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Recommendations India

UltraTech Cement 4QFY2014 performance highlights and results update

April 29, 2014, Tuesday, 10:24 GMT | 06:24 EST | 14:54 IST | 17:24 SGT
Contributed by Angel Broking

For 4QFY2014 UltraTech Cement (UltraTech) posted a 15.4% yoy increase in its bottom-line to Rs.838cr, aided by a reasonably strong operational performance.

OPM healthy at 21.3%: For 4QFY2014 UltraTech’s top-line rose by 8.2% yoy to Rs.5,832cr, aided by a 9% increase in cement and clinker sales volume to 12.2mn tonne. The sale volumes of white cement and wall care putty rose by 12.7% yoy to 0.33mn tonne. Blended realizations fell by 1.2% yoy to Rs.4,662/tonne. The OPM fell by 200bp yoy to 21.3% on account of lower realizations and increase in costs such as that of raw material, power and fuel and freight. The bottom-line rose by 15.4% yoy to Rs.838cr, aided by reversal of excess tax provision of Rs.96cr related to previous years. The bottom-line performance was also boosted by higher other operating income of Rs.128cr (vs Rs.83cr in 4QFY2013).

Outlook and valuation: We expect UltraTech to post a 14.4% CAGR in its top-line over FY2014-16. The company’s bottom-line is expected to grow at a CAGR of 13.6% yoy over the same period. At the current levels, the stock is trading at an EV/tonne of US$145 on FY2016E capacity. We continue to remain Neutral on the stock.