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6 Cement Stocks To Buy As Recommended By Sharekhan

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Sharekhan, renowned brokerage firm, has come out with latest report on cement sector and chosen top six cement stocks for investors that will give potential return if they buy them at the current market price.

 

The stocks recommended by the brokerage includes Shree Cements Ltd., UltraTech Cement Ltd., Grasim Industries Ltd., The Ramco Cements Ltd., J. K. Cement Ltd., and Dalmia Bharat Ltd. Check below details related to stock and other vital aspects:

1. Shree Cements Ltd

1. Shree Cements Ltd

The large-cap stock is currently trading at a discount of 36% from its highs. The current market price of the stock is Rs 20,036 apiece with 52-week high at Rs 31,469 and 52-week low of Rs 17,865 apiece. The PE of the stock is 31 and sector PE is 27. The market capitalization is Rs 72,291 crore and dividend yield is 0.45%. It has a strong dividend history and declared dividend in the last 5 years regularly. It has declared an equity dividend of 900% amounting to Rs 90 per share and it is turning ex-dividend on July 13, 2022.

Sharekhan has asked investors to buy the stock at the CMP of Rs 20,036 to receive the Price Target of Rs 26,000 apiece. Sharekhan expects that the sale volume of Shree Cements to rise by 16% y-o-y. Realisation is likely to improve by 3% q-o-q. It expects EBITDA/tonne of Rs. 1,099 (-25.8% y-o-y, -3.1% q-o-q).

2. UltraTech Cement Ltd
 

2. UltraTech Cement Ltd

The current market price (CMP) of the stock is Rs 5,792 apiece. The 52-week high is Rs 8269 apiece and 52-week low is Rs 5157 apiece. It is a company with high TTM EPS growth. The PE of the stock is 22.74 and sector PE is 27.11. The market capitalization is Rs 1,67,009 crore at the time of writing the story. Currently, it is trading at a discount of 29% from its highs. It has declared an equity dividend of 380% or Rs 38 per share for the year ending March 2022. The dividend yield is 0.65%.

Sharekhan has given buy tag for the stock with a target price of Rs 7100 if investors buy it at its current price of Rs 5792 apiece. Sharekhan expects volumes to rise by 13.5% y-o-y, while realisations are expected to improve by 4% q-o-q. "We expect EBITDA/tonne of Rs. 1,187 (down 23% y-o-y, +5.5% q-o-q) owing to owing to increase in cost of power & fuel costs."

3. Grasim Industries Ltd

3. Grasim Industries Ltd

The current market price of the large-cap stock is Rs 1375 apiece. The stock's 52-week high is Rs 1929 apiece and 52-week low is Rs 1276 apiece. Currently, it is trading at a discount of 28% from its highs. The PE of the stock is 12.01 and sector PE is 29.50. The market capitalization is 90,670 crore and dividend yield is 0.73%. The dividend history of the stock is good and it has declared dividend regularly for the last 5 years. It has declared an equity dividend of 500% amounting to Rs 10 per share for the year ending March 2022.

Sharekhan has initiated buy call for the stock and if investors buy the stock at its current market price it can give a potential target price of Rs 1740 apiece Sharekhan expects revenues to be driven by chemical segment led by higher realizations while Viscose to post higher volume growth y-o-y. High interest and depreciation to affect net profitability.

4. The Ramco Cements Ltd

4. The Ramco Cements Ltd

The current market price of the stock is Rs 650 apiece. The 52-week high is Rs 1132 apiece and 52-week low Rs 575 apiece. Currently, it is trading at a discount of 42% from its highs. The PE is 17.44 and sector PE is 27.11. The market capitalization is Rs 15375 crore and dividend yield is 0.46%. It has good dividend history and declared dividend regularly in the last 5 years. It has declared an equity dividend of 300% equal to Rs 3 per share for the year ending March 2022. It is turning ex-dividend on August 2, 2022.

Sharekhan has been optimistic about the stock and gave buy rating with a target price of Rs 850 apiece from current market price of Rs 650 apiece.

5. JK Cement Ltd

5. JK Cement Ltd

The current market price of the stock is Rs 435 apiece with 52-week high of Rs 816 apiece and 52-week low of Rs 366 apiece. The PE of the stock is 11.04 and sector PE is 27.11. The market capitalization is 5118 crore and dividend yield 1.15%. It has good dividend track record and declared dividend in the last 5 years without fail. It has declared an equity dividend of 150% equal to Rs 15 per share. It is turning ex-dividend on August 2. Currently, it is trading at a discount of 46% from its highs.

Sharekhan suggests investors to buy the stock for a current market price of Rs 435 to receive the target price of Rs 600. Sharekhan expects volumes to rise by 8% y-o-y, while realisations are likely to rise by 4% q-o-q.

6. Dalmia Bharat Ltd

6. Dalmia Bharat Ltd

The current market price of the stock is Rs 1441 apiece. The 52-week high and low ranges are Rs 2548 apiece and Rs 1212 apiece, respectively. It is trading at a discount of 43% from its highs. The PE of the stock is 23 and sector PE is 27.11. It has a market capitalization of Rs 27009 crore and dividend yield is 0.62%. The dividend history is quite good and it has declared dividend in the last 5 years. For the year ending March 2022, it has declared an equity dividend of 450% equal to Rs 9 per share.

The brokerage has given a buy tag to the stock with a target price of Rs 1850 from cmp of Rs 1441 apiece. Sharekhan expects volumes to rise by 16% y-o-y, while realisations are expected to increase by 6% q-o-q.

Disclaimer

Disclaimer

The above stocks have been picked from the brokerage report of Sharekhan. 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.

 

Story first published: Thursday, July 7, 2022, 13:28 [IST]
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