Add Prism Johnson, target price Rs 123: ICICI Securities

ICICI Securities has add call on Prism Johnson with a target price of Rs 123. The current market price of Prism Johnson Ltd. is Rs 106.3. Time period given by analyst is one year when Prism Johnson Ltd. price can reach defined target.

Prism Johnson Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 5209.74 Crore) operating in Cement sector.

Prism Johnson Ltd. key Products/Revenue Segments include Cement, Sale of services, Other Operating Revenue, Scrap and Export Incentives for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 1866.74 Crore, up 13.31 % from last quarter Total Income of Rs 1647.42 Crore and up .23 % from last year same quarter Total Income of Rs 1862.48 Crore. Company reported net profit after tax of Rs 16.39 Crore in latest quarter.

Investment Rationale
Prism Johnson’s (PRSMJ) Q4FY22 standalone EBITDA declined 39% YoY to Rs1.48bn, marginally above consensus estimates owing to better performance in TBK division. Cement volumes (including clinker) were down 25% YoY while EBITDA/te fell by a hefty 53% YoY to Rs408/te owing to higher input costs. TBK division’s performance was better with revenues rising 12% YoY and EBITDA margin at 12.4% (down only 20bps YoY / 30bps QoQ). PRSMJ plans to add greenfield grinding capacity of 2mnte in eastern UP by Dec’24 and 5.5msm p.a. tile capacity in West Bengal by Jun’23. Factoring-in higher cost escalation, it cuts FY23E-FY24E EBITDA by 15-27% and reduces target price to Rs123/sh based on 8x Mar’24E EV/E (earlier: Rs151/sh). It maintains ADD. Key risks: lower demand / pricing, and sharp cost escalations.

Promoter/FII Holdings
Promoters held 74.87 per cent stake in the company as of 31-Mar-2022, while FIIs owned 3.29 per cent, DIIs 6.22 per cent.