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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 Lakshmi Cement reported net sales of | 439 crore and net profit of
| 49 crore in Q3FY12, which were above our respective estimates of | 416
crore and | 28 crore due to higher-than-expected cement realisation at |
3588/tonne vs. our estimate of | 3498/tonne. Realisation improved
significantly ~23% YoY (~14% QoQ), which helped in a sharp
improvement in operating margin by 1331 bps YoY (954 bps QoQ) to
21.2%. Cement volumes increased during the quarter on a rise in demand
post monsoon. The EBITDA/tonne rose to | 759/tonne in Q3FY12, which
was ahead of our estimate of | 625/tonne. Going forward, we expect
volume growth at ~9% CAGR over FY11-13E to 5.1 MT in FY13E from 4.3
MT in FY11 due to an improvement in utilisation rates. We estimate
EBITDA/tonne of | 630 in FY12E and | 634 in FY13E.
ƒ Net realisation up ~26% YoY, cement volume up ~10% YoY
Blended cement sales volumes increased ~13% YoY (~9% QoQ) to
1.22 million tonnes (MT) as cement demand picked up during the
quarter post monsoons on increased offtake from construction
activities. The cement realisation increased ~23% YoY (~14% QoQ)
to | 3588/tonne due to a rise in cement prices during the quarter
after the significant increase in dispatches.
ƒ EBITDA/tonne increases sharply to | 759/tonne
The EBITDA/tonne has improved significantly to | 759/tonne on a
rise in realisation, which negated the impact of increased total cost,
which increased ~5% YoY (~2% QoQ) to | 2829/tonne.
V a l u a t i o n
At the CMP of | 65, the stock is trading at 6.4x and 5.5x its FY12E and
FY13E earnings, respectively. The stock is trading at an EV/EBITDA of 4.4x
and 5.3x FY12E and FY13E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $51 and $67 its FY12E and FY13E capacities of 5.4
MT. We have valued the FY13E capacity of 5.4 MT at $70/tonne. We
maintain our BUY rating with a revised target price of | 74/share
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
PDF link for report- click here
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 Lakshmi Cement reported net sales of | 439 crore and net profit of
| 49 crore in Q3FY12, which were above our respective estimates of | 416
crore and | 28 crore due to higher-than-expected cement realisation at |
3588/tonne vs. our estimate of | 3498/tonne. Realisation improved
significantly ~23% YoY (~14% QoQ), which helped in a sharp
improvement in operating margin by 1331 bps YoY (954 bps QoQ) to
21.2%. Cement volumes increased during the quarter on a rise in demand
post monsoon. The EBITDA/tonne rose to | 759/tonne in Q3FY12, which
was ahead of our estimate of | 625/tonne. Going forward, we expect
volume growth at ~9% CAGR over FY11-13E to 5.1 MT in FY13E from 4.3
MT in FY11 due to an improvement in utilisation rates. We estimate
EBITDA/tonne of | 630 in FY12E and | 634 in FY13E.
ƒ Net realisation up ~26% YoY, cement volume up ~10% YoY
Blended cement sales volumes increased ~13% YoY (~9% QoQ) to
1.22 million tonnes (MT) as cement demand picked up during the
quarter post monsoons on increased offtake from construction
activities. The cement realisation increased ~23% YoY (~14% QoQ)
to | 3588/tonne due to a rise in cement prices during the quarter
after the significant increase in dispatches.
ƒ EBITDA/tonne increases sharply to | 759/tonne
The EBITDA/tonne has improved significantly to | 759/tonne on a
rise in realisation, which negated the impact of increased total cost,
which increased ~5% YoY (~2% QoQ) to | 2829/tonne.
V a l u a t i o n
At the CMP of | 65, the stock is trading at 6.4x and 5.5x its FY12E and
FY13E earnings, respectively. The stock is trading at an EV/EBITDA of 4.4x
and 5.3x FY12E and FY13E EBITDA, respectively. On an EV/tonne basis,
the stock is trading at $51 and $67 its FY12E and FY13E capacities of 5.4
MT. We have valued the FY13E capacity of 5.4 MT at $70/tonne. We
maintain our BUY rating with a revised target price of | 74/share
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