UltraTech Cement - In-line Performance; Volume led beat - YES Securities

Result Synopsis

Ultratech cement (UTCEM) reported volume beat (YSEC est. by +8%) with sequential growth of +20% aided revenue growth of +21% (YSEC est. by +9%) while NSR was up by +1% in Q4FY22. EBITDA/te (Rs1110) stood in-line with our estimates, driven by flat sequential cost/te in Q4FY22. However, strong volume growth beat EBITDA by +15% while PAT was also higher (93%) on account of the tax credits in Q4FY22. For FY22, UTCEM posted a record volume of 94MT (+18% y/y; YSEC est. 92MT) along with healthy NSR (+8% y/y), bolstering +18% revenue growth to Rs526bn (All time high) and reported EBITDA of Rs115bn (flat y/y) due to operating cost increase by +24% y/y in FY22. The upcoming 19.5MTPA capacities by end of FY23E aids UTCEM to cater the inherent cement demand to translates in strong volume growth of +7/11% y/y, resulting in +11% y/y (previously +6/11%) revenue growth for both FY23/24E. Due to the elevated fuel/diesel cost, we reduce our EBITDA est. by 10/2% for FY23/24E, while PAT to remain flat for FY23E and up by +8% for FY24E. Over healthy operating profit, we expect a free cash flow generation of Rs164bn post the CAPEX outlay of Rs47bn over FY23-24E. Reported Net Debt/EBITDA continues to be bottom low at 0.32x in Q4FY22 v/s 0.49x in the last quarter. We retain our BUY recommendation with a TP of Rs8,670 (previously Rs8,730), valuing the stock at 16.5x EV/EBITDA on the FY24 estimates.

Result Highlights

- UTCEM reported consol. volume of 27.7MT (+20% q/q and flat y/y) with healthy NSR (+1% q/q and +10% y/y) took the report revenue to Rs158bn (+21% q/q and +10% y/y; beat YSEC est. by +9%) in Q4FY22.

- Due to sequentially flat operating cost/te (+19% y/y), EBITDA/te improved by 6% to Rs1100 (v/s YSEC est. Rs1047/te) while decline by Rs219/te y/y in Q4FY22.

- Tax reversal surge PAT substantially by +44% q/q and +36% y/y to Rs24.6bn, beat YSEC est. Rs12.7bn in Q4FY22.

- For FY22, total volume stood at 94MT (+18% y/y) against YSEC est. of 92MT with in-line NSR (+8% y/y) led UTCEM to report all-time high revenue of Rs526bn up by 18% y/y (YSEC est. of Rs513bn).

- Despite surge in operating cost by 24% y/y, EBITDA remained flat y/y to Rs115bn (in line with YSEC est. Rs111bn) in FY22 was majorly due to the higher volume and healthy NSR cushioned the EBITDA fall. UTCEM maintained its EBITDA/te at Rs1225 (in-line YSEC est.) in FY22.

Shares of UltraTech Cement Limited was last trading in BSE at Rs. 6677.75 as compared to the previous close of Rs. 6629.00. The total number of shares traded during the day was 6239 in over 2103 trades.

The stock hit an intraday high of Rs. 6728.55 and intraday low of 6543.85. The net turnover during the day was Rs. 41525681.00.

Source : Equity Bulls

Keywords

UltraTechCement INE481G01011 Q4FY22 FY2022 ResultUpdate YESSecurities