Centrum is bullish on Deccan Cements has recommended buy rating on the stock with a target price of Rs 670 in its research report dated August 10, 2018.
Centrum's research report on Deccan Cements
Deccan Cements (DCL) registered 23% YoY volume growth in Q1FY19, buoyed by strong demand across all south markets. Still, aggressive competition is preventing price recovery while fuel and freight costs are on rise, leading to 7% EBITDA decline YoY. We continue to like DCL owing to (1) its strong balance sheet and (2) as we expect pricing to recover in south which should help the industry pass on the energy cost inflation. DCL is trading at extremely cheap valuations (14% AOCF/EV yield, 4.6x FY20E EBITDA and USD40/MT replacement cost).
We reiterate BUY with a TP of Rs670.
For all recommendations report, click here
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