Mangalam Cement has the potential to rally from current levels, according to brokerage firm Dynamic Levels. The equity research firm has set a target of Rs 395, from the current levels of Rs 344. Here is why it can give decent returns in the medium term.
Expansion to add to revenues
The company has recently commissioned trial of new Cement Grinding Unit of 0.75 Million ton per annum (MTPA) at Aligarh. After this the overall capacity will be enhanced from 3.25 MTPA to 4 MTPA.
This is expected to boost revenues in the coming quarters.
Superb quarterly performance
The company's operating profit showed robust jump by 57 per cent (QoQ) from Rs. 24.87 crores to Rs. 39.05 crores. Net Profit jumped by 60.00% QoQ from Rs. 24.87 crores to Rs. 39.05 crores. It is likely that the momentum would continue.
Low debt to equity
Mangalam Cement has very low debt to equity ratio. This is a major positive when many cement companies are saddled with debt.
Institutions showing faith in the stock
As on 30th June 2016, 5 mutual funds, 2 Foreign Portfolio Investor, 6 Financial Institution/ Banks and 1 Insurance company are having stake in Mangalam Cement with a total 16.21% of holding. This shows that institutions have a faith in the company.
Part of reputed group
Mangalam is a part of giant Birla group, spanning generations, and is conglomerate of various companies with multifarious activities, like Century Textiles, Kesoram Industries, Mangalam Cement, Century Enka and Jay Shree Tea.
Great on the pricing front
Mangalam Cement was second largest performer pricewise in its sector after FY17 Budget rose 121%.
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