Q1CY19 result highlights
Impact on financials: 3%/2% cut on both standalone and consolidated EPS
Valuations & view:
The quarter earnings were disappointing with weak volume growth and muted realisations. While realisations will likely improve in near term on recent hikes and improving demand-supply dynamics (mgmt. expects 7-8% industry growth in CY19), volume growth is likely to improve once the 3.1mtpa Marwa-Mundwa project is operational by 2HCY20. Accordingly, earnings are likely to grow at 26% CAGR over CY18-20E. We believe consolidated valuations are attractive at 9.5x CY19E EV/EBITDA and US$114 on EV/t. Maintain Outperformer.
Ambuja Cement is a holding company. Co. is engaged in the manufacture and bulk export of cement and clinker products. Through its subsidiaries, Co. is engaged in investment holding in cement industries; finance services; the manufacture of cement; and property development and construction projects.
IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.
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