Get App
Last Updated : Feb 24, 2020 11:01 AM IST | Source:

Hold Heidelberg Cement India; target of Rs 215: Prabhudas Lilladher

Prabhudas Lilladher recommended Hold rating on Heidelberg Cement India with a target price of Rs 215 in its research report dated February 13, 2020.

Broker Research @moneycontrolcom
  • bselive
  • nselive
Todays L/H

Prabhudas Lilladher's research report on Heidelberg Cement India

Heidelberg cement (HEIM) reported EBITDA below ours/consensus estimates by 10%/13% with miss across the fronts. Volumes dropped sharply by 5.5% YoY. While, higher prices helped it to expand EBITDA/t by 10% YoY. HEIM's EBITDA/EPS grew at a CAGR of 26%/68% over FY16-FY20, predominantly led by strong revival in region's pricing. EBITDA/t grew at CAGR of 23% while volumes grew marginally at a rate of 2.5%. Region is going to see sizeable capacity addition (12-14mnt) over next couple of years coupled with entry of three new players. HEIM is expanding capacity by 15% to 6.3mnt (to become operational by Q4FY21 in phases) through debottlenecking. However, we believe that contraction in margins would offset volume growth largely.


Hence, we expect EPS to grow at a CAGR of 2% over FY20e-FY22e. Given the peaked out margins and slow earnings growth, we downgrade the stock to Hold with TP of Rs215, EV/EBITDA of 8.5x FY21e.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Moneycontrol Ready Reckoner
Now that payment deadlines have been relaxed due to COVID-19, the Moneycontrol Ready Reckoner will help keep your date with insurance premiums, tax-saving investments and EMIs, among others.

First Published on Feb 24, 2020 11:01 am
Follow us on