Ambuja Cements Ltd - Q1CY12 First Cut - GEPL Capital

Net sales for Q1CY12 grew by 19.7% on Y-o-Y basis to Rs 26,609 mn. This was mainly driven by higher volumes and better realisation.

EBIDTA Margins for Q1CY12 stood at 29%, showing an increase of 80 bps on Y-o-Y basis and 995 bps on Q-o-Q basis.

Net profit for Q1CY12 declined by 23.4% on Y-o-Y basis to Rs 3,122 mn, the decline was attributable to Change in depreciation method for fixed assets pertaining to captive power plant from SLM (straight line) method to Written down value method (WDV). As a result of this company has recognized an additional depreciation of Rs 2,890.8 mn. Amount relating to earlier years has been disclosed as exceptional item amounting to Rs 2,791.3 mn.

The PAT would have been higher by Rs 1952.9 mn if the cmpany continued to use earlier method of depreciation.

For the quarter ended March 31, 2012, Ambuja has reported topline growth of 19.7% which is slightly below our estimates of 22.5% Y-o-Y. However, at the EBIDTA level company has reported better numbers owing to lower increase in power & fuel costs and Transportation costs as compared to ACC. Demand for cement is expected to remain strong in Q1FY13; however, on account of recent intervention by CCI on carterlisation, we don't expect a strong up tick in cement prices in Q1FY13. We believe, with RBI's move (50 bps cut in repo) might trigger demand from housing and industrial segment in the near term. Also projects like DMIC (Delhi Mumbai industrial corridor) coupled with encouraging data on project implementation under public private partnership to aid cement companies in the long run.

Source : Equity Bulls

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