Ambuja Cements Ltd. share price target

INR75/t in 3QCY17, as VAT incentive of INR380m was not recognized. Higher RM cost impacts margins: EBITDA increased 15% YoY to INR3.54b, translating into a margin of 15.3% (-7.5pp QoQ, flat YoY). EBITDA/ton rose 5% YoY to INR706, but fell by INR367QoQ due to a 43% QoQ increase in raw material cost/t on higher prices of flyash and kiln shutdown of Bhattapara unit. Power & fuel cost/t increased 4% QoQ due to higher prices of petcoke and fuel. Other expenses declined 6% YoY due to the reversal of DMF charges of INR446m this quarter. PAT thus increased 10% YoY to INR2.7b....

Maintain SELL with a TP of Rs 220 (ACC/ACEM at 9.0/10.0x June 19 EV/EBITDA). Ambuja Cement (ACEM) reported an EBITDA/t of Rs 1,010/t (vs. estimate of Rs 885/t, 2.2% YoY, 67.1% QoQ). Strong pricing in both West (~40% of dispatches) and also East (~25%), drove realisations up 10.9% QoQ (Rs 4,651/t, 7.6% YoY, est 8.0% QoQ). Other operating income was also higher (Rs 380mn, 94.1% YoY, 30.8% QoQ), and this added to the earnings beat (Rs 3.71bn, -13.2% YoY, 59.1% QoQ).

ICICI Securities Ltd | Retail Equity Research Ambuja's results were broadly in line with our estimates. While revenues and EBITDA were in line with our estimate, PAT was below our expectation mainly due to 50.5% YoY fall in other income (this was mainly due to dividend of | 56 crore received in Q1CY17 whereas the same was received in Q2CY16) Revenues increased 11.7% YoY (up 11.4% QoQ) to | 2,823.3 crore (vs. I-direct estimate of | 2,764.1 crore) led by 5.0% YoY increase in...

Even by pre-monsoon standards, the realizations were way-above-expectations. Thereby, in a seasonally-lean quarter ahead, the sequential drop in realization, we suspect, could be sharper. Add narratives on housing walking the talk, ACEM may end up CY17, as expected, with 78-80% in capacity utilization. Come 2018, fuel from Gare Palma, a coal block, will fire a quarter of kilns. Further, with alternate firing a tenth, the balance two-thirds could be met by Pet-coke. As a...

Ambuja Cements (ACL) has reported a better-than-estimated performance owing to higherthan-expected recovery in average realisation despite cost pressure. Operating profit grew by 6% YoY and 68% QoQ to Rs6.1bn vs. our estimate of Rs5.1bn. Average realisation improved by 7% YoY and 11% QoQ mainly aided by a substantial price recovery in Western markets, where it sells over 40% of its total production. Sales volume grew by 4% YoY and 0.8% QoQ to 6.07mnT. Operating cost/tonne surged by 9% YoY and 1% QoQ to Rs3,641 mainly due to spike in power and fuel cost/tonne (+16% YoY and +4% QoQ) and freight cost/tonne (+7% YoY). While EBITDA margin declined by 116bps YoY to 21.7%, EBITDA/tonne came in at Rs1,010 in 2QCY17 compared to Rs992 and Rs597 in 2QCY16 and 1QCY17, respectively. Net profit stood at Rs3.9bn topping our...

Revenue rose by 15.86% to Rs. 5631.9 Cr in Q1CY17 when compared to the previous quarter. Also it increased by 6.83% when compared with Q1CY16.

ICICI Securities Ltd | Retail Equity Research Ambuja's results were above our expectation mainly due to higherthan-expected topline. The beat on the topline front was led by 2.7% YoY increase in volumes to 6.0 MT, which came in as a positive surprise against 12% YoY decline in pan-India production volumes in Q1CY17 as per core industry data Revenues increased 5.3% YoY (up 15.3% QoQ) to | 2,533.4 crore (above I-direct estimate of | 2,202.0 crore) led by 2.7% YoY increase in volumes to 6.0 MT(above I-direct estimate of 5.2 MT) and 2.5%...

Ambuja Cements' (ACEM) result was below our estimates with EBITDA at Rs3.7bn against estimated Rs4.2bn and EBITDA/tn of Rs606 against estimated Rs699 led by lower realization (3% below estimates) and higher operating costs (freight and employee). Sales volume was at 6mt, up 0.9% YoY. Realization was up 4.4% YoY (but, down 2.5%...

We were caught flat-footed on operating efficiency. Despite rising trend in costs both freight and fuel, cost-control initiatives on gypsum led to better EBITDA/ton. At the current valuations, the implied EBITDA/ton is far from reality. While we draw little comfort, we give ACEM the benefit of doubt. We maintain HOLD....