Angel Broking recommends Neutral on Ambuja Cements - 1QCY2014 Result Update

For 1QCY2014, Ambuja Cements (ACEM) posted a reasonably strong performance on the operational front. The company's EBITDA rose by 6.3% on a yoy basis (up 91% on a sequential basis).

OPM at 22.3%, up 53bp yoy: For 1QCY2014 ACEM's stand-alone top-line rose by 3.7% yoy to Rs. 2,640cr. The growth was driven by a 2% yoy increase in realizations to Rs. 4,356/tonne and a 1.7% yoy increase in volumes to 6.1mn tonne. Higher realizations were on account of steep increase in cement prices in the northern and western regions during the quarter. On a sequential basis the company's realization was higher by 5.2%. Aided by higher realization, the company's OPM increased by 53bp yoy to 22.3%. The Adjusted PAT (adjusted for tax credit of Rs. 95cr) rose by 14.6% yoy to Rs. 425cr.

Outlook and valuation: We expect ACEM to register an 11% CAGR in top-line over CY2013-15E. The company's bottom-line is expected to grow at a CAGR of 24.1% over the same period. At the current market price, the stock is trading at an EV/tonne of US$139 on CY2015E capacity, which we believe is fair. Hence, we continue to remain Neutral on the stock.

Shares of AMBUJA CEMENTS LTD. was last trading in BSE at Rs.201.3 as compared to the previous close of Rs. 197.45. The total number of shares traded during the day was 81031 in over 1845 trades.

The stock hit an intraday high of Rs. 202.3 and intraday low of 197.5. The net turnover during the day was Rs. 16259439.

Source : Equity Bulls

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