India Cements, following the recent change in management (the first quarter after UltraTech took control), has reported an improved performance in Q4 FY25. It has reported an Ebitda of Rs 5 million (versus an estimate of an operating loss of Rs 1.2 billion) in Q4 FY25. Sales volume grew ~8% YoY to 2.6 mt (~12 above our estimate). Net loss stood at Rs 736 million (estimated loss of Rs 1.1 billion) versus a loss of Rs 435 million in Q4 FY25.
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Motilal Oswal Report
India Cements Ltd.'s operating performance has improved sequentially, led by strong volume growth, improvement in realization, and cost structure. It has shown improvement in working capital led by a reduction in loans and advances given to related parties and others. The company's net debt declined to Rs 10.8 billion in FY25 (net debt stood at Rs 8.9 billion as of Dec'24) from Rs 25.9 billion in FY24.
The company utilized proceeds from the sale of fixed assets, divestment in a few associate companies, and recoveries from loans and advances to repay debt.
We estimate the company's revenue CAGR at ~12% over FY25-27, fueled by a volume/realization CAGR of ~7%/5%. We estimate India Cements to achieve an Ebitda/tonne of Rs 310/520 in FY26/27.
We value India Cements at an enterprise value/tonne of $70 to arrive at our target price of Rs 240. Maintain Sell.
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