Edelweiss Securities has initiated coverage with a buy rating on cement company Birla Corporation, citing strong earnings growth ahead after capacity expansion.
The research house expects the stock to hit a target price of Rs 1,300, which is 36 percent higher compared with Tuesday's closing price. The stock rallied 2.4 percent intraday Wednesday.
The company has chalked out capacity expansion programme for FY18-H1FY21. Post this expansion, it will be the fifth largest cement manufacturer in India.
Edelweiss expects the company to post revenue CAGR of 19 percent over FY17-19.
"We forecast 42 percent, 55 percent & 50 percent EBITDA, EBIT & net profit growth respectively over FY17-19," it said.
At 10:53 hours IST, the stock price was quoting at Rs 971.60, up Rs 15.80, or 1.65 percent on the BSE.
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