had reported more-than-double consolidated net profit at Rs 198 crore during first half (April-September) of financial year 2019-20 (H1FY20). Ebitda (earnings before interest, tax, depreciation and amortisation) margin, too, improved to 20.5 per cent from 14.3 per cent. Benefitting from healthy realisations and cost savings, the company reported an all-round good performance.
The management said cement demand would improve in H2FY20 (October-March) and expcts an additional 0.8m-1m tons from the expanded capacity in FY20. It further expects savings of Rs 20-30/ton in logistics and around Rs 100/ton in power cost from the new kiln and easing pet-coke prices.
“The company’s expansion plan is on track, and would further aid volume growth, though keeping leverage elevated. More white cement sales and input-cost softening would further boost its operating performance,” analysts at Anand Rathi Share and Stock Brokers said in company update.
The expansions and pick-up in demand, besides the anticipated better pricing situation in the northern markets
would improve the company’s performance, the brokerage firm said who has a ‘buy’ rating on the stock with a price target of Rs 1,304 per share.
Meanwhile, analysts at JM Financial Institutional Securities are factoring in 10-12 per cent volume growth in 2HFY20 primarily on completion of expansion projects. Going forward, price stability and utilisation ramp up in new capacities will be the key monitorable in a muted demand scenario, the brokerage firm said.