'Buy' This Stock For 14.8% Returns In 1 Year

Target Price

The Current Market Price (CMP) of Birla Corporation is Rs. 1,589. The brokerage firm has estimated a Target Price for the stock at Rs. 1,825. Hence the stock is expected to give a 14.8% return, in a Target Period of 12 months.

Company performance

Birla's revenues increased by 3% YoY to Rs17bn, while cement revenues were broadly flat YoY. Its Jute revenues increased by 62% YoY. Corporation's (BCORP) consolidated EBITDA of Rs. 2.7 bn drops 30% YoY/22% QoQ), and the company expects a 30% increase in capacity to 20 mt by early FY23. Additionally, premium product sales increased 500bps YoY to 53%. Other than that, Birla "aims to achieve a 30 mt capacity by FY27E should dispel concerns about long-term growth," Emkay Global thinks.

The brokerage firm has added, "We believe strong cash-flow generation is likely to deleverage the balance sheet, while the upcoming expansion is unlikely to strain financial performance. Moreover, improving profitability should help to regain double-digit RoIC from FY24E."

Comments by Emkay Global

Maintaining the 'Buy' rating for the stock, Emkay Global mentioned, "We broadly maintain our FY23E-24E EBITDA estimates with an unchanged TP of Rs1,825 (Dec'22E). Our DCF-based TP implies a 1-year forward EV/EBITDA of 9.5x."

About the company

Birla Corporation is the flagship Company of the M. P. Birla Group, which was incorporated as Birla Jute Manufacturing Company Limited. Birla acquired 100% shares of Reliance Cement. Installed capacity of Birla on the fronts of Cement, Jute Goods and Iron & Steel Casting are respectively 15.6 Million Tons, 52,631 Metric Tons, and 3,750 Metric Tons.

Disclaimer

The above stock has been picked from the brokerage report of Emkay Global. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.