Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
For 2QFY2012, Madras Cements (MAC) posted a robust performance, with net
profit surging by 256.3% yoy to `111cr, which was in-line with our estimates.
Strong bottom-line performance was on account of whopping 47.3% yoy growth
in realization on a low base. (Realization of MAC, a predominantly south-based
player had earlier suffered due to collapse in cement prices in south during
2QFY2011). However, dispatches fell by 9.3% yoy to 1.77mn tonnes due to
continuing poor demand situation in the south. We remain Neutral on the stock.
OPM at robust 33.4%, driven by 47.3% yoy improvement in realization: MAC
registered 27.6% yoy top-line growth to `819cr, driven by 33.7% yoy growth in
the cement division’s revenue. However, revenue of the windmill division fell by
25.3% yoy due to lower operational capacity (MAC had sold 26.4MW during
September 2010 and, thus, had higher operational capacity during the first two
months of 2HFY2011). Firm production discipline in the south during 2QFY2012
led to the phenomenal 47.3% yoy growth in cement realization. In fact, MAC’s
realization was higher by 3.4% even on a qoq basis (vs. the qoq decline in
realization reported by pan-India players such as ACC and UltraTech Cements),
as cement prices declined sequentially in other regions during the quarter. A steep
improvement in realization resulted in a 1,550bp yoy increase in OPM to 33.4%
despite hike in raw-material, power and fuel and freight costs.
Outlook and valuation: Going ahead, cement prices in the southern region are
expected to correct from current levels due to commissioning of new capacities.
We expect MAC to post a 15.4% and 29.7% CAGR in its top line and bottom line
over FY2011-13E. At the CMP, the stock is trading at EV/EBITDA of 5.3x and
EV/tonne of US$85 on FY2013 estimates. We remain Neutral on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
For 2QFY2012, Madras Cements (MAC) posted a robust performance, with net
profit surging by 256.3% yoy to `111cr, which was in-line with our estimates.
Strong bottom-line performance was on account of whopping 47.3% yoy growth
in realization on a low base. (Realization of MAC, a predominantly south-based
player had earlier suffered due to collapse in cement prices in south during
2QFY2011). However, dispatches fell by 9.3% yoy to 1.77mn tonnes due to
continuing poor demand situation in the south. We remain Neutral on the stock.
OPM at robust 33.4%, driven by 47.3% yoy improvement in realization: MAC
registered 27.6% yoy top-line growth to `819cr, driven by 33.7% yoy growth in
the cement division’s revenue. However, revenue of the windmill division fell by
25.3% yoy due to lower operational capacity (MAC had sold 26.4MW during
September 2010 and, thus, had higher operational capacity during the first two
months of 2HFY2011). Firm production discipline in the south during 2QFY2012
led to the phenomenal 47.3% yoy growth in cement realization. In fact, MAC’s
realization was higher by 3.4% even on a qoq basis (vs. the qoq decline in
realization reported by pan-India players such as ACC and UltraTech Cements),
as cement prices declined sequentially in other regions during the quarter. A steep
improvement in realization resulted in a 1,550bp yoy increase in OPM to 33.4%
despite hike in raw-material, power and fuel and freight costs.
Outlook and valuation: Going ahead, cement prices in the southern region are
expected to correct from current levels due to commissioning of new capacities.
We expect MAC to post a 15.4% and 29.7% CAGR in its top line and bottom line
over FY2011-13E. At the CMP, the stock is trading at EV/EBITDA of 5.3x and
EV/tonne of US$85 on FY2013 estimates. We remain Neutral on the stock.
No comments:
Post a Comment