Buy Mangalam Cement; target of Rs 337: Angel Broking

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26 Aug, 2025 12:21

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Angel Broking`s research report on Mangalam Cement“For 2QFY2015, Mangalam Cement (MCL)’s top-line grew robustly by 61.9% yoy to Rs240cr on back of commissioning of new capacity, strong volume growth and stable realizations. On the EBITDA front, the company's margin improved by 480bp yoy to 9.7%. Consequently, the net profit improved by 80% yoy to Rs4.6cr, but the same was lower than our estimate owing to a higher interest expense.” “MCL reported a healthy improvement of 480bp yoy in OPM to 9.7% on the back of healthy realization. However the same was below our estimate of 12.8% due to higher power and fuel & freight charges. The fuel cost rose by 82% yoy due to higher coal prices and increase in transmission cost of power. The operating cost/tonne increased by 7.1% yoy to Rs3,649. The EBITDA/tonne came in at Rs391, an increase of 124% yoy. We expect 2HFY2015 to be better for MCL in anticipation of strong realization and softening in power and fuel cost.” “Going ahead we expect the company’s bottom-line to improve at a CAGR of 64% over FY2014-16E due to healthy realizations and strong volume growth. We maintain our Buy recommendation on the stock considering its attractive valuation of EV/tonne of $49 (on FY2016 3.25mn tonne capacity). We have assigned a multiple of 6.5x EV/EBITDA to arrive at a target price of Rs337,” says Angel Broking research report. 

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