Motilal Oswal - Prism Johnson (PRSMJOHNSN) MOSL: PRISM JOHNSON (Buy)-Cement division drives profitability

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Motilal Oswal

EUR 120.00 For Business Accounts Only

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

Prism Johnson: Cement division drives profitability

(PRSMJ IN, Mkt Cap USD0.5b, CMP INR75, TP INR100, 33% Upside, Buy)

Higher realization boosts cement profitability: Prism Cement’s (PRSMJ) standalone 3QFY19 revenue increased 10% YoY (+8% QoQ) to INR14.39b (our est. of INR13.96b). Cement volumes stood at 1.5mt (+10% YoY) higher than our est. of 1.44mt. Cement realizations increased 5% YoY (+0.8% QoQ) to INR4,391/t, led by stronger prices in focus markets. EBITDA/t for cement increased by INR122/t YoY to INR703 led by healthy realizations.
TBK reports EBIT loss; RMC sales increase 7%: TBK’s revenue increased 9% YoY to INR4.25b. The segment volumes increased 7% YoY. TBK reported EBIT loss of INR84m in 3QFY19 v/s EBIT loss of INR45m in 3QFY18. RMC sales stood at INR3.7b (+7% YoY), on the back of a pick-up in both real estate and infrastructure sector, especially road construction. Reported EBIT was at INR5m for 3QFY19 v/s EBIT of INR47m in 3QFY18. EBITDA increased 20% YoY (+36% QoQ) to INR1.09b, with margin at 7.6% (+0.6pp YoY; +1.6pp QoQ). Hence, PAT came in at INR190m (+28%YoY) v/s our estimate of INR166m.
Key highlights from presentation: (1) Cement division expects to commission 15MW Solar Power plant by Apr’19. (2) It also intends to place orders for Waste Heat Recovery System (WHRS) during the current quarter. (3) Premium products’ volume during the quarter formed ~20% of overall volume v/s 15% in FY18.

07/02/2019 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 JOHNSON (Buy)-Cement division drives profitability

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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