Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessStocks

Buy Birla Corporation; target of Rs 650: Dolat Capital

Dolat Capital is bullish on Birla Corporation has recommended buy rating on the stock with a target price of Rs 650 in its research report dated May 23, 2020.

May 25, 2020 / 09:33 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Dolat Capital's research report on Birla Corporation

BCORP posted (-9.8%)/ 11.3%/ 64.1% YoY growth in revenue/ EBITDA/ APAT to Rs16.9 bn/ Rs3.4 bn/ Rs1.8 bn in Q4FY20 driven by +4.3% YoY realization growth (+3.1% QoQ). We expect 4.8%/ 3.4%/ (4.4%) revenue/ EBITDA/ APAT CAGR over FY20-22E led by (-19.2%)/ (34.6%) volume growth and (-0.5%)/ 2.0% cement realization growth in FY21E/ FY22E. We factor 3.9mtpa/ 1.2mtpa Mukutban (Maharashtra)/ Kundanganj (U.P.) expansion to commence by end of Q2FY22 vs. Q1FY22 (management guidance for Mukutban). Our 14.8mt volume estimate for FY22E has decent upside risk as we factor 50% (vs. 87.7% in FY20) utilization for H2FY22E for this 5.1mtpa expansion. These expansions likely to provide decent growth in FY23E also. These expansion will keep its net D:E high till FY22E which will start to decline from FY23E.

Outlook

We like BCORP’s focus on trade segment (81% share), increasing share of premium products (41% share in trade), higher share (92%) of high margin blended cement and sizable presence in relatively better regions of Central, North and expansion in West. Thus, we recommend Buy with a TP of Rs 650 based on 6.5x consolidated FY22E EV/EBITDA (Our TP factors EV of USD 59/tn).



For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: May 25, 2020 09:33 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347