• Mayank Mehraa CFA, FRM

Heidelberg Cements- Result Review

Hold with a Short Term Target 235/-
A seasonally slow quarter for the Industry where the company has increased revenues and shown stronger profitability

Financial Highlights

➔  Reported EPS of 3.49 vs our estimates of 3 along with a 9% increase in revenues YoY

➔  The company reported its highest ever

◆  Quarterly Revenue

◆  Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

◆  Profit after Tax (PAT)

➔  Increase in raw material and fuel prices were partially

offset by lower freight & forwarding expenses.

➔  PAT Margins have improved 405bps from 9.5% to

13.6%

➔  CONTINUES TO WORK ON NET NEGATIVE WORKING

CAPITAL


Industry Highlight and Future Outlook

★  Total estimated installed cement capacity at 480 Mn T as on Jun’ 19

★  Trailing Twelve Month volume growth at 11% driven by growth in Infra and Housing

★  While the last FY ended on high utilisation of over 70% FY 20 utilisations have been low.

★  We estimate the industry to continue to grow at the current or even a higher rate owing to the

○  Stable Govt Spending in Infra

○  Planned Govt Spending on the Water

Initiatives

○  Lower Interest Rates

○  Stability of Crude


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