February 08, 2017 / 13:45 IST
Cement volumes grew 20% YoY to 3.56mt (est. of 3.43mt), led by ramp-up of new capacity in Belgaum and strong volume growth in south due to increased construction activity in AP/Telangana. Realizations declined 3% YoY to INR 4845 (-1% QoQ; in-line) due to weak realization in east. Revenues thus increased 17% YoY to INR 17.25b (vs est of 16.5b).
OutlookWith the conclusion of most large asset sales in India, the potential risk of increase in debt by way of asset acquisition has mitigated. The deployment of incremental free cash generation towards debt reduction would lead the next phase of re-rating. We value DBEL at EV/EBITDA of 11X FY19E or INR 2246/share.
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