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)