MOSL: INDIA CEMENTS (Neutral)-EBITDA beat led by lower other expenses
​India Cements: EBITDA beat led by lower other expenses
(ICEM IN, Mkt Cap USD0.8b, CMP INR174, TP INR188, 8% Upside, Neutral)
- Realizations decline due to weak pricing: ICEM posted volume of 2.7mt (-2% YoY, +2% QoQ) due to lower volume in south on account of demand weakness in Tamil Nadu. Blended realizations fell 3% QoQ to INR4,696/t due to weak prices in south. Cement realization declined 5% QoQ on a fall in the underlying markets of TN and AP/Telangana. Revenue fell 2% QoQ to INR12.68b (YoY financials are not comparable as 2QFY17 does not include Trinetra merger).
- Margins flat QoQ: EBITDA fell 2% QoQ to INR1.85b. Margin of 14.3% was flat QoQ. Hence, blended EBITDA/ton declined INR27 QoQ to INR672, as realization decline was offset by lower other expenses. Cement EBITDA/t stood at INR647 (-INR64 QoQ). Debt levels have increased by ~INR2.5b due to higher receivables on account of credit extension in new markets, where ICEM has entered in 1HFY18.
- Key takeaways from conference call: 1) Petcoke is 81% of fuel mix, which was priced at USD92 for 2Q. 2) Other expenses were lower due to the absence of advertising and maintenance costs. 3) South is at utilization of sub-60%. 4) Estimated capex for FY18 is INR1.5b.
India Cements is engaged in the manufacturing and selling of cement. Co. also is engaged in providing power generation from wind farms. Co. owns two brands of cement in India namely: Sankar cement and Coromandel cement. Through its subsidiaries, Co. is engaged in the investment of equity shares; the transportation of coal and other raw materials; and the provision of logistics support in the form of contract and market truck management and scheduling. Co.'s manufactured products include cement, calcium carbide and textiles. As of Mar 31 2003, production and sale of cement were 4,946,000 tonnes and 4,999,000 tonnes, respectively.
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.