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Published on 31/12/2019 11:39:41 AM | Source: Reliance Securities Ltd

Buy Mangalam Cement Ltd For Target Rs.400 - Reliance Securities

Posted in Broking Firm Views - Short Term Report| #Cement Sector #Mangalam Cement Ltd #Trading Report #Reliance Securities Ltd

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STOCK IN FOCUS

* Mangalam Cement (MGC) is likely to witness healthy traction ahead mainly on account of steady realisation in Northern region and cost synergies.

* Notably, commissioning of 11MW WHRS in the last month and recent USA petcoke contract at US$70 (US$77/tonne average cost in 2Q) along with likely improvement in utilisation will lead to meaningful decline in opex in the subsequent quarters.

* Further, improved fly-ash availability, new coal mining and improved biomass contribution are expected to aid it’s operating performance.

* We forecast EBITDA/tonne at Rs707 and Rs696 for FY20E and FY21E, respectively.

* We maintain our fundamental BUY recommendation on the stock with a Target Price of Rs400

 

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