Prefer India Cements, says Rajen Shah

Rajen Shah, CIO of Angel Broking told CNBC-TV18, "All the cement companies whether it is UltraTech Cement, Ambuja Cements and ACC are trading at valuation of Rs 900 crore per million tonne. If you see this company, India Cements is available at a marketcap of Rs 3,500 crore. If you have debt of Rs 3,500 crore, the enterprise value works out to Rs 7,000 crore and the capacity is about 16 million tonnes. So you are getting it for Rs 450 crore per million tonne, which is half the valuation of ACC, Ambuja or UltraTech for that matter.”

He further added, “The demand situation in southeast is not as good as in the northern and the western part of the country but I think the best time to buy is when demand is very slack because that is the time you get stocks cheap. I think at Rs 115-117 India Cements doesn’t have much to lose.”

“If you are talking about huge infrastructure growth, if you are talking about huge development in the country talking about ports, airports and all the sanitation and all that, cement is something which is obviously required and if we could see reasonably fine growth over the next three-four years, this stock should give you a decent return with very low risk,” he said.