Anand Rathi 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 24, 2020.
Anand Rathi 's research report on Birla Corporation
Despite eight days production lost, Birla Corp’s EBITDA/PAT grew 11%/52% y/y on higher realisation, operational and tax savings. The Kundanganj expansion has been postponed; the Yavatmal and Chanderia expansions will continue, keeping leverage high. The strong brand focus, cost-saving measures (WHRS/solar plant/ railway siding at Kundanganj) and rising blended/trade sales will aid. We retain our Buy rating, and raise our target to `650 (earlier `588).
Outlook
We retain our Buy rating, raising our target to `650, valuing it at 7x FY22e EV/EBITDA and an EV/ton of $55.
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