bottom-line performance on the front (by 55.7% yoy), driven by a
outstanding performance by its VSF business. The VSF division are posted
highest ever volume of 81,300 MT and also recorded an OPM of 41.8%,
resulting in a 536% increase in operating profit Rs403.7cr (Rs63.5cr). The
cement business clocked a healthy 19% growth in operating profit, on
account of higher volumes and lower energy prices. The company net profit
grew by 55.7% to Rs715.5cr (Rs459.6cr) during the quarter. After the results,
We have revised our EPS estimates for FY2010E up from Rs309 to Rs336.
The stock trades at a P / E of 7.9x and an EV / EBITDA of 4.5x, according
its FY2012E estimates. We upgrade the stock to accumulate from Neutral
Stellar performance in the VSF business drives bottom-line growth: During
3QFY2010, the VSF's Top-line business grew by 71% to Rs962.4cr
(Rs563.9cr), helped by a 51% growth in revenue and a 13% growth in
realization of Rs109, 600 per tonne. The cement's top-line business grew
7% to RS3, 635cr. Grasim reported a robust 44% growth in operating profit
RS1, 440cr, while net profit rose 55.7% to Rs715.5cr (Rs459.6cr).
3QFY2010, the VSF's Top-line business grew by 71% to Rs962.4cr
(Rs563.9cr), helped by a 51% growth in revenue and a 13% growth in
realization of Rs109, 600 per tonne. The cement's top-line business grew
7% to RS3, 635cr. Grasim reported a robust 44% growth in operating profit
RS1, 440cr, while net profit rose 55.7% to Rs715.5cr (Rs459.6cr).
Outlook and Valuation: The stock trades at a P / E of 7.9x and a
EV / EBITDA of 4.5x, in its FY2012E estimates. We appreciated the
60.3% stake in Ultra Tech company (after splitting Samruddhi) on a
an average of EV / tonne of U.S. $ 105/Tonne and an EV / EBITDA of 6.5x
FY2012E, after deduction of 15% holding company discount to arrive at a value
of RS1, 670/share. We arrived at a value of Rs623/share for Grasim
direct shareholder participation in Ultratech (after split). We appreciated the
VSF business at 5x EV / EBITDA, which is a P / BV of 1.75x on a FY2012E
basis. Hence our SOTP fair value for Grasim working on RS2, 861. We
an upgrade of the building stock to Neutral
EV / EBITDA of 4.5x, in its FY2012E estimates. We appreciated the
60.3% stake in Ultra Tech company (after splitting Samruddhi) on a
an average of EV / tonne of U.S. $ 105/Tonne and an EV / EBITDA of 6.5x
FY2012E, after deduction of 15% holding company discount to arrive at a value
of RS1, 670/share. We arrived at a value of Rs623/share for Grasim
direct shareholder participation in Ultratech (after split). We appreciated the
VSF business at 5x EV / EBITDA, which is a P / BV of 1.75x on a FY2012E
basis. Hence our SOTP fair value for Grasim working on RS2, 861. We
an upgrade of the building stock to Neutral
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