Buy ITD Cementation India, target price Rs 106: HDFC Securities

HDFC Securities has buy call on India with a target price of Rs 106. The current market price of ITD Cementation India Ltd. is Rs 70.1.

ITD Cementation India Ltd., incorporated in the year 1978, is a Small Cap company (having a market cap of Rs 1201.65 Crore) operating in Construction sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 792.68 Crore, up 42.93 % from last quarter Total Income of Rs 554.60 Crore and up 11.91 % from last year same quarter Total Income of Rs 708.33 Crore. Company reported net profit after tax of Rs 8.77 Crore in latest quarter.

Investment Rationale
Although consolidated net debt (Rs 4.4bn vs Rs 3.4bn at 2QFY21) has increased QoQ, the balance sheet remains robust at 0.4x net D/E, as cash utilisation has gone up. The brokerage maintains BUY on ITD with an unchanged target price of Rs 106/sh, (1) given large order book (~4.5x FY20 revenue), (2) strong balance sheet and (3) supportive valuation (6.1x FY23E EPS).

Promoter/FII Holdings
Promoters held 46.6 per cent stake in the company as of Dec 30, 2020, while FIIs held 10.6 per cent, DIIs 20.5 per cent and public and others 22 per cent.