Motilal Oswal is bullish on Rain Industries has recommended Buy rating on the stock with a target price of Rs 362 in its research report dated November 01, 2017.
Motilal Oswal's research report on Rain Industries
Rain Industries (RAIN) is the second largest carbon product supplier to the aluminum industry. Its carbon segment contributes 80% to consolidated EBITDA. Its chemicals segment converts coal tar distillates into resins, modifiers, aromatic chemicals, superplasticizers, etc. It also operates a 3.5mt cement plant in southern India and sells cement under the Priya brand. RAIN is riding tailwinds, triggered by supply disruption in China, which are driving margins and volume growth. We expect these tailwinds to last for 2-3 years, enabling EBITDA/PAT CAGR of 24%/50% over CY16-19. RAIN has been generating strong FCF and rewarding shareholders with dividends and buybacks. We believe it will continue to do so.
The stock has been re-rated on change in business dynamics. Yet, our price target of INR362 indicates 33% upside. We initiate coverage with Buy.
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