Buy Deccan Cements; target of Rs 670: Centrum

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26 Aug, 2025 12:21

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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).

Outlook

We reiterate BUY with a TP of Rs670.

For all recommendations report, click here

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