Madras Cement - Results above estimates- Maintain ACCUMULATE:: Emkay

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Madras Cement

Results above estimates- Maintain ACCUMULATE

ACCUMULATE

CMP: Rs84                                        Target Price: Rs100

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n     APAT at Rs0.98 bn – above est due to higher cement realizations. Southern markets held on to elevated cement price levels-avg realizations at Rs4203/t (vs est of Rs3936/t)

n     Higher prices drive EBITDA/t to Rs1219, EBITDA + 27% yoy to Rs2.54 bn – above est. No major impact of domestic coal price hike (only 26% of coal requirement sourced locally)

n     Though cement prices remained firm in Q1 in south, expect sluggish cement demand in southern to exert pressure on prices. However our earnings already factor in such pressure

n     Valuation at PER of 8.5X & EV/ton of USD80 on FY12E remain reasonable- Maintain ACCUMULTE with Target price Rs100