Buy Mangalam Cement; target of Rs 600: ICICI Direct

ICICI Direct's research report on Mangalam Cement

The company is a north based player with cement capacity of 4.0 MT having plants in Morak (Rajasthan) and Aligarh (UP). Mangalam markets and sells cement under the brand name Birla Uttam Cement.The key markets include Uttar Pradesh, Rajasthan and Madhya Pradesh having revenue share of ~45:30:25, respectively The company is in the process of increasing its clinker capacity at its existing facility at Morak, from 2.3 MT to 2.6 MT at a projected cost of Rs 135 crore

Outlook

Despite the recent run up, the company is still available at $49/t based on FY23E value. Hence, we remain positive and retain BUY rating on the stock  We value the stock at Rs 600 i.e.5.0x FY23E EV/EBITDA