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.
ICICI Direct’s research report on Birla CorporationPost 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.
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).
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