In 3QFY2015, India Cements reported a mix set of numbers. The revenue declined marginally by 0.1% on yoy basis (8.5% sequentially) to Rs 10.35 billion, it was lower than estimate of Rs 10.85 billion. The sales volume during the quarter decline by 8% yoy basis to 2.11mt, it was lower than estimate of 2.34mt.

The volume declined due to flat demand in its key market of south region. However realisation per ton at Rs 4,917 a ton was higher than estimate of Rs 4564. Raw material expenses were in-line with our estimate at Rs 1.6 billion (15.5% of revenues).

Shrenik Gujrathi, senior Research Analyst - Cement, Angel Broking said, "However, lower than expected power, freight and other manufacturing costs improved the EBITDA margin above our estimate at 15.3% (vs. our estimate of 14.5%). EBITDA a ton came in at Rs 753 a ton as against our estimate of Rs 671 a ton.

The bottom-line reported a loss of Rs 116 million as against profit of Rs 4.2 million during same quarter last year, it was due to higher interest expenses. We maintain Buy rating on the stock with target price of Rs 146."

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