Buy GMDC; target of Rs 210: HDFC Securities

HDFC Securities is bullish on GMDC has recommended buy rating on the stock with a target price of Rs 210 in its research report dated May 13, 2018.

Broker Research

May 21, 2018 / 17:54 IST

26 Aug, 2025 12:21

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HDFC Securities' research report on GMDC

GMDC’s 4QFY18 numbers were strong with revenues at Rs 20.7bn (16.8% YoY) and adj. EBITDA of Rs 1.98bn (33.1% YoY). Reported nos. were hit by (1) Salary arrears and gratuity provision of Rs 631mn, and (2) Change in depreciation method on power assets (Rs 623mn). 4Q volumes were strong (3.4 mt, 27% YoY/QoQ). APAT rose 51.8% YoY to Rs 1.37bn.

Outlook

Accordingly our EBITDA for FY19E/20E rises by 2.8/0.7%. With cash now at ~22% of balance sheet, capital allocation decisions are key hereon. Investments in loss-making subsidiaries worry us. Instead, dividends/buybacks or investments into viable wind assets are called for. Given inexpensive valuations, a BUY is justified. Our SoTP value of Rs 210/sh (see inside) is based on 6.5x Mar 20E EBITDA.For all recommendations report, click here

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