Ultratech Cement Ltd Q1FY18 Result Update Rating - HOLD - Arihant capital Markets Ltd

For the quarter Q1 FY18 Ultratech Cement's realizations witnessed a steady growth of 7.28% on a YoY basis. Domestic sales volume decreased marginally by 1% to 12.59 mnt while the total volumes grew by 5% to 13.2 mnt YoY.

Ultratech Cement's standalone revenue came in at Rs 7520 cr vs. Rs. 7095 cr, a growth of 5% on Y-o-Y basis. On consolidated basis the revenue for the quarter stood at Rs 7928 cr vs. Rs 7425 cr Y-o-Y. EBITDA margins expanded by 100 bps to 26% on Y-o-Y basis. Net profit after tax for the quarter increased by 15% YoY on consolidated basis to Rs 898 cr while standalone PAT stood at Rs. 890 cr. Total comprehensive income for the quarter stood at Rs 873 cr vs. Rs 776 cr on consolidated basis, a rise of 12% YoY.

Energy cost increased by 28% to Rs 871/t. Impacted by increased petcoke prices and higher usage of industrial waste. Logistics costs increased by 2% to Rs.1098/t. Raw materials cost increased by 4% YoY to Rs.466/t on increased usage of additives.

Ultratech Cement expects to further take advantage in logistics and attractive markets with Greenfield expansion (south west MP) with cement capacity of 3.5 mtpa at total cost of ~$110/t which should be commissioned by Q4 FY19.

Consolidated capacity will augment to 95 mtpa by FY19.

On JPA acquisition: Current EBITDA/t for JPA at INR400/t, aided by state incentives some of which are expected to go away in FY18/FY19. Company is expected to incur one time brand launch expense related to JPA brand. The 4MT capacity at Bara(UP) is expected to get commissioned by FY19 end.

Valuations:

We have valued the stock using EV/EBITDA(x) and have ascribed EV/EBITDA multiple of 19(x) to its FY19E estimates & arrived at fair value of Rs. 4,453 per share. We have 'HOLD' rating on the stock.

Shares of ULTRATECH CEMENT LTD. was last trading in BSE at Rs.4178.75 as compared to the previous close of Rs. 4143.4. The total number of shares traded during the day was 11197 in over 1415 trades.

The stock hit an intraday high of Rs. 4200 and intraday low of 4142.1. The net turnover during the day was Rs. 46648191.

Source : Equity Bulls

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