Shree Cement Q1 PAT seen up 4.9 times to Rs 190 cr YoY

Shree Cement, one of the largest cement producers in north India, is set to declare its results today for the period of three months ended September 2012. Analysts on an average expect the profit after tax to grow by 4.9 times year-on-year to Rs 190 crore in the quarter gone by.

Revenues are seen going up by 49 percent to Rs 1,275 crore in the first quarter of current financial year 2012-13.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to go up by 87 percent YoY to Rs 374 crore and EBITDA margin is likely to rise by 590 basis points to 29.3 percent during the same period.

But its performance compared to previous quarter is likely to be very tepid. Analysts expect Shree Cement's revenue to go down by 12.4 percent and profit after tax down by 45.9 percent quarter-on-quarter. EBITDA is expected to fall by 22.3% and EBITDA margin down by 380 basis points QoQ to 29.3% in the quarter ended September 2012.

Shree Cement has changed its accounting method; now it will close its accounts on June 30 of every year.

Please Note: The profit after tax can be volatile due to tax rate and depreciation changes.

On a YoY basis, analysts expect sharp improvement in PAT aided by reduction in depreciation expenses. They expect depreciation charges to decline as the company has not commissioned any asset during the quarter.

Key highlights

Topline will be driven by strong recovery in both cement and merchant power business.

Healthy growth in cement volumes is on account of the stabilization of its new capacity. It will be aided by relatively better demand environment in the northern region.

Power is likely to have a higher contribution and higher merchant sales:

The company is likely to sell around 400 million units of power in the quarter with an average realisation of Rs 4 per unit. Merchant power sale is estimated at 100 million units (as against 14 million units YoY and 390 million QoQ) at Rs 4.25 per unit (as against Rs 4.44 in June quarter of 2012 and Rs 4.98 in September quarter of 2011).