Moneycontrol
Jul 14, 2017 04:17 PM IST | Source: Moneycontrol.com

Buy Birla Corporation; target of Rs 1100: ICICI Direct

ICICI Direct has recommended buy rating on Birla Corporation with a target price of Rs 1100 in its research report dated July 13, 2017.

Buy Birla Corporation; target of Rs 1100: ICICI Direct

ICICI Direct’s research report on Birla Corporation

Post acquisition of  Reliance Cement the company’s total  capacity has increased to 15.5 MT from 10 MT placing Birla  Corporation (Birla Corp) in the league of large cement players .  In  FY17, Birla Corp registered 75.3% YoY increase in EBITDA/t to | 620/t  from 353/t in FY16 mainly led by healthy EBITDA/t of acquired  Reliance Cement assets of | 1, 137 /t (driven by incentives in MP and  UP) . Going forward, we expect the above tre nd to continue leading to  14.0% CAGR in EBITDA/t to | 810  in FY17 - 19E.

Outlook


We  have a BUY recommendation on  the stock with a target price of | 1,100 - 1,150 (valuing at 12x FY19E  EV/EBITDA, $130/ tonne on capacity of 15.5 MT).


For all recommendations report, click here


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