Dalmia Bharat: 4QFY13 numbers are not comparable YoY & QoQ as financials are consolidated - Motilal Oswal

- 4QFY13 numbers are not comparable YoY & QoQ as financials are consolidated for its recently acquired Calcom and Adhunik in 3QFY13 onward. Not adjusting for the same, net sales grew by 15.8%YoY (+13% QoQ) to INR7.6b.

- Cement volumes grew +12%YoY (+13% QoQ) to 1.68MT (including 0.24 MT from north east operations). Volume from core southern operations was down by 4%YoY (+10.4%QoQ) to INR1.44 MT. Blended cement realizations was flat QoQ (+2.4%YoY) to INR4,422/ton. Adjusted for other businesses pure cement realization stood at INR4,370/ton (+INR79/ton QoQ).

- EBITDA de-grew by 5%YoY (+2%QoQ) to INR1.3b, while EBITDA margins declined by 1.9pp QoQ (-3.7pp YoY) to 17%. Blended EBITDA/ton stood at INR774 (-INR84/ton QoQ and -INR64/ton YoY), impacted by consolidation of north east plants with weak profitability, higher freight costs, higher branding spent for 'Dalmia' brand launch in North East and limited operating leverage.

- PAT stood at INR371m (+3.5x YoY and +2x QoQ) as an impact of consolidation of north east capacities and sequentially higher other income.

- Ongoing expansion projects are progressing broadly on schedule with (1) 2.5MT Karnataka plant to be commissioned by 1QFY15, (2) 0.8mt Calcom plant to be operational by 1QFY15 and (3) 1.35MT OCL Medinipur plant to be commissioned by FY14-end.

- We are revising our estimates for FY14/FY15 by -10%/+7% to INR27/INR37 to factor in change in assumptions for realizations increase of INR6.5/bag in FY14 (v/s INR13.5/bag earlier) and increase of INR15/bag in FY15 (v/s INR12.5/bag earlier). DBEL trades at attractive valuations of USD37/ton for 15mtpa of pro-rata capacity (~22mtpa capacity under control) and 3.1x FY15EBITDA. Maintain Buy with target price of INR293 (FY15 SOTP based).

Source : Equity Bulls

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