India Cements - March 2013 Results Preview - Motilal Oswal

- India Cements' volumes are expected to grow by 2.4% YoY (+10% QoQ) to 2.66mt. Volatile pricing environment (except Andhra Pradesh) to result in growth of 2.3% QoQ (+5.1% YoY) to INR4,464/ton. We estimate revenues of ~INR58m from IPL (v/s INR2m/INR90m in 4QFY12/3QFY13).

- EBITDA is estimated at INR2.2b (+17% QoQ and +4.5% YoY) and EBITDA margin would improve by 0.9pp QoQ (-0.6pp YoY) to 18.7%, translating into PAT decline of 12% YoY (+120% QoQ) to INR574m.

- Pure Cement's EBITDA/ton is estimated to increase by ~INR29/ton QoQ (flat YoY) to INR819/ton.

- We downgrade EPS estimates by 14.4%/14.5% for FY14E/15E at INR10.9/ INR16.4, led by lower realizations and volume growth.

- Valuations are at 5.1x FY15E EPS, 3.7x FY15E EBITDA and USD57/ton. Maintain Buy with a target price of INR103 (4x FY15E EV/EBITDA).

Source : Equity Bulls

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