Jaypee Capital Services has recommended hold rating on Mangalam Cement , in its August 23, 2010 research report.
"Mangalam Cement is increasing its power generating capacity by 17.5mw by Dec'2010. Post expansion, MCL's total capacity would reach 35mw. The company needs 25mw to meet its 100% power requirement. The surplus power generated from CPPs would be use for merchant sale, generating additional income for the company. We are expecting MCL to sell 813 lacs unit and 716 lacs unit in FY'12-13E respectively."
"At current market price of Rs 164, stock is trading at a PE of 4x discounting trailing four quarters EPS, EV/EBIDTA of 5.4x and EV/tonne of USD 49 discounting FY'11E earnings and capacity respectively. We are initiating our coverage on the company with 'HOLD'' rating. We have arrived at a target price of Rs 174 for the company by valuing it at EV/EBIDTA of 5x and PE multiple of 5x discounting FY'12E EBIDTA and EPS respectively," says Jaypee Capital Services research report.
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