- 22 Jul 2022
- ICICIdirect Research
Posted healthy performance for Q1FY23
RKFORGE - 968 Change: 3.45 (0.36 %)News: Consolidated sales for Q1FY23 stood at Rs699 crores down 3% QoQ with EBITDA coming at Rs150 crores up 1.6% QoQ with margins at 21.4% up 90 bps QoQ. Consequently, PBT stood at Rs77 crores vs. Rs 75 crores in Q4FY22. Total tonnage for the quarter came in at 30,496 tonne, down 5% QoQ while EBITDA/tonne stood at Rs49,169/tonne (vs. Rs 46,070/tonne in Q4FY22).
Views: Company’s quarterly performance was in tandem with our annual estimates for FY23E. Positive surprise however from the quarterly results was expansion in gross margin to the tune of ~350 bps QoQ, partially mitigated by higher other overhead costs with resultant expansion in EBITDA margins placed at 90 bps QoQ. Management commentary on demand remains strong with continued focus towards debt reduction in coming 3 years. With defined capital allocation strategy, higher double digit return ratios (15-20%) and inexpensive valuations (<10 PE on FY24E basis) we remain positive on the stock.
Impact: Positive