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UltraTech Cement
B e t t e r r e a l i s a t i o n s , l o w e r c o s t d r i v e p r o f i t …
UltraTech came out with better-than expected Q1FY12 results. The
company reported net sales of | 4,365.4 crore (down ~3% QoQ), which
was higher than our estimate of | 4096.6 crore and net profit of ~| 683.1
crore (down 6% QoQ), ahead of our estimate of | 393.2 crore. Better than
expected earnings was due to higher-than-expected growth in realisation
and lower than expected input costs. The operating cost remained flat
QoQ, which resulted in better-than-expected growth of ~30% QoQ in
blended EBITDA/tonne to | 1134. The EBITDA margin has increased by
448 bps QoQ to 27.2%. However, higher tax outgo (up 193% QoQ) and
lower other income (down 40% QoQ) took a toll on the bottomline.
ƒ Lower demand during quarter hits topline
Blended sales volumes (cement and clinker) decreased by 7% QoQ
to 9.6 million tonnes (MT) while blended realisations improved
~8.3% QoQ to | 4165 per tonne. Volumes were lower during the
quarter on account of a lower rise in demand due to sluggishness in
construction activities.
ƒ EBITDA/tonne improves ~30% QoQ to | 1134 per tonne
The EBITDA per tonne increased ~30% QoQ to | 1134 per tonne as
the net realisation improved ~8% QoQ. The total cost per tonne
remained flat QoQ at | 3032 per tonne as the increase in power and
fuel cost was negated by the decline in raw material cost.
V a l u a t i o n
At the CMP of | 1027, the stock is trading at 14.4x and 13.7x its FY12E and
FY13E earnings, respectively. It is trading at an EV/EBITDA of 8.1x and
7.5x its FY12E and FY13E EBITDA, respectively. On an EV/tonne basis, the
stock is trading at $132 and $136 its FY12E and FY13E capacities,
respectively. We have valued the stock at $140 per tonne at its FY13E
capacity of 51.7 MTPA. We maintain our HOLD rating on the stock with a
revised target price of | 1081 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UltraTech Cement
B e t t e r r e a l i s a t i o n s , l o w e r c o s t d r i v e p r o f i t …
UltraTech came out with better-than expected Q1FY12 results. The
company reported net sales of | 4,365.4 crore (down ~3% QoQ), which
was higher than our estimate of | 4096.6 crore and net profit of ~| 683.1
crore (down 6% QoQ), ahead of our estimate of | 393.2 crore. Better than
expected earnings was due to higher-than-expected growth in realisation
and lower than expected input costs. The operating cost remained flat
QoQ, which resulted in better-than-expected growth of ~30% QoQ in
blended EBITDA/tonne to | 1134. The EBITDA margin has increased by
448 bps QoQ to 27.2%. However, higher tax outgo (up 193% QoQ) and
lower other income (down 40% QoQ) took a toll on the bottomline.
ƒ Lower demand during quarter hits topline
Blended sales volumes (cement and clinker) decreased by 7% QoQ
to 9.6 million tonnes (MT) while blended realisations improved
~8.3% QoQ to | 4165 per tonne. Volumes were lower during the
quarter on account of a lower rise in demand due to sluggishness in
construction activities.
ƒ EBITDA/tonne improves ~30% QoQ to | 1134 per tonne
The EBITDA per tonne increased ~30% QoQ to | 1134 per tonne as
the net realisation improved ~8% QoQ. The total cost per tonne
remained flat QoQ at | 3032 per tonne as the increase in power and
fuel cost was negated by the decline in raw material cost.
V a l u a t i o n
At the CMP of | 1027, the stock is trading at 14.4x and 13.7x its FY12E and
FY13E earnings, respectively. It is trading at an EV/EBITDA of 8.1x and
7.5x its FY12E and FY13E EBITDA, respectively. On an EV/tonne basis, the
stock is trading at $132 and $136 its FY12E and FY13E capacities,
respectively. We have valued the stock at $140 per tonne at its FY13E
capacity of 51.7 MTPA. We maintain our HOLD rating on the stock with a
revised target price of | 1081 per share.
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