Shree Cement's (SRCM) EBITDA recovered 8% YoY in Q3FY18, driven by 8% YoY cement volume growth while power segment delivered EBITDA loss. Rising fuel and freight costs dragged down profits across both the segments. We expect low base effect to turn favourable on YoY basis, in subsequent quarters. While the 4mn MT inorganic acquisition of Union Cement in UAE is at low cost of USD75/MT, weak demand in the GCC region has kept its revenue/EBITDA flat over the past four years and hence we do not see any major positives here. SRCM's valuation remains extremely expensive at 25x/21x/17x its FY18/19/20E EBITDA. We re-iterate SELL with a revised TP of Rs15,650....
Strong domestic show saves the day, retain Hold We maintain our Hold rating on IFGL Refractories as we see limited scope for further re-rating after stock's large outperformance to MNC peers in line with our view in last one year. Q2 performance was a mixed bag with domestic operations delivering strong results largely negated by weak results across all overseas subs. We continue to like IFGL's operationally sound high-quality global assets and expect strong earnings growth driven by i) increased share of higher-margin subs and ii) recovery in steel production in key markets of US/Europe/India (aided by...
Strong domestic show saves the day, retain Hold We maintain our Hold rating on IFGL Refractories as we see limited scope for further re-rating after stock's large outperformance to MNC peers in line with our view in last one year. Q2 performance was a mixed bag with domestic operations delivering strong results largely negated by weak results across all overseas subs. We continue to like IFGL's operationally sound high-quality global assets and expect strong earnings growth driven by i) increased share of higher-margin subs and ii) recovery in steel production in key markets of US/Europe/India (aided by...
We maintain our Buy rating on FIEM Industries with TP of Rs1,260. We expect FIEM's growth to continue aided by strong growth prospects of its two biggest clients namely Honda Motorcycle and Scooter India (HMSI) and TVS Motor. 2QFY18 top-line performance was above estimates as auto segment posted strong growth. Had it not been for issues in LED business, the performance would have looked much stronger. Recently FIEM has faced several issues in its LED business, due to an unfavourable business environment. LED business reported a loss at EBIT level due to declining sales. Despite slightly lower visibility in the LED business, we remain convinced of FIEM's...
Volume growth subdued as ramp-up remains slow & steady: Revenue rose 7.3% YoY but was down 3.5% QoQ to Rs747mn. Revenue increase YoY was largely driven by volumes but the ramp-up of Mundra line was lower than our expectations as management pointed out that minor hiccups in ramp-ups were encountered. Realisations were largely flat on US$ basis but unfavourable...
Source: Bloomberg, Centrum Research, *as on 17h November 2017 Recommendation and key risks: We have revised our FY18E and FY19E EPS downwards by 14% and 7% respectively in view of forex losses and increase in crude based raw material prices. We downgrade MPL to Hold from Buy rating, with a TP of Rs45 based on 18x March'19 EPS of Rs2.5, and a 10.7% upside from CMP. Key positive upsides would be additional ANDA approvals from US FDA and key...
AIA Engineering Ltd (AIAE), on a consolidated basis, for Q2FY18 reported weak numbers. Higher raw material prices, currency volatility and pricing strategy to acquire new clients led to margin contraction by 1,001bps YoY to 20.1%. Revenue grew by ~6% to 559 crore, on the back of volume growth of 5% to 54,573 tonne. Net profit declined by 23% to 87 crore. Net realisations stood at 99,489 per tonne (up 0.4% YoY, down 0.2% QoQ), impacted by new client additions and change in product mix. At present AIAE's net cash position stands at 1,119 crore. Management Guidance: The management has revised downwards the sales...
Ahluwalia Contracts (India) Ltd (ACIL), for Q2FY18, reported good numbers. Revenue grew 15% YoY to 335 crore, on the back of better execution. EBITDA margins expanded by 101bps to 14.9%, aided by lower raw material cost (declined by 1,250 bps to 35.1% of sales) and employee expense (declined by 454bps to 10.3%). Good operational performance along with decline in interest cost (down 35% to 5 crore), led to net profit growth of 29% to 26 crore. As of Sept'17, debt stood at 63 crore (vs 80 crore in Jun'17). Management Guidance: For FY18, the management has revised revenue growth...
We maintain our Buy rating on Mayur Uniquoters and revise our TP to Rs529 as the company's footwear business is well on its way to recovery and its high margin profile remains intact. We expect good performance to be maintained in the coming quarters, aided by i) continued recovery in the footwear segment, and ii) higher traction in exports. The company's foray into the PU business and its new plant in Mysore will also add to its growth momentum, albeit in the medium term as these projects are expected to start in the next couple of months. Q2FY18 was in-line with estimates as strong sales growth supported overall earnings. We...
We maintain our Buy rating on Mayur Uniquoters and revise our TP to Rs529 as the company's footwear business is well on its way to recovery and its high margin profile remains intact. We expect good performance to be maintained in the coming quarters, aided by i) continued recovery in the footwear segment, and ii) higher traction in exports. The company's foray into the PU business and its new plant in Mysore will also add to its growth momentum, albeit in the medium term as these projects are expected to start in the next couple of months. Q2FY18 was in-line with estimates as strong sales growth supported overall earnings. We...
