Buy Madras Cement : Target Rs 4800
Sharekhan research has maintained buy rating on Madras Cement with target price of Rs 4800 in its December 24, 2004 report. “MCL’s expansion plans will drive its volume growth going ahead. The company plans to increase its capacity by 4MTPA by the end of FY2009. It is also investing in renewable energy and CPPs which will keep a check on its variable costs and enable it to maintain its OPM. At the current market price of Rs 4,508 the stock is trading at a price-toearnings multiple of 11.6x discounting our FY 2008 earnings estimate and at 9.1x discounting our FY2009 earnings estimate. It also trades at an EV/tonne of USD 152 on increased capacity. As mentioned in one of our earlier updates, the company could reward its shareholders either with a bonus or with a stock split. Meanwhile we maintain our Buy recommendation on MCL with a price target of Rs 4,800 per share,” says Sharekhan report.
