Anand Rathi's research report on Birla Corporation
With 15.5m-ton cement capacity across north, central and east India, Birla Corp is aiming at 25m-ton cement capacity by FY25. The ongoing expansion will keep leverage high; we believe, however, that its net debt would be in check with greater profitability on various cost-optimisation steps and higher volume growth on the ramping up of capacities. A judicious geographic- and product-mix aimed at raising the shares of blended and premium cement in its portfolio are positives. We retain our Buy rating, with an unchanged target of Rs900.
Outlook
We retain our Buy rating, and maintain our Rs 900 target, valuing the stock at 8x FY22e EV/EBITDA and an EV/ton of $66.
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