Thursday, 13 November 2008

Hold India Cements: PINC Research

PINC Research has recommended a hold rating on India Cements, in its November 11, 2008 report. "At the CMP of Rs 85, ICL is trading at a P/E of 3.7x, EV/EBIDTA of 2.3x and EV/mt of USD59 its FY10E earnings. Due to delays in capacity expansion we estimate despatch volumes of 10.1mn mt in FY09E and 12.6mn mt FY10E. We expect realisations to come under pressure due to sedate demand growth in FY10E. While operating cost could ease, we anticipate the same to set in with a lag of 2-3 months, post the easing in realisations. We have revised downwards our revenue estimates to Rs 36.2 billion and Rs 44.7 billion for FY09E and FY10E and cut our profit estimates to Rs 5.7 billion and Rs 6.8 billion respectively, after factoring exceptional items and higher depreciation. Despite the significant correction in ICL’s share price from its historical highs, the CMP discounts the fundamentals of the stock adequately. Hence, we maintain our 'HOLD' recommendation and will revisit the same in the coming quarters," says PINC's research report.

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Source: Moneycontrol

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