Buy ITD Cementation India; target of Rs 67: Prabhudas Lilladher

Prabhudas Lilladher's research report on ITD Cementation India

ITD cementation reported operational losses during the quarter despite healthy execution as the company made provisions of expected losses on account of extended timelines and additional costs due to the pandemic, (and not unlikely to be compensated by the clients). However, execution witnessed sharp pick-up on the back of labour availability approaching pre-covid levels. With operational efficiency across projects likely to normalize by 4QFY21, recent projects (Rs30bn) entering execution stage, robust order inflows and strong bid pipeline, execution momentum is expected to be strong in H2FY21. ITD Cementation (ITCE) is a dominant player in urban infra space with an MNC parentage. We remain positive on the company given it’s a) healthy and diversified order book (Rs119.2bn as at 2QFY21) b) strong execution capabilities c) lean balance sheet (D/E of 0.6x) d) advanced technology and skilled labour derived from the strong MNC parentage.

Outlook

At CMP, the stock trades at a P/E of 21.5x/ 7.5x on FY21E/ FY22E EPS and is trading at an EV of 4.3x/ 3.5x FY21E/ FY22E EBITDA. We maintain BUY rating on the stock with a TP of Rs67 (Same as earlier).

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.

Read More