Buy Rain Industries; target of Rs 144: IDBI Capital

IDBI Capital's research report on Rain Industries

Rain Industries (Rain) reported slightly better than expected Q2CY17 results with EBITDA growth of 16.0% YoY to Rs 4,914 mn driven by Carbon Product segment EBITDA which grew by 19.2% YoY to Rs 4,002 mn. Adj. net profit remained flat YoY to Rs 1,556 mn (10.5% above our estimates). Net debt remained flat QoQ to $952 mn. The company announced setting up of vertical shaft kiln in Vishakapatnam (370 ktpa) in Andhra Pradesh with a capex of Rs4,240 mn. The project is likely to commence by March 2019. We raise our estimates and target price to Rs144; Maintain BUY.

Outlook

We also raise our capex and net debt assumptions to factor in the new capex announcement related to vertical shaft kiln in Vishakapatnam. We raise our target price to Rs144 (previous Rs139) and maintain our BUY rating.