The general slowdown and lockdown in Mar’20 took a toll on NCL’s Q4 performance; its revenue/EBITDA/PAT declined 9 per cent/59 per cent/71 per cent. On good demand, however, volume recovery is expected to be rapid. The WHRS expansion continues to be delayed, and the Chinese JV may be in trouble in the present circumstances. The proposed (Vishakhapatnam) expansion and (Mattapally) modernisation will keep debt high.
Investment Rationale
The brokerage expects cement volumes to dip 3 per cent in FY21 and grow 8 per cent in FY22, and EBITDA/ton to come at Rs 629/707 in FY21/22. It maintains a buy rating, at a higher target of Rs 108 based on 5 times FY22e EV/EBITDA.
Financials
On 12 per cent/14 per cent lower volumes in the cement/board divisions, revenue slipped 13 per cent/17 per cent year on year in Q4. RMC revenue dipped 8 per cent year on year. Further, on EBITDA falling 59 per cent year on year to Rs 225 million, (cement) EBITDA/ton dropped 51 per cent year on year to Rs 410 (vs. Rs 835 a year ago and Rs 353 the prior quarter) whereas the PBIT margin of the boards division dipped 459bps to 13.9 per cent.
Promoter/FII Holdings
Promoters held 42.33 per cent stake in the company as of March 31, 2020, while FIIs held 2.28 per cent, DIIs 7.53 and public and others 47.86 per cent.
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