Prism Cement Ltd's Q4FY18 standalone net profit declines 10.6% yoy to Rs62.7cr : Beats Estimates

The company’s standalone revenue stood at Rs1,613.7cr, up 13.4% yoy and 23.7% qoq.

May 29, 2018 03:05 IST India Infoline Research Team

Prism Cement Ltd Q4FY18

Standalone Results Q4FY18: (Rs. in cr)

Q4FY18 YoY (%)
Revenue 1,613.7 13.4
EBITDA 169.3 40.3
EBITDA Margin (%) 10.5 201
Net Profit (reported) 62.7 [10.6]
***EBITDA margin change is bps
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Reco. Price

107

Last updated on

16-May-2018

Prism Cement reported strong set of numbers for the quarter, significantly ahead of our estimates. Net sales for the quarter grew by 13.4% yoy to Rs1,613.7cr, ~19% ahead of estimates. Gross margin expanded by 361bps yoy. Thus, EBITDA jumped by 40.3% yoy to Rs169.3cr (~11% higher than estimate) and EBITDA margin expanded by 201bps yoy to 10.6%. However, due to lower other income and higher interest and tax outgo, PAT declined by 10.6% yoy to Rs62.7cr (~20% higher than estimate).
  • The segmental revenue numbers are not comparable on yoy basis due to different treatment of excise duty and GST.
  • The cement division reported ~8% yoy volume growth during the year to 1.7MT (including clinker sales). Led by improvement in realisation, the reported EBITDA/tn improved to Rs819/tn against Rs580/tn in Q4FY17 despite upward movement in the fuel prices.
  • The tiles division reported 22.2% qoq growth (yoy numbers are not comparable). On yoy basis the division reported volume growth. This was primarily led by scale-up in its marketing activities through various initiatives like strengthening of distribution network and merchandising. Company also focused on cost optimization, and hence, reported positive EBIT of Rs9.6cr against loss of Rs25.7cr in Q4FY17 and Rs4.5cr in Q3FY18.
  • The RMC Readymix (India) (RMC) division reported 10.9% qoq growth in the revenue (yoy numbers are not comparable) led by better volume growth. The performance of mega vertical continues to be promising on the back of increasing order book.
  • Interest cost during the quarter jumped by 32.1% yoy, however, it was down by 7.1% sequentially.
  • Other income declined by 81.8% yoy to Rs4.9cr.
  • Tax rate for the quarter was 30.3% against 4.9% in Q4FY17.
  • During the year, company signed a Memorandum of Understanding (MoU) with the Uttar Pradesh state government for setting up a cement Grinding Unit with a total investment of ~Rs250cr. Through the GU, company expects to optimize its logistic costs as well as improve local availability in its strategic markets of Uttar Pradesh.
  • Further, company plans to terminate the existing supply agreement with ECO Cements Limited (ECL) for manufacturing and supplying of cement (for thr Bihar market) during Q2FY19E. The company plans to cater to the Bihar market from its plant at Satna, Madhya Pradesh (as was done prior to the arrangement with ECL). ECL constituted ~6% of FY18 overall sales volume.
  • With effect from April 18, 2018, the company has been renamed as Prism Johnson Ltd, formerly Prism Cement Ltd.
Outlook
  • The company sells cement in Uttar Pradesh, Madhya Pradesh and Bihar. With government’s thrust on development as core agenda and increasing spend on infrastructure and housing in state Budgets, company remains positive on the cement demand outlook in these states.
  • For the Tiles division, company’s focus is on increasing the utilization levels and better working capital management. Further, company has undertaken several demand generation initiatives over the past few quarters, primarily influencer engagement and opening of five large formats display centers in Guwahati, Chennai, Kolkata, Coimbatore and Kochi. Moreover, company is making efforts to increase its presence in unrepresented markets.


Technical View:

Prism Johnson Ltd ended at Rs. 115.95, up by 2.05 points or 1.8% from its previous closing of Rs. 113.90 on the BSE. The scrip opened at Rs. 114.50 and touched a high and low of Rs. 119.15 and Rs. 112.75 respectively. A total of 6,48,595 (NSE+BSE) shares were traded on the counter. The stock traded below its 200 DMA.

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