Dear All,
Forwarding you the Result Update on UltraTech Cement for 4QFY2011 with a Neutral recommendation.
For 4QFY2011, UltraTech Cement (ULTC) posted robust 127.9% qoq growth in bottom line to `727cr, aided by ~13.5% growth in dispatches coupled with a 7.7% improvement in realisation. The company’s domestic dispatches for the quarter stood at 10.37mn tonnes. Further, the bottom line during the quarter was boosted by one-off `115cr of tax reversal during the quarter. We remain Neutral on the stock.
Strong improvement in realisation leads to stellar operating performance: For 4QFY2011, ULTC’s net sales rose by robust 20.9% qoq to `4,490cr on the back of higher dispatches and better realisation. Growth in dispatches was aided by a pick-up in demand across the country during the quarter. However, ULTC faced margin pressure during the quarter due to higher power and fuel, freight and raw-material costs. Higher input costs neutralised the improvement in realisation to a considerable extent. OPM for the quarter stood at 24.2%, up 460bp qoq. On a like-for-like basis, net sales rose by 6.8% yoy, while PBIT rose by 5.4% yoy.
Outlook and valuation: We expect ULTC to post a 25.0% CAGR in its top line over FY2011–13, aided by higher volumes (also FY2011 financials included only nine months of Samruddhi’s operations). At current levels, the stock is trading at an EV/EBITDA of 6.4x and EV/tonne of US$126 on FY2013 estimates, which we believe is fair. Hence, we maintain our Neutral recommendation on the stock.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600 Ext: 6864 ,6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,5th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600, Ext: 6864, 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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