Add Deccan Cements, target price Rs 515: HDFC Securities

HDFC Securities has add call on Deccan Cements with a target price of Rs 515. The current market price of Deccan Cements Ltd. is Rs 444.9. Time period given by analyst is one year when Deccan Cements Ltd. price can reach defined target.

Deccan Cements Ltd., incorporated in the year 1979, is a Small Cap company (having a market cap of Rs 620.53 Crore) operating in Cement sector.

Deccan Cements Ltd. key Products/Revenue Segments include Cement, Power Generation, Other Operating Revenue and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Standalone Total Income of Rs 189.77 Crore, down -1.74 % from last quarter Total Income of Rs 193.13 Crore and down -12.57 % from last year same quarter Total Income of Rs 217.06 Crore. Company reported net profit after tax of Rs .20 Crore in latest quarter.

Investment Rationale
The brokerage maintains ADD rating on Deccan Cements (DCL), with a lower target price of INR 515/sh (6x its Mar-24E EBITDA). The company reported weak performance in Q4FY22 as both volumes and margin contracted YoY on lower sales and rising cost inflation. It reported 13/35/15% YoY revenue/ EBITDA/APAT decline. DCL’s 2mn MT capacity expansion is slightly delayed due to delay in environmental clearances

Promoter/FII Holdings
Promoters held 56.24 per cent stake in the company as of 31-Mar-2022, while FIIs owned 7.72 per cent, DIIs 0.41 per cent.