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L o w e r r e a l i s a t i o n , h i g h c o s t s h u r t m a r g i n …
Ambuja reported net sales of | 1805 crore (up 15% YoY, down ~17%
QoQ), in line with our estimate of | 1813 crore. However, the EBITDA
margin of 16.1% and net profit of | 171 crore (up ~13% YoY, down
~51% QoQ) were below our respective estimates of 18.5% and | 201
crore, primarily on account of higher-than-expected input costs. Sales
volumes and realisations declined on a sequential basis due to sluggish
demand and correction in cement prices during the quarter. The
EBITDA/tonne has declined ~44% QoQ to | 620/tonne (our estimate: |
703/tonne) due to a decline in realisation and spurt in costs. We expect
volume growth at ~5% CAGR over CY10-12E. Realisations are expected
to increase ~8% YoY in CY11E and ~7% in CY12E. However, an increase
in coal cost and freight cost would keep margins under pressure. We
estimate EBITDA/tonne of | 928 in CY11E and | 999 in CY12E.
ƒ Cement volume up ~8% YoY, down ~11% QoQ
Sales volumes increased ~8% YoY to 4.7 MTPA in Q3CY11 while
they declined ~11% on a sequential basis on account of muted
demand during the quarter. Realisation improved ~7% YoY to |
3849/tonne but declined ~6% QoQ due to a correction in cement
prices during the quarter on account of sluggish demand.
ƒ EBITDA down ~44% QoQ to | 620/tonne on lower realisation
EBITDA/tonne declined ~5% YoY to | 620/tonne as the rise in costs
negated the impact of an increase in realisation. QoQ it was down
~44% due to a decline in realisation and increase in costs.
V a l u a t i o n
At the CMP of | 155, the stock is trading at 19.5x and 16.8x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
10.6x and 8.8x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $167 and $157 its CY11E and CY12E
capacities, respectively. We are assigning a HOLD rating to the stock with
a revised target price of | 144/share on the basis of valuation of
$140/tonne at CY12E capacity of 27 MTPA
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L o w e r r e a l i s a t i o n , h i g h c o s t s h u r t m a r g i n …
Ambuja reported net sales of | 1805 crore (up 15% YoY, down ~17%
QoQ), in line with our estimate of | 1813 crore. However, the EBITDA
margin of 16.1% and net profit of | 171 crore (up ~13% YoY, down
~51% QoQ) were below our respective estimates of 18.5% and | 201
crore, primarily on account of higher-than-expected input costs. Sales
volumes and realisations declined on a sequential basis due to sluggish
demand and correction in cement prices during the quarter. The
EBITDA/tonne has declined ~44% QoQ to | 620/tonne (our estimate: |
703/tonne) due to a decline in realisation and spurt in costs. We expect
volume growth at ~5% CAGR over CY10-12E. Realisations are expected
to increase ~8% YoY in CY11E and ~7% in CY12E. However, an increase
in coal cost and freight cost would keep margins under pressure. We
estimate EBITDA/tonne of | 928 in CY11E and | 999 in CY12E.
ƒ Cement volume up ~8% YoY, down ~11% QoQ
Sales volumes increased ~8% YoY to 4.7 MTPA in Q3CY11 while
they declined ~11% on a sequential basis on account of muted
demand during the quarter. Realisation improved ~7% YoY to |
3849/tonne but declined ~6% QoQ due to a correction in cement
prices during the quarter on account of sluggish demand.
ƒ EBITDA down ~44% QoQ to | 620/tonne on lower realisation
EBITDA/tonne declined ~5% YoY to | 620/tonne as the rise in costs
negated the impact of an increase in realisation. QoQ it was down
~44% due to a decline in realisation and increase in costs.
V a l u a t i o n
At the CMP of | 155, the stock is trading at 19.5x and 16.8x its CY11E and
CY12E earnings, respectively. The stock is trading at an EV/EBITDA of
10.6x and 8.8x CY11E and CY12E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $167 and $157 its CY11E and CY12E
capacities, respectively. We are assigning a HOLD rating to the stock with
a revised target price of | 144/share on the basis of valuation of
$140/tonne at CY12E capacity of 27 MTPA
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