Cement stocks have been on the roll for quite some time now. Many regions in India saw a surge in the cement price in early September which will have a positive impact on the margins of these companies. As the country is ready to transition from the monsoon season to the winters, Analysts remain optimistic that the demand for cement will rise exponentially in the near future.
Here are 4 Cement stocks recommended by analysts for an upside of up to 36%:
Ambuja Cements Limited
The shares of the company have inched up 1.15 percent and were trading at Rs 502 levels on Thursday morning. In the span of two months, the stock has gained approximately 36 percent. The rally was majorly driven after the Adani group acquired a 63 percent stake in the company to mark their entry into the segment.
Brokerage firm Jefferies has upgraded its rating on Ambuja to ‘Buy’ and revised the target price to Rs 620 per share which represents an upside of 24% from the current levels.
“Given the faster growth trajectory for Ambuja under new leadership, we now value Ambuja’s consolidated EBITDA at 16x EV/EBITDA, one notch higher than the 15x target multiple for Ultratech. Further, fund infusion by promoters (which we have only partly factored in given lack of details on Cash deployment) leaves option-value for higher acquisition-related growth in profitability,” Jefferies added.
Ambuja Cements is one of India’s leading cement manufacturers, with a presence in 80 countries with a focus on cement, aggregate, and concrete.
Dalmia Bharat Limited
The shares of the company were trading marginally higher on Wednesday morning at Rs 1,528 levels. In the past three months, the stock has zoomed by approximately 22 percent.
Geojit BNP Paribas has accumulate a call on Dalmia Bharat with a target price of Rs 1,950 which represents an upside of 28% from the current levels.
DBL’s ongoing expansion is on track and now targets an additional capacity of ~10MT to reach 48MT by FY24. DBL also has long-term plans to become a pan-India player with a capability of 110-130MT by FY31, which could become a strong support for re-rating, the brokerage said.
Dalmia Bharat Ltd (DBL) is India’s fourth largest cement company engaged in the business of Manufacturing and Selling of Cement.
The shares of the cement company were trading in red after it slipped by 1.1 percent at Rs 2,323 levels in the early hours on Thursday. The stock reached its 52-week high of Rs 2,785 last week. The rally in the stock was induced after the company was acquired by the Adani group.
Brokerage firm Axis Direct has retained a ‘Buy’ tag on ACC limited with a target price of Rs 3,050 per share which represents an upside of 31% from the current levels.
“The company has a Pan-India presence and with strong positioning in its key market of the East and South India, resilient cement demand aided by capacity expansion, higher realization and impending cost benefit, we expect the company to gain market share going forward,” added the brokerage.
ACC Limited is engaged in manufacturing and selling Cement and Ready Mix Concrete.
UltraTech Cement Limited
The company’s shares were trading in red at Rs 6,170 levels in the first half of Thursday’s trading session. The stock reached its 52-week low of Rs 5,157 in June this year. Currently, it has zoomed by approximately 20 percent from those levels.
ICICI Securities has a ‘Buy’ rating on the stock with a target price of Rs 8,500 per share which represents an upside of 38% from the current levels.
The company has a diversified pan-India market presence and with timely capacity creation, a premium brand positioning, and increased cost efficiencies and is better placed to gain market share / improve margins, the brokerage highlighted.
UltraTech Cement Limited, part of the Aditya Birla Group, is the largest manufacturer of grey cement, ready-mix concrete (RMC), and white cement in India.
Written by Anoushka Roy
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