HeidelbergCement India Ltd Research ReportQ4

Realisations upbeat; capacity constraints still persist Heidelberg Cement reported a mixed set of numbers with the topline missing our estimates but EBITDA, PAT broadly coming in line despite witnessing volume de-growth vs. our estimates. Revenues increased 1.8% YoY to | 534.7 crore (below I-direct estimate of | 561.7 crore). The revenue growth was driven by 6.7% growth in realisation to | 4415/t (above I-direct estimate of | 4,337/t) while volume came in at 1.21 MT (vs. I-direct estimate of 1.3 MT), posting 4.6% YoY de-growth. On the margin front, EBITDA margins remained flat YoY and expanded ~80 bps QOQ to 21.7% (vs. Idirect estimate of 21.2%) supported by strong realisations growth. On an absolute level, EBITDA was at | 116.2 crore, increasing 1.7% YoY (vs. I-direct estimate of | 119.3 crore. Adjusted PAT increased 18% YoY from | 51.6 crore to | 60.9 crore (vs. I-direct estimate of | 59 crore) in Q4FY19, mainly by higher other income (up 81% YoY to 20.2%). Capacity bottlenecks to be addressed for short-term only For FY19, Heidelberg clocked volume growth of 5.4% YoY to 4.9 MT and ended the year with capacity utilisation of 91%, thereby leaving very low room for growth. Since the clinker unit operated at 85% utilisation, the company would be undertaking expansion of its grinding capacity at Damoh unit in MP by 0.5 MT going ahead.