- 25 Apr 2024
- ICICI Securities
Operational performance impacted due to lower realization
DALBHARAT - 1796 Change: 4.95 (0.28 %)News: Revenue increased by 10% YoY (+19.5% QoQ) to Rs 4307 crore, mainly led by 18.5% YoY (+29.3% QoQ) growth in cement sales volumes to 8.8 million tonnes (mtpa). However, net realization declined by 7.4% YoY (-7.6% QoQ) to Rs 5097/ton which partially negated the impact of strong volume growth. EBITDA declined by 7.8% YoY (-16% QoQ) to Rs 654 crore as margins contracted significantly on both YoY and QoQ basis, due to lower realizations. EBITDA/ton stood at Rs 743/ton (-22% YoY, -34.8% QoQ). Total cost/ton remained lower (-4.1% YoY, flat QoQ) led by lower power & fuel cost. PAT declined 47.5% YoY to Rs 320 crore. For FY24, revenue is up 8.4% YoY as volume growth of 11.8% YoY was partially negated by lower realizations (-3.2% YoY). FY24 EBITDA/ton stands at Rs 917/ton (vs Rs 904/ton in FY23), mainly led by lower power & fuel cost.
Views: EBITDA/ton at Rs 743/ton during the quarter (vs 955/ton in Q4FY23 and Rs 1140/ton in Q3FY24) was below expectations on account of lower than expected realizations. However, volume growth remained strong at 18.5% YoY and came in-line with expectations. Total cost/ton remains lower YoY led by lower power & fuel cost (on lower pet-coke prices and increase in green power share). Going ahead, we expect strong volume growth trend to continue led by aggressive capacity additions (8.7 mtpa capacity added in last 2 years) and improvement in capacity utilization. Company is in process of further increasing its capacity to 49.5 mtpa by FY25E (from 44.6 mtpa at present) and targets to reach 75 mtpa by FY27E (as the acquisition of 9.4 mtpa capacity from Jaypee is in process). We also expect realization to pick-up in coming quarters led by recent cement price hikes. Moreover, lower fuel prices, focus on increasing share of green power & alternative fuels and positive operating leverage would help company in improving margins in coming periods.
Impact: Negative