining to write-back of sales
tax. Sales volumes and realisation were muted on a sequential basis due
to sluggish demand and correction in cement prices during the quarter.
The EBITDA/tonne has declined ~58% QoQ to | 387/tonne (our estimate:
| 527/tonne) due to a decline in realisation and spurt in costs.
ƒ Cement volume up ~18% YoY on stabilisation of new capacities
Sales volumes increased ~18% YoY (declined ~4% QoQ) to 5.7
MTPA in Q3CY11 on account of stabilisation of new capacities
added by the company at Chanda, Maharashtra and Wadi,
Karnataka. Realisation improved ~11% YoY to | 4052/tonne but
declined ~7% QoQ due to a correction in cement prices during the
quarter on account of sluggish demand.
ƒ EBITDA down ~58% QoQ to | 387/tonne on lower realisation
On a YoY basis, the EBITDA/tonne improved ~10% to | 387/tonne
due to higher realisation. However, it was down ~58% on a
sequential basis due to a decline in realisation and increase in costs.
V a l u a t i o n
At the CMP of | 1184, the stock is trading at 21.4x and 18x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
11.7x and 9.4x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $138 and $133 its CY11E and CY12E
capacities, respectively. We have valued the stock at $130/tonne at CY11E
capacity of 30.5 MTPA, which is in line with the current replacement cost.
We are maintaining our target price of | 1105/share with a HOLD rating on
the stock.
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