JSW Cement (JSWCEMENT) Q4 16/17 earnings summary

Executive summary

• FY17 marked record production, sales, consolidated EBITDA and PAT; volume reached 4.27 mtpa and EBITDA rose 29.6% YoY to ₹400.6 crore.

• Growth strategy centered on green cement, capacity expansion into eastern India, improved distribution and a target of 20 mtpa capacity in coming years.

Financial highlights

• Gross revenue was ₹1,584.48 crore, up 10.4% YoY; net revenue was ₹1,413.14 crore, up 11.1%.

• Standalone EBITDA rose 29.6% to ₹400.58 crore; PAT increased 29.6% to ₹115.65 crore, with diluted EPS of ₹2.57 versus ₹1.99.

• Consolidated EBITDA was ₹400.55 crore and PAT ₹111.46 crore, including a ₹4.15 crore share of associate loss.

• Production increased 17.5% to 4.32 mtpa; sales grew 16.3% to 4.27 mtpa. PSC sales were 2.35 mtpa and GGBS sales 1.76 mtpa.

• Other income rose to ₹91.12 crore from ₹17.80 crore, mainly due to recognition of ₹77.73 crore in government incentives for prior years; ₹2.96 crore exceptional expense related to acquisition-opportunity due diligence.

Outlook and guidance

• FY18 targets call for substantial growth in PSC and GGBS, increased market share across geographies and cement price increases to support positioning in A-category markets.

• Salboni’s 2.4 mtpa project was expected to begin commissioning in 2017; Vijayanagar expansion to 3.2 mtpa and Dolvi’s additional 1.2 mtpa capacity were also progressing.

• Longer-term ambitions include 20 mtpa capacity, presence in South, East and West zones, and subsequent expansion toward 30 mtpa and 50 mtpa.

• Cement consumption was forecast to grow at ~9% CAGR during FY17–FY20, supported by infrastructure spending, rural development and affordable housing.