MOSL: BIRLA CORPORATION (Buy)-Beat led by lower-than-estimated costs
BIRLA CORPORATION: Beat led by lower-than-estimated costs
(BCORP IN, Mkt Cap USD0.7b, CMP INR625, TP INR815, 30% Upside, Buy)
- Margin improvement driven by realizations: volumes increased 4% YoY to 3.2mt (our estimate: 3.13mt). Cement realizations were up 6% YoY to INR4,810/t (in-line). Net sales grew 11% YoY to INR16.3b (our estimate: INR15.8b). Total cost/t was down 1% YoY to INR4,109 versus our estimate of INR4,204. Thus, EBITDA/t increased 61% YoY to INR975. Accordingly, EBITDA grew 68% YoY to INR3.1b (our estimate: INR2.6b). PAT grew 5x YoY to INR883m (our estimate: INR614m).
- 1HFY20 performance: Sales/EBITDA/PAT increased 13%/ 61%/2.3x YoY. Operating cash flows post working capital and taxes declined 5% YoY to INR4.1b, led by an increase in working capital due to higher receivables (+2 days) and lower payables (-3 days). We expect sales/EBITDA/PAT to increase by 6%/34%/41% YoY in 2HFY20.
- Key highlights: (1) Premium cement accounted for 41 % of sales through the trade channel, as against 37% in the same period last year. (2) The share of blended cement in total sales scaled up to 93% from 87% in the quarter. (3) BCORP is engaging with a global consultancy to streamline systems and processes for both inbound and outbound logistics.
Birla is engaged in the manufacture and sale of cement in India. Co.'s Cement division offers various cements, such as ordinary portland cement, 43 and 53 grades, portland pozzolana cement, fly ash – based PPC, low alkali portland cement, portland slag cement, low heat cement, and sulphate resistant cement. Its Jute division provides a range of products, including jute yarn, floor and wall covering, lino hessian, decorative fabrics, nursery cloth, scrim, jute carpets, non-woven jute felt, hydrocarbon-free bags/cloth, D.W. canvas, carpet backing cloth, hessian cloth/bags, and sacking bags/cloth.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.