Strong performance driven by price hikes, volumes remain subdued
GGCL’s net profit of Rs995mn was higher than our estimate of RS737mn mainly on account of higher realizations during the quarter. The company had taken a price hike of 9.6% in the key industrial segment w.e.f. 1st July 2012. However, volumes for the quarter were subdued at 295mmscm (yoy -9.5% qoq +2.1%). Gas cost for the quarter remained constant on a sequential basis at Rs22/scm (yoy +46.7%) as LNG prices softened during the quarter. Consequently gross margin increased by 33.7% sequentially to Rs6.1/scm (yoy +29.5%). GGCL reported its highest ever EBITDA/scm of Rs4.4 (yoy +33.8% qoq +66.4%).
We maintain our SELL rating on the stock with a target price of Rs289. At the CMP, the stock is trading at 14.2x and 9.5x CY13e EPS and EBITDA respectively.
Actual v/s Estimates
Y/E, Dec (Rs. m)
|
Q3CY12
|
Q2CY12
|
qoq (%)
|
Q3CY11
|
yoy (%)
|
LKP Estimates
|
Deviation (%/bps)
|
Revenue
|
8,302
|
7,659
|
8.4%
|
6,435
|
29.0%
|
8,613
|
-3.6%
|
EBITDA
|
1,309
|
771
|
69.8%
|
1,081
|
21.1%
|
1,078
|
21.4%
|
EBITDA (%)
|
15.8%
|
10.1%
|
570 bps
|
16.8%
|
-103 bps
|
12.5%
|
325 bps
|
PAT
|
995
|
521
|
91.1%
|
805
|
23.6%
|
737
|
35.0%
|
LKP Research
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