India Cements Q1 Review - Low Capacity Utilisation, Weak Pricing Led To An Operating Loss: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.India Cements Capital Ltd. reported an operating loss of Rs 310 million versus Ebitda estimate of Rs 288 million) in Q1 FY25. Sales volume declined ~26% YoY to 2.0 mt (13% miss). Blended realization declined 5% YoY (3% miss). Net loss (adjusted for profit on sale of grinding unit) stood at Rs 1.2 billion versus estimated Rs 543 million net loss.Management indicated that the company’s capacity utilisation was hit by the liquidity crunch on account of sustained losses in the previous quarters. The promoter and promoter group have entered into a share purchase agreement on July 28, 2024, with UltraTech Cement Ltd. to sell their entire stake at a price of Rs 390, subject to necessary regulatory approvals.Given the recent corporate development, we change our valuation method from enterprise value/Ebitda to enterprise value/tonne, as that would protect the downside despite deteriorating operating performance. We now value India Cements Capital at a replacement cost (enterprise value/tonne of $ 100) versus valuing it at 11 times FY26E EV/Ebitda earlier, and arrive at our target price of Rs 310. Reiterate 'Sell'..Click on the attachment to read the full report:.NBCC Subsidiary Bags Rs 528-Crore Contract For Hospital Equipment.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

India Cements Q1 Review - Low Capacity Utilisation, Weak Pricing Led To An Operating Loss: Motilal Oswal

The company’s operating performance was hit in the past few quarters amid volume loss, weak cement prices in its core markets, and higher production costs, says the brokerage.

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India Cements Q1 Review - Low Capacity Utilisation, Weak Pricing Led To An Operating Loss: Motilal Oswal

The company’s operating performance was hit in the past few quarters amid volume loss, weak cement prices in its core markets, and higher production costs, says the brokerage.

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