Accumulate Prism Johnson Ltd. For Target Rs.159 - Elara Capital
Cement plant shutdown, a drag
RMC: Multi-year high margin leads to EBITDA outperformance
Prism Johnson’s (PRSMJ IN) Q4 net sales dipped ~1% YoY but grew ~19% QoQ to ~INR 20bn, largely as estimated. However, EBITDA fell ~24% YoY and ~17% QoQ to ~INR 1.1bn, slightly above our estimates of ~INR 966mn, led by better-than-expected performance by the RMC division. Adjusted loss for Q4FY24 stood at INR 344mn versus a PAT of INR 69mn in Q4FY23 and a loss of INR 35mn in Q3FY24. Net debt declined to ~INR 8.4bn in FY24 versus ~INR 11.5bn in FY23.
Cement sales volume up ~4% YoY and ~27% QoQ
Sales volume grew ~4% YoY and ~27% QoQ to 1.89mn tonnes. But realization dipped ~7% YoY and ~4% QoQ to INR 4,798/tonne. Operating cost declined ~4% YoY but rose ~6% QoQ to INR 4,495/tonne. So, EBITDA/tonne fell ~36% YoY/~62% QoQ to INR 300.
TBK and RMC report QoQ margin recovery
Revenue from tiles, bathroom & kitchen (TBK) grew ~6% YoY and ~25% QoQ to ~INR 7.0bn. Consolidated sales volume for tiles rose ~6% YoY and ~27% QoQ to ~16.9mn sqm. TBK’s EBITDA margin stood at 6.1% versus 8.2% in Q4FY23 and 4.5% in Q3FY24. RMC revenue also grew ~6% YoY and ~7% QoQ to ~INR 3.9bn. EBITDA margin improved sharply to 9.2% versus 2.9% in Q4FY23 and 1.6% in Q3FY24.
Valuation: Revise to Accumulate with a lower TP of INR 159
We cut our EBITDA ~11% for FY25E and ~10% for FY26E, primarily to factor in weakness in cement prices. However, we expect Q1FY25 EBITDA/tonne for the cement business to improve as Q4 performance was depressed due to plant shutdown. Further, the TBK segment may benefit from the ramp-up in recently-added capacity and RMC from buoyant infrastructure demand and improved operational efficiency.
We roll over to March 2026E from December 2025E and thus lower our SOTP-TP to INR 159 from INR 169, valuing the cement business at 9x (unchanged) March 2026E EV/EBITDA and other businesses at 12x (unchanged) March 2026E EV/EBITDA. As PRSMJ is down ~13% since the release of our report, Bottomline still in the red, dated 1 February 2024, and given the current upside of ~7%, we revise PRSMJ to Accumulate from Reduce
Please refer disclaimer at Report
SEBI Registration number is INH000000933
