Dec 01, 2016 01:32 PM IST IST | Source: Moneycontrol.com

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.


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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