Fwd: Ultratech Cement Q2FY12 Result Update; Recent price hikes drive earnings & rating upgrade; Target: Rs 1,170

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Deepak Vaishnav

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Oct 22, 2011, 5:02:23 AM10/22/11
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Ultratech Cement Ltd.

Recent price hikes drive earnings & rating upgrade

 

HOLD

 

CMP: Rs 1,111                                        Target Price: Rs 1,170

n     EBITDA of Rs5.81bn (+43% yoy) below est Rs5.96bn dragged by higher freight costs (Rs 819/t up 15% yoy) & RM costs (Rs594/t, 14% yoy). Higher other income drive net profit beat

n     Minimal sequential drop in cement prices in south (22% of UTCEM’s sales) &low base drive +20% yoy jump in realization to Rs4241/t, helping 21% growth in topline 

n     Cement price already up 6% from Q2FY12 avg, led by shorter pre Diwali construction season and continued cost pressures. Despite factoring in higher costs, the momentum in price hikes has led to EPS upgrade of 3.6%/2.5%- for  FY12E/13E

n     Recent decline in petcoke price & sharp price hikes to improve UTCEM’s profitability going forward. Upgrade to HOLD, revise price target to Rs1170

 

Regards,

Ajit Motwani

Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : ajit.m...@emkayglobal.com 

Board No. : +91-22-66121212 | Extn. : 255 | DID : 66121255 | Mob : +919820934229 |

 

 


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Ultratech Cement Q2FY12 Result Update.pdf
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