Prabhudas assigns outperformer to Shree Cement
Prabhudas Lilladher has reiterated 'outperformer' rating on Shree Cement with a target price of Rs 700, an upside of 36.6 per cent from the current level.
By Agencies |
MUMBAI: Prabhudas Lilladher has reiterated 'outperformer' rating on Shree Cement with a target price of Rs 700, an upside of 36.6 per cent from the current level.
The company has reported pre-exceptional profit after tax of Rs 116 crore for the quarter in line with the brokerage expectation. Net sales grew by 39.3 per cent, led by volume growth of 33.6 per cent and rise of 4.2 per cent in realisation.
EBITDA rose by 15.5 per cent ahead of the brokerage expectation of 14.5 per cent on back of better than expected sales volume. EBITDA per tonne declined by 13.6 per cent year on year to Rs 1,097, impacted by sharp rise in power and fuel cost.
The company has announced expansion of clinker capacity by 1mtpa (Unit-VI) at Ras, Rajasthan along with associated split grinding capacity at a total outlay of Rs 300 crore. It is expected to be commissioned by the end of Apr-Dec 200910. In addition to this, the company is adding waste heat recovery-based power plant of 10MW capacity at Ras with an outlay of Rs 55 crore, and it is expected to begin operation by end of 2008-09.
The company���s Apr-Dec 2008-09 performances reflects hardening pet coke prices and its inability of raising prices in tandem with the rise in input prices. Prabhudas maintains that existing sector dynamics in the region won���t allow companies to raise prices. However, the recent softening of pet coke prices would aid the company in containing pressure witnessed during the quarter.
At market price, the stock trades at EV/EBITDA of 2.1x and 1.9x FY09E and FY10E EBITDA respectively, while
The company has reported pre-exceptional profit after tax of Rs 116 crore for the quarter in line with the brokerage expectation. Net sales grew by 39.3 per cent, led by volume growth of 33.6 per cent and rise of 4.2 per cent in realisation.
EBITDA rose by 15.5 per cent ahead of the brokerage expectation of 14.5 per cent on back of better than expected sales volume. EBITDA per tonne declined by 13.6 per cent year on year to Rs 1,097, impacted by sharp rise in power and fuel cost.
The company has announced expansion of clinker capacity by 1mtpa (Unit-VI) at Ras, Rajasthan along with associated split grinding capacity at a total outlay of Rs 300 crore. It is expected to be commissioned by the end of Apr-Dec 200910. In addition to this, the company is adding waste heat recovery-based power plant of 10MW capacity at Ras with an outlay of Rs 55 crore, and it is expected to begin operation by end of 2008-09.
The company���s Apr-Dec 2008-09 performances reflects hardening pet coke prices and its inability of raising prices in tandem with the rise in input prices. Prabhudas maintains that existing sector dynamics in the region won���t allow companies to raise prices. However, the recent softening of pet coke prices would aid the company in containing pressure witnessed during the quarter.
At market price, the stock trades at EV/EBITDA of 2.1x and 1.9x FY09E and FY10E EBITDA respectively, while
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on EV/tonne, it trades at US$43x and US$32x FY09E and FY10E capacity respectively.Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
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