Fundamentals

HEIDELBERG CEMENT INDIA

Ticker: 500292 BUY: Rs.163 Target: Rs.189

The company is a key player in central India having well-known cement brand ‘MyCem Cement'. Over the last three years, its net profit has grown at a CAGR of 57.4 per cent . In Q1FY19, the revenue was up by 22 per cent YoY, led by 15 per cent YoY growth in volumes. Its EBITDA increased by 78 per cent YoY due to operating efficiency and the margin stood at 22.1 per cent . The PAT for the quarter jumped by 219 per cent to Rs 51 crore due to higher operating profits. The issue of ban on sand mining in UP has been resolved, which has per cent company's operations. Also, MP and UP are part of top beneficiaries of affordable housing and upcoming state elections in Rajasthan and Chhattisgarh would drive the growth further. Considering the robust growth and an uptick in demand, we recommend it as a BUY. 



MAHINDRA CIE AUTOMOTIVE

Ticker: 532756 BUY: Rs.288.75 Target: Rs.320

Mahindra CIE is a diversified auto ancillary company. Its geographical business mix consists of Europe 60 per cent and India 40 per cent . It follows calendar year as its financial year. In Q2CY18, its revenue was up by 44.6 per cent YoY to Rs 650 crore, led by demand from PV segment, tractors and 2W industry. The EBITDA rose by 90.9 per cent YoY and margin stood at 12.5 per cent as against 9.5 per cent in Q2CY17. The PAT jumped by 148.5 per cent YoY to Rs 43.9 crore from Rs 17.6 crore, while PAT margin stood at 6.7 per cent . It is optimistic about higher growth from international markets, i.e. Europe, where the quarterly sales grew by 32 per cent YoY. It plans to invest Rs 700-800 crore in Indian market over the next two years. Considering strong growth in both domestic and international business, we recommend it as a BUY.