Chettinad Cement an outperformer, target of Rs 495: Karvy

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Chettinad Cement an outperformer, target of Rs 495: Karvy

Broking house, Karvy Stock Broking is bullish on Chettinad Cement and has maintained outperformer rating on the stock with a price target of Rs 495.

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Chetinad Cem BSE | NSE 29/05/12 Are Mutual Funds betting on Chetinad Cem?

Broking house, Karvy Stock Broking is bullish on Chettinad Cement and has maintained outperformer rating on the stock with a price target of Rs 495.

The Karvy Stock Broking report on Chettinad Cements:

"Chettinad Cement Q1FY07 results were above our expectations. Driven by the strong industry conditions, the company recorded 53% yoy growth in its revenues to Rs 1.7 billion in Q1FY07 compared to our expectation of Rs 1.4 billion. Sales growth was driven by 38% increase in net realization against our expectation of 18% growth. Apart from the strong industry conditions, the company was also helped by the reduction in excise duty in Tamil Nadu. Chettinad Cement generates 50% of its revenues from Tamil Nadu."

"Strong realization helped the company's EBITDA margins to expand 260 basis points. The company's EBITDA margin for Q1FY07 was 33.4%, up from 30.8% recorded in Q1FY06. Despite, the strong realization the company's EBITDA margins did not expand much compared to its peers. The main reason behind this was higher raw material costs and fuel costs."

"The company reported 130% increase in net profit, primarily driven by higher revenues and lower tax provisioning as a percentage of PBT at 33% in Q1FY07 compared to 42% in Q1FY06. The company reported EPS of Rs 23.7 in Q1FY07 compared to Rs 10.3 in Q1FY06."

"We maintain our outperformer rating with 12 month price target of Rs 495."