Motilal Oswal - Birla (BIRLACORPN) MOSL: BIRLA CORPORATION (Buy)-Strong beat across parameters

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Motilal Oswal

MOSL: BIRLA CORPORATION (Buy)-Strong beat across parameters

Birla Corporation: Strong beat across parameters

(BCORP IN, Mkt Cap USD0.8b, CMP INR692, TP INR1020, 47% Upside, Buy)

Ramp-up of acquired assets drives volumes: volumes rose 4% YoY to 3.41mt (est. of 3.5mt), led by ramp-up of Reliance assets. Realizations rose 4% QoQ to INR4,554/t (est. of INR4,340) due to better pricing in the focus markets (east, central). Thus, net sales grew 15% YoY (+19% QoQ) to INR16.5b (est. of INR15b). It also received VAT incentives from UP government for prior periods.
Cost efficiencies drive sequential profitability improvement: Power & fuel cost for Reliance assets fell 18% QoQ, as (i) BCORP was able to reduce its dependence on grid power for Reliance plants by installing WHRS and (ii) due to higher usage of captive coal from its mines. Profitability of S/A operations increased significantly QoQ, led by lower other expenses (3QFY18 saw high maintenance-related costs). Thus, consol. EBITDA/t stood at INR735 (est. of INR457; +3% YoY; +61% QoQ), leading to EBITDA of INR2.5b (est. of INR1.6b; +7% YoY; +81% QoQ). Adj. PAT stood at INR1.3b (est. of loss of INR38m).
FY18 performance: volumes rose 23% YoY to 12.4mt led by ramp-up of Reliance assets. Realization stood at INR4,548/t, leading to net sales of INR57b (+32% YoY). EBITDA stood at INR8b (+29% YoY), while PAT fell 30% YoY to INR1.5b due to higher depreciation (+30% YoY) and interest cost (+36% YoY).

17/05/2018 8 EN

Underlying

Birla

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.

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INE340A01012 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: BIRLA CORPORATION (Buy)-Strong beat across parameters

MOSL: BIRLA CORPORATION: Higher volume and realization drive EBITDA beat

BIRLA CORPORATION sees its risk increased and a downgrade to Neutral

MOSL: BIRLA CORPORATION (Buy)-Expansion plans provide growth visibility

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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