Cement companies had reported subdued profit growth in the previous quarters. But experts say that they may not disappoint in September quarter. Cement companies are anticipated to post a healthy 35 per cent year-on-year growth in EBITDA per ton led by robust cement prices as well as strong inventories of low-cost fuel.
However, an extended monsoon season may have impaired the demand during the quarter, with core industry data unveiling a quiet 2.3 per cent year-on-year volume growth during July-August 2016.
Experts are of the view that North India-based players such as JK Cement, JK Lakshmi Cement and Shree Cement will carry on to report stronger earnings growth as compared with the pan-Indian players, even as South-based players are expected to bear the impact of weak price trajectory.
Cement stocks have surged over the past few months on rising cement prices and higher usage of pet-coke in the overall fuel mix. Midcap and smallcap cement stocks such as Dalmia Bharat, Kakatiya Cement, India Cement, Deccan Cement, Shiva Cement, Udaipur Cement, Sagar Cement, and GPT Infraproject have more than doubled investor wealth in last one year.
A good monsoon after two years of drought, however, may lead to a boost in rural demand and provide a good base for the second half of Financial Year 2017. Higher budget allocation to cement-intensive sectors and the rural economy may present good growth visibility during the second half of FY17.
ACC: ACC share price trades at 19.9 times CY17E EPS, 11.4 times CY17E EV/EBITDA and FY17E EV/ton of $125 per ton. Dispatches in third quarter of the Calendar Year 2016 are projected at 5.33mt which is 5 per cent lower on the yearly basis. Average realizations are anticipated to remain flat Quarter on Quarter which will be 1.9 per cent lower in Year on Year basis at Rs 4,267 per ton.
According to the estimates of experts, revenues will likely de-grow 7 per cent YoY to Rs 2,550 crore. EBITDA margin is projected to be 12.1 per cent. The net profit is likely to rise by 29.3 per cent on a year-on-year basis to Rs 153 crore. ACC is the top 500 pick for the quarter by Dynamic Levels.
Ambuja Cements: Ambuja Cements share price trades at 17.8 times CY17E EPS, 12.8 times EV/Ebitda and CY17E EV per ton of $172 per ton. Net profit will probably witness a growth of 33.5 per cent on a year-on-year basis to Rs 205.1 crore for the second quarter ended September 30.
Dispatches in third quarter of CY16 are projected to decline 5.1 per cent Year on Year to 4.65mt. Average realizations are anticipated to improve 2.7 per cent YoY which is 1.2 per cent more Quarter on Quarter to Rs 4,394 per ton. Revenue is estimated at Rs 2,040 crore 2.5 per cent over on the YoY basis. Ambuja Cement is among the top 500 best performing stocks picked by Dynamic Levels for the quarter.
Grasim Industries: Grasim share price trades at 10.2 times FY18E consolidated EPS, 6.7 times FY18E EV/EBITDA and implied cement EV/ton of $124 per ton. Net profit is expected to grow by 8 per cent to Rs 386.80 crore for the second quarter ended September 30.
Analysts expect VSF volumes to grow 18 per cent on the yearly basis which is over 6 per cent on the quarterly basis to 128,421 ton in second quarter of the Financial Year 2017. The realizations are expected to improve 8.9 per cent YoY, 0.8 per cent lower on the QoQ, to Rs 127,039 per ton. Grasim is among the top 500 picks for the quarter identified by Dynamic Levels.
India Cements: India Cements share price trades at 16.9 times FY18E EPS and 8 times FY18E EBITDA. Net profit will probably grow 12 per cent on a YoY basis to Rs 49.3 crore for the quarter ended September 30.
India Cements’ sales volumes are expected to grow 16 per cent YoY 8 per cent lower on the QoQ basis to 2.51 mt in second quarter of FY17. The realizations are estimated to de-grow 6 per cent YoY, 2.2 per cent higher on the quarterly basis to Rs 4,605 per ton. Revenue is projected at Rs 1,170 crore which is 9 per cent higher in the YoY basis and 12 per cent higher on the QoQ basis. India Cement is also identified among the top 500 performing shares for the quarter by the Dynamic Levels.
Ramco Cements: Ramco Cement share price traded at the new lifetime high today on October 14, 2016. The stock trades at 19.3 times FY18E EPS, 11.2 times EV/EBITDA and FY18E EV/ton of $141. Net profit is likely to rise by 13.7 per cent on the yearly basis to Rs 157.7 crore for the quarter ended September 30.
The Second Quarter volumes for the Financial Year 2017 are estimated to grow 15 per cent YoY, but 5 per cent QoQ to 1.97mt. Average realizations are expected to decrease 9.5 per cent YoY which is 2.8 per cent higher QoQ to Rs 4,551 per ton. Ramco Cement is the Multibagger stock for the month picked by Dynamic Levels.
Shree Cement: Valuations of Shree Cement share price stand at 24.3 times FY18E EPS, 14.6 times FY18E EBITDA and FY18E EV/ton at $275/ton. The Net profit is seen to rise by 187 per cent on a Yearly basis to Rs 376 crore. The Q2 of FY17 cement volumes is expected to grow 8.2 per cent YoY, 12 per cent lower QoQ to 4.53mt, including clinker. The realizations are expected to grow 8.7 per cent YoY, 2 per cent higher QoQ to Rs 3,962 per ton. Shree Cements is the Multibagger pick for the quarter by Dynamic Levels.
UltraTech Cements: UltraTech Cements is the top 500 pick by Dynamic levels trades at 23.3 times FY18E EPS, 12.7 times FY18E EV/EBITDA and FY18E EV/ton of $216. The net profit is expected to climb by 38 per cent on a YoY basis to Rs 543 crore for the quarter ended September 30.
The Second Quarter of FY17 is expected to witness de-growth of cement volumes by 2.4 per cent YoY (-18 per cent QoQ) to 10.54mt. Realizations are projected to de-grow 3.4 per cent YoY (+1.2 per cent QoQ) to Rs 4,133 per tonne.
No comments:
Post a Comment