Prabhudas Lilladher’s research report on Heidelberg Semen India
Heidelberg Cement (Heim) reported a weak q1fy23 income set with a miss 18%/7% for our estimates/consensus (CE). EBITDA decreased 27% yoy to RS951MN (PLE: RS1.16BN, CE: RS1.02bn). Realization came above our estimates. However, the increase is steeper than expected in costs and decreased volume more than weakening all increases in realization. We cut our EBITDA estimation for FY23E by 12%, mostly due to lower margins. EBITDA/EPS HEIM grows on CAGR 9%/24% of FY17-FY22, mainly led by the revival of prices with consolidation in the central region. EBITDA/T grows in CAGR 7.5% while the volume grows only 1.3% due to capacity constraints and focus on the nearest market. Strong prices in this region have drawn a significant surge in volume from other regions. Increased supply due to the flow of entry from other regions and new capacity to come to keep the margin below the check.
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