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

Buy GMDC; target of Rs 160: HDFC Securities

HDFC Securities is bullish on GMDC has recommended buy rating on the stock with a target price of Rs 160 in its research report dated May 15, 2017.

Buy GMDC; target of Rs 160: HDFC Securities

HDFC Securities' research report on GMDC


GMDC numbers were ahead of estimates (EBITDA: Rs 1.48bn vs est Rs 1.03bn, 2x YoY). This was driven mainly by lower mining costs (Rs 471/t, 13.5% YoY, -33.6% QoQ), partly due to Panandhro returning to production.


Outlook


Lowering of levies under GST will ensure that GMDC’s lignite remains competitive, which in turn will ensure strong demand. We have increased our volume assumptions (pg. 4). Our TP is now raised to 160 (6x FY19 EV/EBITDA vs 5x earlier).


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