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Wednesday, August 4, 2010

ULTRATECH CEMENT LTD ; BUY

Scrip Code : 532538 / ULTRACEMCO
CMP :  Rs.857.95 ; Buy at Rs.840-850 levels
Traget : Rs. 1087
Market Cap : Rs.10,711.1 cr.
52 Week High/Low : Rs.1163.1/Rs.702.8
Total Shares : 124487079 shares; Promoters - 68193101 shares - 54.78%
Book Value : Rs.370.05 ; Face Value - Rs.10; EPS - Rs.73.76;
Enterprise Value : Rs.989.31 per share ;

UltraTech ‘s results for Q1FY11 net realisation declined 4.9% due to its substantial exposure 33% to southern region which was affected by lower off take and shortage of wagons.
The increase in operating expenditure resulted in 1371 basis points YOY decline in operating margins to 23.5% (37.2%) , Going ahead, UltraTech will benefit from its Samruddhi merger % will not face comparatively lower pricing pressure. Post merger UltraTech will have aggregate capacity of 49 million tonne of cement production.. Ultra Tech’s net sales declined 8.1% YOY because of 3.6% decline in dispatches to 5.12 million tonnes. Power cost increased due to higher open market power purchase & reduced coal supply through linkages.
The incorporated post merger number of UltraTech will be 45.3% CAGR in top line over FY10-12 by higher volumes. At current level the stock is trading at an EV/EBITDA of 6.7 times & EV per tonne of $94 on FY 12 estimates.

At an average target of EV/EBITDA of 7 times Ultra Tech’s fair value comes at Rs.1087.

Samruddhi Cements
Share capital (Eq + Prf) – Rs.85 cr
Share Capital Suspense – Rs.45.84 cr.
Reserves & Surplus – Rs.4452.56 cr.
Total Assets – Rs.8562.49 cr.
Total Liabilities – Rs.5217.73 cr.
Investments (Eq) – Rs.4.43 cr.
Investments (Bonds/Mutual Fund) – Rs. 1234.11 cr.
Turnover – Rs.4290.63 cr.
PBT – Rs.941.99 cr.
PAT – Rs.617.96 cr.

UltraTech Cement
Share capital (Eq + Prf) – Rs.124.49 cr
Reserves & Surplus – Rs.4482.17 cr.
Total Assets – Rs.6673.44 cr.
Total Liabilities – Rs.3736.33 cr.
Investments (Eq) – Rs.21.07 cr.
Investments (Bonds/Mutual Fund) – Rs. 1616.68 cr.
Turnover – Rs.7049.68 cr.
PBT – Rs.1588.16 cr.
PAT – Rs.1093.24 cr.

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