ICICI Securities Limited Everest Kanto Cylinders (EVEKAN)

ICICI Securities Limited
Exceptionally higher realization in Q2FY11 was on the back of
special order received from the Indian Navy. The overall volume
growth of the company has however been maintained.
Demand from India and USA has declined, however, the demand
growth in UAE (Dubai) and China has been robust projecting a
brighter picture for the demand from these countries, going
ahead.
Though sales volume from India has improved, dip in realizations
have pulled down the overall sales. However, the realizations from
Dubai witnessed considerable improvement.
With crude prices inching up to $90/barrel from
$75/barrel in February, 2010; we believe the demand for
CNG cylinders would remain firm. Also, with
environmental concerns been targeted by governments
all across the world, the demand for CNG cylinders
would continue to grow in the coming years.
ICICIdirect.com | Equity Research
Exhibit 2: Sales Volume and average realization (quarterly)
in 1000's
240
220
200
180
160
140
120
100
8859
10084
9349
7534
10318
9024
164 168 140 121 204 216
Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11
Source: Company, ICICIdirect.com Research
Exhibit 3: Geographical break-up of Sales (| crore)
Volumes (LHS) Avg Relization (RHS)
12000
10000
8000
6000
|/cylinder
Q3FY11 Q3FY10
India 80.58 100.76
Dubai 78 34.09
China 15.36 3.5
USA & Hungary
Source: Company, ICICIdirect.com Research
28.32 35.93
Exhibit 4: Quarterly Volumes and Realization from different countries
Volumes (units)
Realisation/cylinder (|)
Q3FY11 Q2FY11 Q3FY11 Q2FY11
India 140518 136664 5650 8528
Dubai 50901 51404 14120 12900
China 24202 17524 6344 6970
USA (Jumbo) 396 195 715000 854000
Source: Company, ICICIdirect.com Research
Exhibit 5: Crude Prices
$/barrel
100
95
90
85
80
75
70
65
Feb-10
Mar-10
Apr-10
May-10
Source: Bloomberg, ICICIdirect.com Research
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
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90.84
Feb-11