Angel Broking neutral on Madras Cements

Angel Broking has maintained neutral rating on Madras Cements in his February 18, 2013 research report.

Madras Cements (MC) posted a 9.3percent yoy growth in its net profit to Rs84cr for 3QFY2013,, which was above our estimates. The company posted a highly impressive 15percent yoy growth on the volume front despite being impacted by a 16- day strike by cement dealers in Kerala. Realizations were higher by 3.6percent yoy.”
“For 3QFY2013 Madras Cements has posted a 17.7percent yoy growth in its net sales to Rs872cr. The revenue of the cement division rose by 17.8percent yoy to Rs864cr, while the windmill division’s revenue stood at Rs9cr, up 13.0percent on a yoy basis. The OPM for the quarter stood at 23.2percent, down 825p on a yoy basis, despite the higher realization, on account of increase in raw material and freight costs. The EBITDA/tonne fell by 14.1percent yoy and 28.8percent qoq to Rs988.”
“Going ahead, we expect Madras Cements to post an 14.9percent and 14.1percent CAGR in its top-line and bottom-line respectively over FY2012-14. At the current market price, the stock is trading at a valuation of US$91/tonne on current capacity (US$76 on FY2014E capacity), which we believe is fair. We continue to maintain our neutral recommendation on the stock,” says Angel Broking research report. Institutional holding more than 40% in Indian cos 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 on the attachment

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