Midcap Cement Stock Trading Near 52 Week Low, HDFC Securities Says "Buy" For Robust 56% Upside

HDFC Securities is bullish on Birla Corporation Ltd., a midcap stock from the Cement sector. The brokerage has assigned a target price of Rs 1,400 apiece on the stock. It claims healthy gains of up to 56% if purchased at the current market. The company is the flagship Company of the M.P. Birla Group. The company is engaged in the manufacturing of cement of various kinds. It has a market capitalisation of Rs 6,944.73 crore. Here are the key takeaways from the report:

Birla Corporation Stock Performance and Outlook

On NSE, the stock of Birla Corporation is currently trading at Rs 901.85 apiece. The stock recorded its 52-week low 20 June 2022 at Rs 823 apiece and 52-week high on 3 February 2022 at Rs 1,405 apiece, respectively. The stock has continuously fallen in the past 1 year, It declined 0.49% in 1 week, 5.12% in 1 month and 7.36% in 3 months, respectively. In 1 year it has fallen 33.37%. In 3 years it gained 19.19%. In the 5 years, it has fallen 9.92%.

Operating losses at Mukutban shrink; margin recovers, "Buy" Says HDFC Securities

The Brokerage said, "We maintain our BUY rating on Birla Corporation (BCORP), with an unchanged target price of INR 1,400/share (8.5x Mar-25E consolidated EBITDA). We continue to like BCORP for its large retail presence in the lucrative north/central regions and various cost-cutting initiatives. BCORP reported healthy 11/5% volume/NSR growth YoY. However, unit EBITDA fell 43% YoY on elevated fuel prices and operating losses at the Mukutban plant. On QoQ basis, Mukutban losses narrowed and BCORP also benefited from slight fuel cost reduction driving consolidated unit EBITDA recovery by ~INR 135/MT QoQ.We expect margin recovery to gain pace as fuel prices continue to trend down, continued ramp-up of the Mukutban plant and incentive accruals H2FY24E onwards. These along with no major near-term Capex should reduce gearing from FY24 onwards."

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.