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- 28 Oct 2024
- ICICI Securities
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SLUGGISH VOLUMES AND REALISATION IMPACTED OPERATIONAL PERFORMANCE
News: Revenue declined by 7% YoY to 2560.1 crore, led by lower sales volumes (-3.7% YoY) & lower blended realisation (-3.4% YoY). Sequentially, revenue was down 8.8%, as total volumes declined 10.4% QoQ while blended realisation improved 1.8% QoQ (led by change in market mix). EBITDA/ton declined by 36.9% YoY (-34.8% QoQ) to Rs 650/ton, mainly on account of negative operating leverage and also due to maintenance of major kilns including prolonged shutdown due to excessive rains. Subsequently, EBITDA declined by 39.2% YoY (-41.6% QoQ) to Rs 284 crore. PAT was down 22.5% YoY (-26.3% QoQ) to Rs 136.2 crores. For 1HFY25, revenue is down 2.7% to Rs 5367.7 crores, due to lower blended realisation (-3.5% YoY) and muted volume growth (+0.9% YoY). H1FY25 EBITDA/ton stands at Rs 833/ton (-12.7%YoY).
Views: Operational performance remained below expectations, mainly due by lower-than-expected volumes and higher others cost. However, we believe that company’s operational performance would improve in 2HFY25, led by pick-up in demand, improvement in prices & control on costs. Volume growth is expected to be healthy in the coming period, led by ramp-up of recently added capacities and further expansions (company is in process of reaching 30mtpa capacity by FY26E from 24 mtpa at present). By FY30E, company plans to reach 50 mtpa, giving longer term growth visibility. EBITDA/ton is expected to improve substantially led by improvement in realisations and continuous focus on operational efficiencies (company targets cost savings of Rs 150-200/ton in next 2-3 years).
Impact: Negative