Centrum's research report on IFGL Refractories
We recently had a detailed interaction with senior management of IFGL refractories and key takeaways were i) Revenue growth at an inflection point with consolidated topline growth expected at 15%+ for FY19E led by pricing growth of 5-7% and volume growth of 8-10%), ii) well invested asset base with completion of recent expansions at domestic as well as overseas operations placing IFGL favourably to meet increased demand and gain market share globally and iii) operating leverage benefits improving the margin profile. Management also stressed upon their efforts towards scouting for a good acquisition target in refractories space globally.
Outlook
We continue to like IFGL’s operationally sound high-quality global assets and expect solid earnings growth over FY18-20E which could end up being conservative given the strong management guidance. Recent correction has made valuations undemanding and provides a favorable risk-reward for long term investors. Maintain Buy with a TP of Rs320.
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