India Cements - Whiff of good times - Kotak

India Cements reported a poor result, with 4% qoq decline in realizations leading to a significant miss in operating results (25% below estimates). However, a meaningful increase in prices of cement (by as much as Rs30-40/bag) over the weekend coupled with improving volume metrics (7% yoy in 4QFY13) raises hopes of a better start to FY2014E.

While a high operating and financial leverage makes earnings significantly volatile, valuations (5X EV/EBITDA) remain at trough levels.

Source : Equity Bulls

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