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http://content.icicidirect.com/mailimages/ICICIdirect_JKCement_Q3FY12.pdf
H i g h e r r e a l i s a t i o n l e a d s t o s p u r t i n m a r g i n s …
JK Cement’s Q3FY12 net sales of | 615 crore, EBITDA of | 119 crore and
PAT of | 43.5 crore were above our respective estimates of | 579 crore,
| 92 crore and | 24 crore. This was primarily on account of higher than
expected blended realisation, which increased ~14% QoQ to
| 4654/tonne (our estimate: | 4330/tonne). The EBITDA margin of 19.4%
(our estimate: 15.8%) increased 795 bps YoY as higher realisations
negated the increase in costs. On a per tonne basis, EBITDA increased
significantly to | 902/tonne during the quarter against | 427/tonne in
Q3FY11. Blended volumes picked up during the quarter as demand
improved post monsoon. Going forward, we expect volumes to increase
at ~5% CAGR during FY11-13E to 5.96 MT in FY13E. Blended EBITDA is
expected to improve to | 817/tonne in FY12E and | 820/tonne in FY13E
against | 484/tonne in FY11.
ƒ Blended cement volume up ~4% YoY, realisation up ~25% YoY
Blended cement sales volumes (grey and white) increased ~4%
YoY (~6% QoQ) to 1.32 MT on account of a pick-up in construction
activities post monsoons. Blended cement realisation increased
~25% YoY (~14% QoQ) to | 4654/tonne. The blended EBITDA
increased to | 902/tonne in Q3FY12 as against | 427/tonne in
Q3FY11 and | 477/tonne in Q2FY11. The improvement in margin
was primarily on account of a rise in realisations, which negated the
impact of an increase in input costs, which increased ~ 13% YoY (~
4% QoQ), to | 3752/tonne.
V a l u a t i o n
At the CMP of | 137, the stock is trading at 6.6x and 6.1x its FY12E and
FY13E earnings, respectively. The stock is trading at an EV/EBITDA of 4.4x
and 3.8x FY12E and FY13E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $50 at its FY13E capacity. We have valued the
FY13E blended capacity of 7.9 MT at $55/tonne, which is ~60% discount
to the current replacement cost of $135/tonne. We have maintained our
BUY rating with a revised target price of | 161/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_JKCement_Q3FY12.pdf
H i g h e r r e a l i s a t i o n l e a d s t o s p u r t i n m a r g i n s …
JK Cement’s Q3FY12 net sales of | 615 crore, EBITDA of | 119 crore and
PAT of | 43.5 crore were above our respective estimates of | 579 crore,
| 92 crore and | 24 crore. This was primarily on account of higher than
expected blended realisation, which increased ~14% QoQ to
| 4654/tonne (our estimate: | 4330/tonne). The EBITDA margin of 19.4%
(our estimate: 15.8%) increased 795 bps YoY as higher realisations
negated the increase in costs. On a per tonne basis, EBITDA increased
significantly to | 902/tonne during the quarter against | 427/tonne in
Q3FY11. Blended volumes picked up during the quarter as demand
improved post monsoon. Going forward, we expect volumes to increase
at ~5% CAGR during FY11-13E to 5.96 MT in FY13E. Blended EBITDA is
expected to improve to | 817/tonne in FY12E and | 820/tonne in FY13E
against | 484/tonne in FY11.
ƒ Blended cement volume up ~4% YoY, realisation up ~25% YoY
Blended cement sales volumes (grey and white) increased ~4%
YoY (~6% QoQ) to 1.32 MT on account of a pick-up in construction
activities post monsoons. Blended cement realisation increased
~25% YoY (~14% QoQ) to | 4654/tonne. The blended EBITDA
increased to | 902/tonne in Q3FY12 as against | 427/tonne in
Q3FY11 and | 477/tonne in Q2FY11. The improvement in margin
was primarily on account of a rise in realisations, which negated the
impact of an increase in input costs, which increased ~ 13% YoY (~
4% QoQ), to | 3752/tonne.
V a l u a t i o n
At the CMP of | 137, the stock is trading at 6.6x and 6.1x its FY12E and
FY13E earnings, respectively. The stock is trading at an EV/EBITDA of 4.4x
and 3.8x FY12E and FY13E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $50 at its FY13E capacity. We have valued the
FY13E blended capacity of 7.9 MT at $55/tonne, which is ~60% discount
to the current replacement cost of $135/tonne. We have maintained our
BUY rating with a revised target price of | 161/share.
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