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Why Share Brokers Recommended picks Sagar Cement

Discussion in 'Indian Stocks' started by kailash19, Oct 12, 2016.

  1. kailash19

    kailash19 New Member

    Oct 7, 2015
    Likes Received:
    Sagar Cement have a target price of Rs 970 on the share. It is a south based cement player and southern as a area has been doing quite well from a cement view. This company specifically if you face at from 2008 till now, they have ramped up their capacity seven times from a littler base of around 0.6 million tonne to about four million tonne odd. What we anticipate is that the company would further ramp up its capacity to around six million tonne.

    Company has acquired BMM Cement in 2015 and the company has been able to turnaround this company and as a result of that what we have seen is that the capacity utilisation have gone up to about 60% as seen in the past quarter. Like other south based players, we anticipate this company to deliver EBITDA/tonne of over 900 and we anticipate a topline development of 23% and bottom line development of over 55%. So, profit prospect for FY18 is around Rs 110 crore.

    We anticipate return ratios to double to around 14-18% and present stock is available at 65 EV/tonne and we have valued it at about Rs 80 EV per tonne which is what we have given to other players. So, within south based players, I think this company is rightly poised to increase further.

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