India Cements Q4 Review - Ebitda Inline; Debt Reduction Through The Sale Of Non Core Assets: Motilal Oswal

Motilal Oswal Report

India Cements Ltd. reported an Ebitda of Rs 469 million (estimate: Rs 475 million) in Q4 FY24. Sales volume declined ~13% YoY to 2.4 mt (12% miss). Its blended Ebitda/tonne stood at Rs 192 (versus estimated Rs 171) fueled by lower-than estimated opex/tonne.

Net loss (adjusted for profit on sale of land) stood at Rs 435 million (versus estimated Rs 489 million net loss).

Management highlighted that cement prices corrected sharply in Q4 FY24, which resulted in ~7% QoQ decline in NPR. However, sales volume improved QoQ with the infusion of working capital.

India Cements has taken initiatives at a few of its plants for plant efficiency improvement, which has started yielding positive results. Now the company intends to implement these initiatives across its plants to rationalize costs.

Further, it is continuing its efforts to dispose of non-core assets to fund plant efficiency improvements.

We retain our FY25/FY26 estimates. We reiterate our Sell rating on the stock with a target price of Rs 160 (premised on 11 times FY26E EV/Ebitda).

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