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Recommendations from Cement & Engineering Sectors

Recommendations from Cement & Engineering Sectors

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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.
DALMIA BHARAT LTD.

CMP - Rs 1,859.00
BSE CODE : 542216
Volume : 20,053
Face Value : Rs 2
Target : Rs 2,030
Stoploss : Rs 1,715 (CLS)


Dalmia Bharat Limited is an 80-year-old organisation which enjoys leadership in core sectors such as cement, refractories and sugar. In the last 16 years the group’s sales have grown at a CAGR of 24 per cent to over Rs 12,100 crore in the year 2020 and the market capitalisation has also grown to Rs 10,000 crore in the year 2020. Looking at the consolidated quarterly results of the company, its net sales and operating income rose by 32.14 per cent from Rs 2,483 crore in Q4FY20 to Rs 3,281 crore in Q4FY21. The operating profit jumped 50.55 per cent from Rs 544 crore in Q4FY20 to Rs 819 crore in Q4FY21. The company reported net profit at Rs 640 crore in Q4FY21 as compared to net profit of Rs 24 crore reported in Q4FY20, bagging huge gains. The company operates in the key eastern and southern markets. The government’s focus on infrastructure development, low-cost housing, capacity expansion and improving balance-sheet are predicted to push its market share further and do well going forward. Hence, we recommend BUY.

ELECTROTHERM (INDIA) LTD.

CMP - Rs 157.60
BSE CODE : 526608
Volume : 16,272
Face Value : Rs 10
Target : Rs 180
Stoploss : Rs 140 (CLS)

Electrotherm (India) Limited was founded in 1983 to cater to the needs of all segments of the steel industry, foundries and heat treatment units. Going through the consolidated quarterly results of the company, its net sales and operating income rose by 3.76 per cent from Rs 719.75 crore in Q3FY20 to Rs 746.84 crore in Q3FY21. The operating profit jumped massively from Rs 44.34 crore in Q3FY20 to Rs 94.20 crore in Q3FY21. The company reported net profit at Rs 46.98 crore in Q3FY21 as compared to net profit of Rs 7.38 crore reported in Q3FY20, clocking handsome gains. The steel sector is predicted to experience a boost due to the collaboration of the Ministry of Steel, Government of India with the Government of Japan to push the sector through joint activities. Also, considering the substantial capital allocated by Union Budget 2020-21 to the steel industry, we recommend BUY.

(Closing price as of June 15, 2021)

 

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DSIJ Mindshare

Privatization bound BPCL Board approves of the amalgamation of BORL

Amalgamation is expected to enhance the valuation of BPCL bound for privatization but rising fuel prices may act spoiler.

Shreya Banthia / Article rating: 5.0

In the Board Meeting held on October 21, the scheme of amalgamation has been approved by the members. The amalgamation will consolidate BPCL’s presence in Bina facilitating future expansion and diversification in the region. BPCL, which is a Maharatna PSU holds 14-15 per cent of the country’s total refining capacity. Amalgamation is expected to enhance the valuation of BPCL bound for privatization by enhancing its refining capacity. 

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