Motilal Oswal 's research report on India Cement
India Cement (ICEM)'s 4QFY20 results highlight the continued loss in market share, with volumes down 20% YoY v/s market decline of ~10% YoY. We note that ICEM has reported the lowest EBITDA in close to a decade. We lower our FY21/FY22 estimates to factor weaker volume trends. Following sharp appreciation in the past six months, we find the stock fairly valued at 9.3x FY22 EV/EBITDA and USD60/t of capacity, and maintain our Neutral rating. Any potential change of ownership and management control is the key monitorable.
Outlook
ICEM trades at 14.5x/9.5x FY21/FY22E EV/EBITDA and at USD64/t / USD63/t FY21/FY22E capacity. We value the stock at 9x FY22E EV/EBITDA to arrive at a target price of INR120. Maintain Neutral.
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