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| India Infoline Research Team / 17:06 , Feb 05, 2010 |
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- Revenues grow by 8.9% yoy; marginally above our estimates due to better average realizations
- Margin expands 40bps, above our expectations primarily due to sharp fall in power and fuel costs
- Higher tax outgo drags bottom-line lower
- Clinkerisation units at Bhatapara and Rauri commence operation
- Valuation remains expensive; Maintain SELL
Result table
(Rs m)
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Q4 CY09
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Q4 CY08
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% yoy
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Q3 CY09
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% qoq
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Net sales
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17,877
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16,414
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8.9
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16,426
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8.8
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Material costs
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(2,199)
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(1,201)
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83.1
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(2,056)
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6.9
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Personnel costs
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(784)
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(709)
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10.6
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(679)
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15.4
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Power and fuel costs
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(3,272)
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(3,931)
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(16.8)
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(3,217)
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1.7
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Freight cost
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(3,789)
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(3,381)
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12.1
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(2,978)
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27.2
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Other overheads
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(3,342)
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(3,135)
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6.6
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(2,879)
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16.1
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Operating profit
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4,491
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4,057
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10.7
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4,617
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(2.7)
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OPM (%)
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25.1
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24.7
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41 bps
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28.1
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(298) bps
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Depreciation
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(860)
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(709)
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21.3
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(719)
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19.6
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Interest
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(55)
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(148)
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(62.8)
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(52)
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5.6
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Other income
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395
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393
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0.5
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578
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(31.6)
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PBT
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3,971
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3,593
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10.5
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4,423
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(10.2)
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Tax
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(1,560)
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(1,114)
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40.0
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(1,238)
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26.0
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Effective tax rate (%)
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(39.3)
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(31.0)
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(828) bps
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(28.0)
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(1128) bps
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Exceptional Item
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-
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-
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-
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-
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-
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Adjusted PAT
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2,411
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2,479
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(2.7)
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3,185
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(24.3)
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Adj. PAT margin (%)
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13.5
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15.1
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(161) bps
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19.4
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(590) bps
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Ann. EPS (Rs)
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6.3
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6.5
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-
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8.4
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-
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Source: Company, India Infoline Research
Improved realizations, strong volumes drive revenue growth
Ambuja Cements’ (ACL) revenues grew by 18.9% yoy to Rs17.8bn, above our expectations of Rs17.1bn. Buoyant cement demand in North, Central and Eastern regions (40% of ACL market share) led to an increase of 4.5% yoy (down 5.3% sequentially) in average realizations for ACL. Net realizations for the quarter stood at Rs3,674/ton, above our estimates. Volume growth of 4.8% yoy was in-line with our expectations.
OPM expanded by 40bps on lower power and fuel costs
OPM for ACL expanded by 40bps yoy to 25.1%, which is higher than our estimates of 22.0%. Improved operating performance was on account of drop in international coal prices and higher captive power generation, which led to lower power and fuel costs (Rs679/ton against Rs854/ton). However, raw material costs surged by 498bps owing to higher clinker purchases during the quarter. Shortage of railway wagons resulted in higher freight cost to Rs786/ton against Rs706/ton during the same period previous year.
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