SENSEX NIFTY
Jan 23, 2013, 02.41 PM IST | Source: Moneycontrol.com

Buy Shree Cements; target of Rs 6227: Motilal Oswal

Motilal Oswal is bullish on Shree Cements and has recommended buy rating on the stock with a target of Rs 6227 in its January 22, 2013 research report.

Motilal Oswal is bullish on Shree Cements and has recommended buy rating on the stock with a target of Rs 6227 in its January 22, 2013 research report.
 
“Shree Cement's 2QFY13 operating performance met estimates, with EBITDA of INR3.7b (v/s est INR3.7b). 2QFY13 revenues grew by 19.4% YoY (+7.9% QoQ) to INR14.3b (v/s est INR14.7b). EBITDA grew by 12% YoY (down 5.4% QoQ) to INR3.7b, translating into EBITDA margins of 26% (v/s est 25.4%) - a decline of 3.7pp QoQ (-1.8pp YoY). Moderated depreciation, lower tax resulted in adj. PAT of INR2.3b (v/s est IN2b).”
 
“Cement volumes grew 5.2% YoY to 3mt, while blended realizations deteriorated INR9/bag QoQ (+INR146/ton YoY) to INR3,724/ton (v/s est INR3,731/ton). Cement EBITDA/ton was at INR1,017/ton (v/s est INR1,010/ ton) and lower by INR168/ton QoQ (-INR98/ton YoY). Though the decline in realizations was marginally moderated by lower energy cost caused by a decline in pet coke prices by ~11% QoQ, the benefit was diluted by higher other expenses (on account of maintenance shutdown). Merchant power volumes in 2QFY13 was at ~786m units, against ~307m units in 1QFY13 (v/s 586m unit in 3QFY12), with revenues of INR3.1b (v/s INR1.4b in 1QFY13 and INR1.8b in 3QFY12) and EBITDA of ~INR670m. Merchant power realizations were INR3.97/unit (v/s INR4.44 in 1QFY13), with in line EBITDA/ unit at INR0.85/unit (v/s INR1.1 in 1QFY13) respectively.”
 
“We raise normalized EPS estimates (for accelerated depreciation) by ~7%/ 3%/2% for FY13E/FY14E/FY15E to INR327/INR386/INR469 respectively, led by lower tax rate. Management has reduced its depreciation guidance for FY13 to ~INR4b (v/s INR5.4b earlier). The stock trades at 11.7x/9.6x FY14E/FY15E EPS, 6.2x/4.7x EV/EBITDA and USD114/ton FY15E (adjusting for merchant power assets of ~400MW). Maintain Buy with a revised target price of INR6,227 (SOTP-based),” says Motilal Oswal research report.

Shares held by Central Governments/State Governments

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click here

Set email alert for

ADS BY GOOGLE

video of the day

Market in fine fettle; 2014-end Sensex target at 26300:Citi

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.