Recommendation From Cement- Major Sector & Construction & Contracting -Real Estate Sector

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations

HEIDELBERG CEMENT INDIA LTD 

CMP - Rs.203.35 
BSE CODE 500292
Volume 45363 
Face Value Rs.10 
Target Rs.225
Stoploss Rs.185 (CLS)
 

Heidelberg Cement India is one of the leading producers of building materials worldwide. Their company's core products are cement, ready mix concrete (RMC), aggregates and related activities. The company’s limited capacity addition in the central region will drive utilisation. Heidelberg Cement India has an exposure of about 94% of its sales in this region, which reflects a pick-up in construction activity, coupled with better sand availability in Uttar Pradesh which drove cement volumes in H1FY19. Also, the hike in minimum support prices of agriculture produce and higher infra spend are likely to keep cement demand strong. Consequently, we expect revenues to increase at 12.4% CAGR in FY18-20E. The strong retail presence will keep realisations high. Heidelberg is a 100 per cent blended products company with more than 80 per cent of its sales coming from the trade segment, where prices are ~8-10 per cent higher than non-trade segment. We recommend a BUY. 




PNC INFRATECH LTD

CMP - Rs.174
BSE CODE 539150
Volume 21,108 
Face Value Rs.2 
Target Rs.190
Stoploss Rs.155 (CLS)
 

PNC Infratech is engaged in the construction of highways, runways, bridges, flyovers, power transmission lines. The company has a track record of successfully executing several construction projects on time. The company has been certified with ISO 9001:2008 for following a well-defined quality management system. PNC Infratech's wholly-owned subsidiary company PNC Delhi Industrial Infra has received the realisation of Rs.145.63 crore on May 17, 2019 from Delhi State Industrial & Infrastructure Development Corporation (DSIIDC).

The robust revenue growth of 54% YoY to Rs.727 crore in Q3FY19 was led by strong execution of large orders, while 9MFY19 revenue growth remained strong at 86%YoY to Rs.2,021 crore. PNC has received financial closure for all seven projects and four of these projects achieved appointed date and execution is currently in progress. We recommend a BUY



(Closing price as of May 22, 2019)

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