Motilal Oswal - Ambuja Cements Limited (AMBUJACEM) MOSL: AMBUJA CEMENT (Neutral)-Cracks seen in the form of higher cost/t, lower realization

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Motilal Oswal

EUR 120.00 For Business Accounts Only

MOSL: AMBUJA CEMENT (Neutral)-Cracks seen in the form of higher cost/t, lower realization

Ambuja cement: Cracks seen in the form of higher cost/t, lower realization

(ACEM IN, Mkt Cap USD5.5b, CMP INR198, TP INR194, 2% Downside, Neutral)

Volumes, realizations below estimate: Volumes grew 4.4% YoY to 6.13mt (our estimate: 6.22mt) in 4QCY18. Realizations declined 2.4% QoQ to INR4,671/t (our estimate: INR4,818), led by weaker prices in core markets. Revenue increased 7% YoY to INR28.63b (our estimate: INR29.9b).
Margins shrink due to cost push: Cost/t increased 8% YoY (-3% QoQ) to INR4,012 (our estimate: INR3,918), led by higher raw material cost/t and power & fuel cost/t. EBITDA/t of INR659, thus, came in lower than our estimate of INR901. EBITDA declined 20% YoY but increased 13% QoQ to INR4.04b (our estimate: INR5.6b), translating into a margin of 14.1% (-4.8pp YoY, +0.4pp QoQ). Exceptional items amounting to INR2.4b were booked in the quarter. Hence, adj. PAT stood at INR2.95b (-3% YoY) versus our estimate of INR3.2b, while reported PAT stood at INR5.37b.
Key highlights from management presentation: (1) Power & fuel cost increased due to high-cost inventory. (2) ACEM commissioned the Gare Palma coal block, which should help optimize fuel mix. (3) Mr Bimlendra Jha appointed as MD & CEO with effect from 1st March 2019.
CY18 performance: Volumes grew 5% YoY, resulting in sales/EBITDA/PAT growth of 9%/1%/2% YoY in CY18.

19/02/2019 10 EN

Underlying

Ambuja Cements Limited

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.

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INE079A01024 National Stock Exchange of India India

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: AMBUJA CEMENT (Neutral)-Cracks seen in the form of higher cost/t, lower realization

Ambuja Cements Limited: 1 director

AMBUJA CEMENTS sees a downgrade to Slightly Negative on account of less fundamental stars

Monthly LMI Update Independent Investment Research

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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