1 MANGLMCEM share price target reports by brokerages below. See what is analyst's view on MANGLMCEM share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
With the improvement in realisations witnessed in the recent period, we believe the stability of prices around these levels would enable cement companies to improve their profitability. Capacity bottlenecks may hit the company in or after FY21E. Citing the company’s improved profitability ledby higher realisations, further cost optimisation expected with WHRMS along with stability of petcoke prices and current valuations (~$40 FY21E EV/t), we upgrade Mangalam Cement to HOLD rating with a target price of | 280 valuing it at 5x FY21E EV/EBITDA.
Continued cost pressure and soft volume dragged MGC’s quarterly performance. While we believe that commissioning of 11MW WHRS and sustainability of realisation recovery is likely to aid MGC to witness a remarkable improvement in its unitary EBITDA in subsequent quarters. However, considering its below par operating performance even after realisation recovery, stock is unlikely to be re-rated. Hence, we maintain our HOLD recommendation on the stock with a revised Target Price of Rs255 (6x of EBITDA FY21E).
Despite operating at 75% levels of utilisation, the company has been unable to generate higher margins that remains a concern from a cash flow generation perspective. Further, capacity bottlenecks may hit the company after FY21E amid issues with respect to fly ash availability and high debt levels. Considering the above and the current valuation levels, we have a REDUCE rating with a target price of Rs 215/share at FY21E EV/tonne of $45.
Continued cost pressure despite freight rebate dragged the performance. However, better realisation was a positive surprise. While we believe that commissioning of 11MW WHRS from Apr’19 may aid MGC to save in savings in Power & Fuel cost, this will be not enough for MGC to witness a remarkable improvement in its unitary EBITDA. Hence, a meaningful realisation improvement is the most important for the company. We maintain our HOLD recommendation on the stock with an unrevised Target Price of Rs210 (6x EBITDA FY21E).
Led by input cost increase, the company has been unable to generate adequate EBITDA margins for sustainable growth. Further, Mangalam is expected to end FY19E with utilisation level of 76% and FY20E with 82%. The company does not have any capex plans currently to add capacities. A debt of ~Rs 400 crore along with sub-par EBITDA margins may prompt the management to improve its operational performance before adding further capacities. Hence, due to capacity constraint post FY20E, we expect growth to be driven largely by prices unless the capacity constraint is addressed. Hence, we maintain our HOLD rating on the stock with a revised target price of Rs 215/share (i.e. at 11x FY20E EV/EBITDA and FY20E EV/tonne of US$38).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
DISCLAIMER: Information is provided "as is" and solely for informational purposes, not for trading purposes or advice, and may be delayed. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and FrontPage will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein.