India Cements is rated to ‘buy stocks’ at currently traded price at Rs.85. Checkout the target stock price.
- 1QFY13 results surprised positively with EBITDA at Rs.280 crore, beating market expectations.
- Recurring PAT at Rs.90.8 crore has also been ahead of market estimates.
- Tax rate at 36% was higher than expected. Exceptional items of Rs.45 crore were on account of IPL franchisee and forex related losses.
- Average sales price at Rs.4460/ton surprised positively and increased 5% qoq. Sales volume at 2.4 million tons missed market estimates by 1%.
- Operating costs at Rs.3432/ton was in line but EBITDA/ton at Rs.1043 has beaten market estimates.
- Revenue and EBITDA of other businesses were at Rs.138.5 crore and Rs.32.8 crore respectively.
- Company has reiterated its guidance on timeline for the commissioning of 50MW CPP (captive power plant) in Andhra Pradesh and Indonesian coal mines by FY13 end.
- It seems that the recent talk in the market regarding mergers and acquisitions in the sector is positive to mid-cap players like India Cements as it sets a floor for their valuation and future transactions in the sector.
- Currently, the stock trades at an EV/ton of USD 69, which is at a 51% discount to its current replacement cost of USD140/ton, according to analysts’ estimates.
India Cements is rated to ‘buy stocks’ with a target price of Rs.102 over one year.
