Budget 2020

Buy ITD Cementation India, target price Rs 63: Anand Rathi

Anand Rathi has given buy rating ITD Cementation with a target price of Rs 63. The share price moved down by 2.04 per cent from its previous close of Rs 51.45. The stock’s last traded price is Rs 50.40.

ITD Cementation India Ltd., incorporated in the year 1978, is a Small Cap company (having a market cap of Rs 873.54 Crore) operating in Construction sector.

For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 399.43 Crore, down 45.99 % from last quarter Sales of Rs 739.61 Crore and down -43.31 % from last year same quarter Sales of Rs 704.64 Crore. The Company reported net profit after tax of Rs -18.18 Crore in latest quarter.

Investment Rationale
The brokerage largely retains the assumptions for the future, but FY21e earnings are ~0.7% higher, and ~0.2% for FY22e as it incorporates actuals from the FY20 annual report. On the slightly revised estimates, the stock is available at a PER of 7.2x FY22e, against the (Rs63 a share, unchanged) TP-implied 9x. Risk: Any prolonged Covid-19 impact.

Promoter/FII Holdings
Promoters held 46.6 per cent stake in the company as of June 30, 2020, while FIIs held 6.8 per cent, DIIs 27 per cent and public and others 19.2 per cent.