India Cements Ltd. share price target

India Cements (ICL) numbers are not directly comparable to our estimates as the company has reported sales net of GST while our estimates were including taxes. However, in absolute terms EBITDA and PAT remained in line with our estimates. Revenues decreased 3.0% YoY to |1,268.3 crore in Q2FY18 due to accounting change as previous figures are including excise while Q2FY18 number are net of GST. ICL reported a volume growth of 12.5% YoY mainly led by merger of Trishul and Trinetra cement. However, on organic basis volumes...

Margins flat QoQ: EBITDA fell 2% QoQ to INR1.85b. Margin of 14.3% was flat QoQ. Hence, blended EBITDA/ton declined INR27 QoQ to INR672, as realization decline was offset by lower other expenses. Cement EBITDA/t stood at INR647 (-INR64 QoQ). Debt levels have increased by ~INR2.5b due...

India Cements' results are not directly comparable YoY due to inclusion of financials of amalgamated Trinetra Cements (1.5 MT) and Trishul Concrete Products. Revenues increased 21.5% YoY to | 1461.6 crore mainly led by 15.1% YoY increase in volumes On a like-to-like basis, volumes remained broadly flat YoY due to sand mining issue in Tamil Nadu that accounts for 45% of the sales volumes. As a result, the share of non-south states increased resulting in higher lead distance during the quarter...

ICICI Securities Ltd | Retail Equity Research India Cements' (ICL) results are not directly comparable on a YoY basis and our estimates due to inclusion of financials of amalgamated Trinetra Cements (1.5 MT) and Trishul Concrete Products. Revenues increased 16.6% YoY to | 1,522.6 crore mainly led by 18.2% YoY increase in volumes (led by amalgamation). On a like-to-like basis (excluding Trinetra, Trishul) volumes improved 2.8% YoY to 2.5 MT EBITDA/tonne came in at | 640/tonne (including amalgamated...

As per the management, the company hasn't seen any slowdown in sales post demonetization and expects Q3FY17 to be better than Q3FY16. Currently the company is operating close to 50% of its capacity and is likely to increase utilization going forward. Also operational and profit margins will improve with better capacity utilization and cost control measures.

ICICI Securities Ltd | Retail Equity Research India Cements reported a mixed set of numbers. While revenues were above our estimates, EBITDA, PAT were below our estimate mainly due to higher than estimated operating expenses. Revenues increased 6.7% YoY to | 1307.5 crore (above I-direct estimate: | 1,278.3 crore) mainly due to 11.1% YoY increase in volume while realisation fell 4.0% YoY Cement EBITDA/tonne dropped 10.6% YoY to | 892/tonne (vs. I-direct...

India Cements (ICL) has delivered healthy performance in 2QFY17 with its operating profit standing at Rs2.24bn (-2% yoy & +11% qoq) vs. our estimates of Rs2.07bn. Cement EBITDA/tonne came in at Rs892 and EBITDA margins stood strongly at 17.2%. A substantial sequential rise in Power & Fuel cost/tonne (+8% qoq) and freight/tonne (+6% qoq) led to 6% qoq rise in cement operating cost/tonne. However, improved operating synergies through improvement in fuel mix kept yearly cost under control. Sales volume including exports improved strongly (+11% yoy & +2% qoq) to 2.40mnT owing to increased sales volume in outside Southern markets. While...

ICICI Securities Ltd | Retail Equity Research India Cement (ICL), as one of the largest cement manufacturers in the southern region, is expected to be a key beneficiary of a demand revival in the key south regions, especially Andhra Pradesh (AP) and Telangana. Out of the total cement capacity, ~45% of the company's capacity is in AP & Telangana, which witnessed a significant price hike of | 60-70/bag in September 2016. The price hike was supported by an uptick in demand and pricing discipline. Although the impact of the price hike will be miniscule in...

ICICI Securities Ltd | Retail Equity Research India Cement's results are not directly comparable with our estimates due to adoption of new accounting standard Ind-AS. During the quarter, the company reported sales including excise duty of | 1202.5 crore. Adjusting for excise duty, revenues declined 1.5% YoY to | 1,052.5 crore (below I-direct estimate of | 1,083.5) mainly due to 11.0% YoY decline in realisation while volumes increased 10.1% YoY led by volume push outside the southern region (mainly to Maharashtra)...

9 Debt reduction and operational excellence are the only two areas we understand the companywillworkaggressivelyandthisisboundtoreratevaluations. 9 Giventhestocktradesatdeepdiscounttopeers(US$55/tonne),weseedeepvaluein thestock.EvenattargetstocktradesatUS$75/tonne(~40%discounttoreplacement) 9 At this stage we do not foresee any material risk to our estimates. There is scope for earningsupgradegivenarecoveryincementprices. 9 OurearlierpricetargetofRs125isnowmetandweupgradeourtargetmultipleto7.0x EV/EBITDA(vs.5.0xearlier).WemaintainBUYonthestockwitharevisedpricetargetof...