Indocement Tunggal Prakarsa (INTP.IJ Rp 4,800; BUY TP Rp 8,500) FY24 Earnings Beat, but Remain Cautiously Optimistic in FY25

Stock Code	Last Price	Change	Change %
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INCO	3,050	210	7.39%
TPIA	9,200	175	1.94%
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PGEO	1,215	135	12.50%
INDF	8,225	125	1.54%
INTP	5,325	125	2.40%

Indocement Tunggal Prakarsa (INTP)

FY24 Earnings Beat, but Remain Cautiously Optimistic in FY25

INTP recorded net profit of Rp2tr in FY24 (+3% yoy, 125% of ours/cons, or above), due to strong EBIT and higher associate income.
We reaffirm 1%-2% vol growth and ASP assumption for FY25F/FY26F, yet we expect higher RDF usage on Grobogan to lower energy cost.
We lifted our FY25F/26F EPS by 17%/16% due to opex saving. Reiterate Buy rating with lower TP (Rp8,500) due to our lower LT growth assumption.

Strong FY24 Result due to Good Opex Management

INTP recorded a net profit of Rp2tr in FY24 (+3% yoy, 125% of ours/cons, or above), with 4Q24 net profit expanding by 53% qoq. This was due to strong operating income and higher associate income (+467% yoy) in FY24 from land sales (~Rp117bn). Meanwhile, revenue grew by 3% yoy in FY24 (100%/99% from ours/cons, or inline), with 4Q24 revenue growing by 0.6% qoq. Using ASI data, ASP reached Rp969k/t (+2.5% yoy), with 4Q24 ASP at Rp866k/t (+0.3% qoq). The main driver of upbeat performance was derived from the EBIT level, which reached Rp2.4tr in FY24 (+5% yoy, 116%/118% of our/cons, above), with strong 4Q24 EBIT growth of 26% qoq. Cash cost per ton declined by 5% yoy to Rp843k/t in FY24, driven by lower energy cost (-7% yoy) and delivery cost (-8% yoy).

Stable pricing until Feb25. Cautiously optimistic in FY25F-FY26F

We reaffirm our 1.5%/2% vol growth and 1.3%/1.5% ASP growth for FY25F/FY26F, given: 1) declining infra budget; 2) lower vol growth vs GDP growth limits upside on ASP, as we expect occasional price cuts during certain months. As of Mar25, we observed relatively stable bag pricing, with Merdeka/Jempolan recording -1.5%/-2% ytd price reduction, yet their discount to the main brand is at 26%/28% (smaller than the peak at 29%/32% in Sep/Oct-24). However, we expect upside from Grobogan cost savings, especially from rising RDF usage from ~1% in FY24 to ~8% in 1H25F and ~20% in 2H25F. INTP stated that energy cost savings from RDF usage are quite significant vs coal, despite the currently low coal price. As a result, we expect energy cost per ton to decline by 4%/2% in FY25F/FY26F vs -7% in FY24.

Upgrading our EBIT assumption. Maintain Buy rating with TP of Rp8,500

Due to our cost savings assumption, we upgrade our FY25F/26F EBIT forecast by 14%/13% and net profit by 17%/16%, implying an EBIT margin of 14.2%/14.7% and EPS growth of 8.4%/7.6% yoy. We reiterate our Buy rating and our preference for the cement sector on INTP, yet with a slightly lower TP of Rp8,500 (-3%) as we lowered our LT growth assumption to 1% (from 1.5%). INTP is currently trading at an EV/EBITDA of 4.5x and EV/t of US$56.3, which are respectively at -1 and -1.5 std dev of its 5-year mean. Downside risks to our view: 1) Price war; 2) Slower progress on private and under-construction projects.

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