Buy ITD Cementation India; target of Rs 67: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on ITD Cementation India

ITCE’s posted strong operating performance in 4QFY20 led by robust execution (up 25% YoY) resulting into stellar EBIDTA margins of 11.4%. In a phased manner, the company has commenced operations at its major project-sites and is currently operating at 50-55% efficiency. However, execution is taking a hit as only 50% of labour (8,500 vs 18,500) is available. Further, due to Covid-19 and nationwide lockdown, the execution for Rs40-45bn projects pertaining to some of its clients have been delayed to 3QFY21 (vs earlier expectation of 1Q). Given a strong balance sheet and cash flow position, the company has not availed any moratorium on its loans.

Outlook

ITD Cementation (ITCE) is a dominant player in the urban infra space with a MNC parentage. We remain positive on the company given it’s a) healthy and diversified order book (Rs117.4bn as on 4QFY20) b) strong execution capabilities c) lean balance sheet (D/E of 0.4x) d) advanced technology and skilled labour derived from the strong MNC parentage. At CMP, the stock trades at a P/E of 21.4x/7.4x on FY21E/FY22E EPS and is trading at an EV of 4.3x/3.5x FY21E/FY22E EBITDA. We maintain BUY rating on the stock with a TP of Rs67.

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