Buy Deccan Cements; target of Rs 380: HDFC Securities

HDFC Securities' research report on Deccan Cements

Deccan Cement’s (DECM) 1QFY21 volume fell 33% YoY. However, owing to a sharp rebound in regional pricing, revenue fell only 24% YoY to Rs 1.39bn. Margin soared 50% YoY, thus cushioning EBITDA to Rs 399mn, a decline of 1% YoY. APAT rose 12% YoY on a lower tax rate (new tax regime).

Outlook

We expect demand recovery and benefits accruing from WHRS and loading infrastructures to drive earnings recovery. We maintain BUY with an unchanged target price of Rs 380/sh.