Reliance Securities has maintained 'Buy' on India Cements (ICL) after the company declared its second quarter results. The stock broker fixed price target at Rs 125.
Commenting on the results, Reliance Securities said, ''ICL reported better than expected results for the second quarter of the financial year 2015-16. Cement EBITDA/tonne came in at Rs 992 as against Rs 651 and Rs 871 reported in 2QFY15 and 1QFY16, respectively. Healthy operating performance along with yearly decline in interest costs (owing to reduction in debt) has benefitted ICL's net profit which stood at Rs 410 million in 2QFY16, as against Rs 75 million reported last year.''
Commenting on the investment rationale, the stock broker said, ''At CMP, the stock trades at an EV/tonne of USD 67/USD 63 for FY16E and FY17E, respectively. In terms of EV/EBITDA, it trades at 6.4x/4.8x for FY16E/17E, respectively, which appears attractive. We maintain Buy on the stock with a revised target price of Rs 125 from Rs 115 earlier.''
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