Tuesday, January 19, 2010

Ultratech Cement Revenues grew 1.3% yoy (Rs16.51 bn) Target: Rs 980

Ultratech Cement Ltd.

 

Price pains


ACUMULATE

 

CMP: Rs 1,002                                     Target Price: Rs 980


Ultratech Cement Ltd (UTCL) Q3FY10 net profit at Rs1.96 bn (-17.8% yoy) is below our expectation (Rs2.34 bn), primarily on account of lower than expected cement realization.  Revenues grew 1.3% yoy (Rs16.51 bn) as benefits of 12% volume growth (5.05mt) were negated by a sharp 9% decline in blended realizations (Rs3272) (our expectation Rs3322) as UTCL's key markets of West and South faced heat of lower offtake and excess supply in the regions. Sequentially also realization fell by Rs484/ton or Rs24/bag.  EBITDA for the quarter followed the trend in realization and declined 11% yoy and 18% sequentially. Power & Fuel cost fell 39% yoy and 7% sequentially as UTCL benefited from low cost inventory of imported coal and also from its newly commissioned CPPs. To factor in the recent pricing pressure in UTCL's key markets, we are down grading our FY2010 & FY2011 earnings estimates by 4.1% (EPS Rs90.4) and 4.2% (Rs77) respectively. Ultratech stock outperformed sensex by 20% over last 3 months on the back of recent news of price hikes in western and southern region. However after the recent run up the stock looks fairly valued at  13X FY2011 earnings and USD 120 EV/ton. We would be looking to ACCUMULATE the stock at lower levels.

--
Safe Harbor:
The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.
 
You received this message because you are subscribed to the Google Groups "Investors Please Listen !" group.
To post to this group, send email to investorspleaselisten@googlegroups.com
To unsubscribe from this group, send email to
investorspleaselisten+unsubscribe@googlegroups.com For more options, visit this group at http://groups.google.com/group/investorspleaselisten?hl=en

No comments:

Blog Archive

Life Insurance | Health Insurance | Auto Insurance


Investors Please Listen !

 
More than 100 kinds of Insurance products from more than
20 companies under one roof.



Call: 9818269396 
investorspleaselisten@in.com
www.investorspleaselisten.blogspot.com

 

 

Safe Harbor:

The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.
Powered by Olark
Advertising Learn to Invest