India Cements Ltd - In line Results - Emkay

Reco: Hold
CMP: Rs 85
Target Price: Rs 103

- Q1 EBITDA at Rs2.77bn (+15% yoy) in line with est. Volume growth remains tepid (2.9%); realization improvement of 7.7% drives 11% growth in cement revenues to Rs10.6bn.

- P&F, + 17.2% yoy (Rs1209/t) led by higher power tariffs in AP & TN. Similarly freight (Rs935/t),+20.2% yoy led by rail freight hike & higher lead distances. EBITDA/t at Rs1028,+4.6% yoy.

- ICEM's CPP @ TN (50 MW) stabilized. Coal production from Indonesia to commence by Q313, ramp up seen in FY14. CPP @ AP (50 MW) commissioning by Q413 to lower energy costs.

- Cement price trends in July along with P&F cost savings lead to earnings upgrade. Though valuations at 5.8X EV/E & EV/T USD 72 reasonably fair, lack of triggers(volume growth) leaves little room for out performance.

Source : Equity Bulls

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