Techno Funda - India Cement - ICICI Securities

Strategy

Buy India Cement in the range of Rs. 125.00-135.00 for target price of Rs. 165.00. Time Frame: Six months

Technical View

- The stock witnessed a strong buying demand in the vicinity of lower band of long term symmetrical triangle pattern. In the process, it witnessed faster retracement as it entirely retraced preceding sixteen months decline (Rs. 128-68) in just six months, indicating structural turnaround that offers fresh entry opportunity with a favourable risk reward set up

- Among oscillators, the monthly MACD is inching northward after generating bullish crossover, thus validating our positive stance

- We expect the stock to form a higher base and eventually accelerate upward momentum towards Rs. 165 levels in coming months as it is 61.8% retracement of last major correction (Rs. 226- 68), placed at Rs. 165

Fundamental View

- India Cements possesses a capacity of 15.5 MT with presence majorly in South India followed by West. Its network of eight integrated plants is spread across Tamil Nadu, Telangana, AP and Rajasthan along with one grinding unit each in Tamil Nadu and Maharashtra. Its brands 'Coromandel' is well accepted in the market with 60% of sales coming from retail channel

- While the company's realisations per tonne are healthy, cost inefficiencies (especially on the power costs front) have led to lower EBITDA margins. However, we believe, operational efficiency can move only higher, keeping the downside limited. Its weak return ratios would also see an improvement with higher profitability

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TechnoFundaStrategy_IndiaCement_June20.pdf

Shares of INDIA CEMENTS LTD. was last trading in BSE at Rs.132.1 as compared to the previous close of Rs. 126. The total number of shares traded during the day was 1613530 in over 13560 trades.

The stock hit an intraday high of Rs. 139.3 and intraday low of 128.65. The net turnover during the day was Rs. 215046945.

Source : Equity Bulls

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