Reco: HOLD

CMP: Rs125

Target Price: Rs130

Realisations lower than expected

·      APAT at Rs2.14bn (-11.3% yoy ) below est of Rs2.52 bn, led by lower than expected realizations (Rs3584/t). Revenue grew 0.9%yoy- volume growth of 3.3%, realisation down 2.4% yoy 

·      EBITDA at Rs 3.14bn (-27.7%yoy, below est–Rs4.2 bn) -  EBITDA/t at Rs629 down 30%yoy, 3.3% qoq – Downgrade CY11 EPS by 10.7%. Introduce CY12 EPS at Rs9.6

·      Cement offtake improves in Jan – prices hiked Rs15-20/bag in Jan-Feb. Sustainability of cement price over medium term remains uncertain, as demand yet to see significant pick up

·      Stock down 13% in last one month – however valuations at PER of 15.6X & EV/ton of USD133 still not in comfort zone. Maintain HOLD with price target of Rs130