UltraTech Cement - 4QFY2013 Result Update - Angel Broking

UltraTech Cement (UltraTech)'s 4QFY2013 bottom-line performance was in-line with our estimates. The company posted a 16% yoy decline in its bottom-line to Rs. 726cr, as volumes fell by 3.6% yoy and operating costs/tonne rose by 6.6% on a yoy basis. We remain Neutral on the stock.

OPM at 23.4%: UltraTech's 4QFY2013 stand-alone top-line was flat on a yoy basis and was below estimates on account of both lower-than-estimated volumes and realization. The company's cement volumes (grey and white cement) fell 3.6% yoy to 11.4mn tonne. Blended realizations for the quarter stood at Rs. 4,727/tonne, higher by 4.6% on a yoy basis, although flat on a sequential basis. While the operating cost/tonne rose by 6.6% yoy, it fell by 0.9% on a qoq basis, resulting in a better-than-estimated operating profit. The lower operating cost/tonne was on account of a steep 10.6% qoq decline (down 8.1% yoy) in P&F cost/tonne. Interest expenses too were lower by 18.4% yoy at Rs. 48cr. During the quarter, the company's tax expenses included additional charges of Rs. 87cr towards deferred tax liability due to increase in the rate of surcharge.

Outlook and valuation: We expect UltraTech to post an 11.7% and 9.3% CAGR in its top-line and bottom-line over FY2013-15, respectively. At the current levels, the stock is trading at an EV/tonne of US$159 on FY2015 capacity, which we believe is fair. We continue to remain Neutral on the stock.

Source : Equity Bulls

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