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Target: ₹205
CMP: ₹181.85
Heidelberg’s (HCIL) Q1-FY23 revenue at ₹590 crore (+6.1 per cent y-o-y/-4.9 per cent q-o-q) were marginally below our/consensus estimates by 4.0 per cent/3.1 per cent amidst lower volumes and better realisations. The calibrated emphasis over higher realisations and intensified competitiveness in operating region continue to weigh on the volume growth.
EBITDA plunged sharply by 27.5 per cent year-on-year/19.8 per cent q-o-q to ₹95 crore as the fuel/RM cost expanded by 56.3 per cent/2.8 per cent year-on-year. Despite being a challenging business environment, HCIL operated at utilisation levels of 72 per cent in Q1-FY23 vs 76 per cent Q4-FY22.
The management has maintained its capex guidance of ₹100 crore for FY23 and similar in FY24 (about ₹80 crore). The company has debt of ₹230 crore as of June-end and aims to repay ₹33.6 crore by FY23-end.
The green power contribution to overall power sourcing rose to 30 per cent (vs 22 per cent FY22) as the company started receiving power from 15-MW solar contract under long-term agreement. HCIL is committed to further amplify the green energy contribution to 35-40 per cent by FY25.
The intensified competition due to new entrants and lack of capacity addition by HCIL restricts the market share gains in near future.
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