Hold Mangalam Cement - Anand Rathi

Mangalam Cement (Price: Rs.178, Target: Rs.191, Rating: Hold)

We expect Mangalam Cement to post 5% yoy revenue decline, driven by an 8% yoy volume dip (up 5% qoq). Realisation is expected to inch up 3% yoy (down 3% qoq).

Capacity constraints and slowdown in demand growth in the North and Central regions would lead to subdued volume growth. This would be addressed from 2HFY14 by when 1.25m tons of new capacity would have been stabilised.

We expect the company to post EBITDA per ton of Rs.600 (compared to Rs.820 in the previous quarter and Rs.810 in the year-ago quarter), leading to EBITDA decline of more than 30% yoy (and 23% qoq). This is expected to flow through to net profit at Rs.184m, a dip of 30% yoy and 35% qoq.

Source : Equity Bulls

Keywords