Sanghi Industries Results Review

Sanghi Industries has faxed us its results and here is the review from our analyst.

Top-line growth led by higher volumes. Average realizations increased 7.4% qoq (and 16.6% yoy) to Rs3,482 a ton. Aggregate volumes for the quarter, at 0.7m tons were up 14% qoq, though they dipped 20% yoy. Net sales, at Rs2.45bn, came in above our expectations of Rs2.09bn. Higher realizations help margin improvement. EBITDA per ton improved to Rs1,148, compared to ~Rs839 in 3Q08 (~Rs 1,310 in 4Q07). Better realizations and robust volume growth boosted EBITDA growth qoq. OPM rose 710bp qoq on the back of higher realizations.

Export Ban to impact average realizations. Sanghi exported ~35% of its sales volumes in FY08 and a ban on exports will impact it unless its able to sell the same volumes in domestic market without taking any price cuts.