Motilal Oswal - Prism Johnson (PRSMJOHNSN) MOSL: PRISM CEMENT (Buy)-Cement drives strong profitability improvement

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Motilal Oswal

MOSL: PRISM CEMENT (Buy)-Cement drives strong profitability improvement

â€‹Prism Cement: Cement drives strong profitability improvement

(PRSC IN, Mkt Cap USD0.9b, CMP INR119, TP INR138, 16% Upside, Buy)

Strong volume growth: Standalone 4QFY17 revenue rose 2% YoY (+25% QoQ) to INR14.2b (est. of INR16.1b), as Cement sales grew strongly led by volume growth of 15% YoY and realization improvement. TBK sales (-10% YoY) continued to decline. Cement realizations grew ~7% QoQ (~+11% YoY) to INR4,509 (est. of INR4,445) on better pricing in the focus markets.
TBK losses reduce marginally: TBK segment's revenue fell 10% YoY (+21% QoQ) to INR5.27b (est. of INR5.1b) due to a market share loss. The segment's PBIT loss at INR260m was marginally lower on a QoQ basis.
Cement pricing improvement drives margin uptick: Overall EBITDA rose 58% YoY (+363% QoQ) to INR1.16b, with the margin at 8% (+6pp QoQ; +3pp YoY). Total expenditure fell due to logistics cost initiatives to reduce freight costs. Cement EBITDA/ton stood at INR801 (+65% YoY, +104% QoQ). PAT declined 7% YoY to INR702m due to lower other income.

26/05/2017 8 EN

Underlying

Prism Johnson

Prism Johnson Limited, formerly Prism Cement Limited, is a building materials company. The Company has interest in Portland cement, tiles, bathroom and kitchen (TBK) and ready mixed concrete (RMC). The Company's segments include Cement, TBK, RMC and Insurance. The Company has three divisions: Prism Cement, H&R Johnson (India) (HRJ) and RMC Readymix (India). Prism Cement is a cement manufacturer with units at Satna, Madhya Pradesh with a nameplate capacity of approximately 5.6 million tons per annum (MTPA) of cement. It manufactures Portland Pozzolana Cement (PPC) under the brand name Champion, Champion Plus, Hi-Tech and DuraTech. HRJ operates in TBK segment and offers end-to-end solutions of tiles, sanitary ware, bath fittings, kitchens and engineered marble and quartz. RMC Readymix (India) is ready mixed concrete manufacturer. It offers various concretes, including Enviroprotectcrete, FRCcrete, Thermocrete, Dyecrete and Perviouscrete.

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INE010A01011 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: PRISM CEMENT (Buy)-Cement drives strong profitability improvement

MOSL: PRISM JOHNSON (Buy)-Significant miss led by higher costs

MOSL: PRISM JOHNSON (Buy)-Healthy margins in cement-TBK and RMC suffer

MOSL: PRISM JOHNSON (Buy)-Cement division drives profitability

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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