Anand Rathi 's research report on Heidelberg Cement
With its greater focus on prices and to improve its premium positioning, Heidelberg’s volumes declined 2.3% y/y, leading to revenue falling 1.3% y/y. Higher realisations and cost optimisation, however, pushed up EBITDA/ton 6.4% y/y. The proposed loan to Zuari will generate higher other income and enable utilisation of MAT credit for the next 1.5-2 years. The net-debt-free balance sheet and negative working capital are positives, though we are concerned about slowing volume growth.
We retain our Buy, with a target of Rs236 (earlier Rs231)
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