Moneycontrol
Feb 16, 2017 04:35 PM IST | Source: Moneycontrol.com

Buy Mangalam Cement; target of Rs 340: ICICI Direct

ICICI Direct is bullish on Mangalam Cement has recommended buy rating on the stock with a target price of Rs 340 in its research report dated February 14, 2017.

 
 
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ICICI Direct's research report on Mangalam Cement


The company sells 95% of its cement production in the north while the remaining volume is sold in the central region. The northern region witnessed robust volume growth led by an increase in infrastructure spend by the government (especially road sector) helping the company to maintain healthy utilisation.


Outlook


We expect the EBITDA margin to improve from 4.1% in FY16 to 15.1% in FY18E. At the CMP of Rs 293, the stock is trading at an attractive valuation of 6.0x FY18E EV/EBITDA and an EV/tonne of US$42. Hence we maintain BUY with a revised target price of Rs 340/share (i.e. at 7.0x FY17E EV/EBITDA and EV/tonne of US$48).

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