ICICI Direct is bullish on Mangalam Cement has recommended buy rating on the stock with a target price of Rs 425 in its research report dated May 16, 2017.
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.
At the CMP of Rs 349, the stock is trading at an attractive valuation of 6.0x FY19E EV/EBITDA and an EV/tonne of US$46. Hence, we maintain BUY recommendation with a revised target price of Rs 425/share (i.e. at 7.0x FY19E EV/EBITDA and EV/tonne of US$55).
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