Edlweiss - Ballarpur Industries - Q307 result update - Mantain Buy

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Deadpresident

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Apr 16, 2007, 2:20:43 AM4/16/07
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Ballarpur Industries Q3FY07 results were in line with our expectations.

 

Key Highlights

         

      Q3FY07

 

  • Net Sales up by 17% YoY & flat QoQ at INR 5.5 bn.
  • EBITDA up by 12% YoY and 2% QoQ at INR 1.41 bn with EBITDA margins at 25.6% down by 100 basis points YoY & up by 50 basis points QoQ primarily on account of higher raw material prices.
  • Net Profit up by 22% YoY and 3% QoQ at INR 641 mn. The Net margins at 11.6% were marginally up by 50 basis points YoY & up by 30 basis points QoQ.
  • The paper & paper products division together contributed 86.5% to the revenues compared to 81.28% in Q3FY06
  • The paper products (stationery) division's revenue grew to INR 655 mn up by 405% YoY & 4% QoQ.
  • The total paper & paper products sales volumes for Q3FY07 were 115,055 MT up 17% YoY. Revenues for the same were at INR 5.2 bn up by 23% YoY with average realisation at INR 45,329 per tonne. We have assumed an average realisation of INR 44,250 per tonne for FY07E.
  • The total pulp sales for Q3FY07 were at INR 707 mn up by 1%
  • During the quarter ended company has allotted 3.4 mn equity shares at a price of INR 86.2 per share conversion of a part of Foreign Currency Convertible Bonds (FCCBs) of USD 45 million, which were allotted by the company in 2003.
  • Figures for the current quarter are not comparable with the corresponding quarter previous year, as current quarter figures include impact of merger of APR Packaging Ltd. and Power business restructuring.
  • The ROE decreased from 14.3% in Q2FY07 to 14.2% in Q3FY07 .

§         The company has successfully completed the acquisition of shares of Sabah Forest Industries; Malaysia on 16/3/07.The Company has invested USD 60 mn in equity of Ballarpur International for the above purpose. (Results don't include performance of Sabah)

  9MFY07

 

  • Net sales were up by 21 % YoY INR 16.3 bn.
  • EBITDA up by 15% YoY at INR 4.11 bn with EBITDA margins at 25 % down by 130 bps
  • Net profit up by 28% YoY at INR1.8 bn with PAT margins at 11.3% up by 60 bps.

Valuations

 

  • Stock is currently trading at 7.2 x FY07E EPS of INR 15.2 & 6.1x FY08E EPS of INR 17.9 (without Sabah).
  • We reiterate our Buy recommendation.

(We would be revising our FY08E estimates, once we incorporate Sabah in our financials)

 

 

 


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