Some such stocks are visible from the earnings season, in which brokerage houses are betting due to the better growth outlook. If you are also looking for some such stocks, then you can keep an eye on Star Cement from the cement sector.
Best Stock to Buy: In the current era, the market seems to be volatile. There is continuous selling pressure in the market before the budget. Global sentiments are very weak for the market. In such a situation, it is important for investors to keep a stock specific approach till the market becomes stable and invest money in only those stocks whose fundamentals are looking strong. Some such stocks are visible from the earnings season, in which brokerage houses are betting due to the better growth outlook. If you are also looking for some such stocks, then you can keep an eye on Star Cement from the cement sector. Brokerage house Emkay Global has given investment advice in this stock with a price of less than Rs 100.
How much return can I get
Brokerage house Emkay Global has set a target of Rs 120 for the share of Star Cement. The current price of the share is Rs 94. In this sense, it can give 27 to 28 percent return from the current price. If you see, this stock has not even run in the last 1 year. The movement of the stock has been flat during 1 year. At the same time, it has seen a decline of about 13 percent in 6 months. On the other hand, the stock has given a negative return of 27 percent in the last 5 years.
What’s positive with the company
The brokerage house says that Star Cement has maintained its dominant position in the North East market. The market share of the company there is close to 23 percent. The company has a strong presence there, strong brand recall and lack of capacity addition in that region by Pierce companies is positive for the company. The net cash position of the company is good. The company’s revenue has also increased by 31 percent and 37 percent on an annual and quarterly basis. Volume grew 37 per cent year-on-year and 42 per cent on quarterly basis to 0.87mt. At the same time, cement prices have increased by 3-4 percent on a monthly basis in January.
Cut in EBITDA Estimate
The brokerage house says that the EBITDA of Star Cement in the December quarter has decreased by about 20 percent on a yearly basis and about 6 percent on a quarterly basis. It stood at Rs 67.5 crore in the December quarter. This is 18-20 percent less than expected. EBITDA/tonne has declined by 41 per cent year-on-year to an all-time low of Rs 772. The brokerage house has cut its EBITDA estimates for FY22-24 by 6-14 per cent due to lower-than-expected performance in Q3 and higher input cost inflation. At the same time, the stock has been given a buying opinion but the target has been reduced from Rs 130 to Rs 120.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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