Dec 01, 2016 01:32 PM IST | Source:

Buy ITD Cementation; target of Rs 158: Axis Direct

Axis Direct is bullish on ITD Cementation has recommended buy rating on the stock with a target price of Rs 158 in its research report dated November 24, 2016.

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Axis Direct's research report on ITD Cementation

ITD Cementation (ITD) in its 3QCY16 posted revenue of Rs. 483 cr, declined by 29.8% YoY basis on account of slower than expected project execution and delay in commissioning of couple of projects. However, EBITDA margin expanded by 330 bps to 9.5% on account of change in project mix in favour of high margin projects (share of legacy orders declined to less than 5% of the overall Order Book) and lower loss from JV. Net profit for the quarter came at Rs. 6.9 cr registering growth of 64.2% YoY.

Given strong order book, presence in niche vertical like Marine and reduction in low margin orders, we expect ITD’s EBITDA to grow at CAGR of 14% over CY15-17E. With risk free business model (pure EPC player) and strong parent support we maintain BUY with Target Price of Rs. 158 (13% upside from current level of Rs. 140).

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