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http://content.icicidirect.com/mailimages/ICICIdirect_AmbujaCement_Q4CY11.pdf
M a r g i n i m p r o v e s o n h i g h e r p r i c e s …
Ambuja Cement reported net sales of | 2329 crore (up 30% YoY, ~29%
QoQ), in line with our estimate of | 2354 crore. However, the EBITDA
margin of 18.1% and PAT of | 302.4 were below our respective estimates
of 22.9% and | 344 crore on account of higher than expected input costs.
Total cost increased ~24% YoY (~12% QoQ) to | 3621/tonne (our
estimate: | 3277/tonne). However, realisations improved to | 4420/tonne
(~15% QoQ), which helped the EBITDA to grow ~29% QoQ to
| 799/tonne (our estimate: | 972/tonne). Cement volumes increased
during the quarter on demand pick-up post monsoon. We expect volume
growth of ~6% CAGR over CY11-13E to 23.6 million tonnes (MT) in
CY13E from 20.9 MT in CY11. We assume realisation growth of ~5% YoY
each in CY12E and CY13E. We estimate EBITDA/tonne of | 990 in CY12E
and | 1055 in CY13E against | 912/tonne in CY11.
ƒ Cement volume up ~5% YoY, realisation up ~24% YoY
Sales volumes increased ~5% YoY (~12% QoQ) to 5.3 MTPA in
Q4CY11 on account of a pick-up in demand during the quarter from
the construction activities post monsoon. Realisation improved
~24% YoY (~15% QoQ) to | 4420/tonne as cement prices were
hiked during the quarter on account of better demand.
ƒ EBITDA/tonne up ~28% YoY (~29% QoQ) on higher realisation
EBITDA/tonne increased ~28% YoY (~29% QoQ) to | 799/tonne as
the rise in realisation negated the impact of an increase in input
costs. Total cost increased ~24% YoY (~12% QoQ) to | 3621/tonne.
V a l u a t i o n
At the CMP of | 178, the stock is trading at 20.0x and 17.6x its CY12E and
CY13E earnings, respectively. The stock is trading at an EV/EBITDA of
10.6x and 8.9x CY12E and CY13E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $177 and $168 its CY12E and CY13E
capacities, respectively. We are assigning a HOLD rating to the stock with
a revised target price of | 162/share on the basis of valuation of
$150/tonne at CY13E capacity of 27.4 MTPA.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_AmbujaCement_Q4CY11.pdf
M a r g i n i m p r o v e s o n h i g h e r p r i c e s …
Ambuja Cement reported net sales of | 2329 crore (up 30% YoY, ~29%
QoQ), in line with our estimate of | 2354 crore. However, the EBITDA
margin of 18.1% and PAT of | 302.4 were below our respective estimates
of 22.9% and | 344 crore on account of higher than expected input costs.
Total cost increased ~24% YoY (~12% QoQ) to | 3621/tonne (our
estimate: | 3277/tonne). However, realisations improved to | 4420/tonne
(~15% QoQ), which helped the EBITDA to grow ~29% QoQ to
| 799/tonne (our estimate: | 972/tonne). Cement volumes increased
during the quarter on demand pick-up post monsoon. We expect volume
growth of ~6% CAGR over CY11-13E to 23.6 million tonnes (MT) in
CY13E from 20.9 MT in CY11. We assume realisation growth of ~5% YoY
each in CY12E and CY13E. We estimate EBITDA/tonne of | 990 in CY12E
and | 1055 in CY13E against | 912/tonne in CY11.
ƒ Cement volume up ~5% YoY, realisation up ~24% YoY
Sales volumes increased ~5% YoY (~12% QoQ) to 5.3 MTPA in
Q4CY11 on account of a pick-up in demand during the quarter from
the construction activities post monsoon. Realisation improved
~24% YoY (~15% QoQ) to | 4420/tonne as cement prices were
hiked during the quarter on account of better demand.
ƒ EBITDA/tonne up ~28% YoY (~29% QoQ) on higher realisation
EBITDA/tonne increased ~28% YoY (~29% QoQ) to | 799/tonne as
the rise in realisation negated the impact of an increase in input
costs. Total cost increased ~24% YoY (~12% QoQ) to | 3621/tonne.
V a l u a t i o n
At the CMP of | 178, the stock is trading at 20.0x and 17.6x its CY12E and
CY13E earnings, respectively. The stock is trading at an EV/EBITDA of
10.6x and 8.9x CY12E and CY13E EBITDA, respectively. On an EV/tonne
basis, the stock is trading at $177 and $168 its CY12E and CY13E
capacities, respectively. We are assigning a HOLD rating to the stock with
a revised target price of | 162/share on the basis of valuation of
$150/tonne at CY13E capacity of 27.4 MTPA.
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