India Cements - Q3FY12 Result Update - Emkay

Reco: HOLD
CMP: Rs 94
Target Price: Rs 101

Operating performance in line. Maintain HOLD

- EBITDA at Rs1.95bn (+54% yoy) in line. P&F costs up 9% qoq led by SCCL strike & INR appreciation (imports 60% of coal). Lower tax drove net profit beat (Rs563 mn, est of Rs451 mn)

- Volumes up 7% yoy while realizations up 16% yoy (Rs4243/t) fuelled 24% yoy growth in cement sales at Rs9.3 bn. EBIDTA/t at Rs862/t grew by a handsome 53% yoy

- Nov-Dec demand growth in south encouraging. (AP:+12%, TN:+18%). Additionally ICL to benefit with favorable currency movement & as supplies from SCCL mines resumed

- Upgrade FY12/13 EPS by 44%/22% led by better realizations & volume upgrade. Revise target to Rs101 (Rs86 earlier) to factor in earnings upgrade

- Stock at PER 12.7x, EV/EBIDTA of 5.7X and EV/ton of USD90 for its FY13E numbers- leaves little upside considering that ICL'S RoCE is still below the cost of capital - Maintain HOLD.

Source : Equity Bulls

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