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Change Change %
1.25 0.88%

Updated:20 Mar, 2018, 15:51 PM IST

Change Change %
1.40 0.99%

Updated:20 Mar, 2018, 16:01 PM IST

Research Report Detail

Report Date Call Price@Call Target Price
Stop Loss
Current Status Time Horizon
31-07-2017 Buy 201.65 258.00
Open Long (1Y)

Edelweiss maintains buy on The India Cements

On the face of it, India Cement's Q1FY18 result appears disappointing. But, we highlight the brighter aspects: 1) volume stood flat YoY, despite decline in target markets (South down 7-8% YoY and West aroud 6%) as the company penetrated non-core markets. Expect better volumes in Q2FY18; 2) realisations rose 5% QoQ and stay unchanged currently; and 3) Q1FY18 had around INR120mn non-recurring cost impact related to ESOPs and meeting emission norms, implying adjusted EBITDA of INR1.97bn. What really inspires our conviction on the stock is the unchanged management commentary to: a) focus on debt repayment (as in past 2 years); b) undertake no expansions until utilisation reaches more than 85% (from around 70% in FY17); and c) focus on exiting non-core business (recently shut the infrastructure segment). Being optimistic on sector demand recovery, we see no risk to our estimates and maintain 'BUY' with a revised TP of INR258 (INR220 earlier).        

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