Cement Sector Stock Tips: There is a declining trend in the shares of this giant of the cement sector. It has lost about 37 percent in five months from the one-year high. Market experts are expecting a further 40 percent fall in this. The brokerage has given it a sell rating due to weak December quarter results. Today it is trading with a fall of more than two percent.
INDIA CEMENTS’ EBITDA loss fell 160 percent year-on-year to Rs 6.6 crore in October-December 2022, while brokerage firm ICICI Securities estimated EBITDA profit. The reason for this was that the company failed to deal with the increased cost.
Cement Sector Stock Tips: The selling pressure in the shares of cement sector stock giant India Cements does not seem to be stopping. Its shares have lost 37 percent in about five months from their one-year record high and market experts are expecting a further 40 percent fall in it. The third quarter of the current financial year, October-December 2022, has not been great for the company, due to which domestic brokerage firm ICICI Securities Firm has retained its sell rating. The brokerage has fixed its target at Rs 112 (India Cements Target Price). Now it is available at the price of Rs 188.00 (India Cements Share Price) with a decline of 2.19 percent.
Why experts advised selling India Cements
India Cements’ EBITDA loss fell 160 percent year-on-year to Rs 6.6 crore in October-December 2022, while brokerage firm ICICI Securities had estimated EBITDA profit. The reason for this was that the company failed to deal with the increased cost. Its cost increased by 24 percent per tonne (Total cost/te) on an annual basis, but the realization increased by just 6 percent on an annual basis. Due to this, blended EBITDA per tonne declined by about 158 percent year-on-year. Volume grew by just 3.5 percent year-on-year.
According to the brokerage, the net debt to EBITDA ratio is expected to exceed 4x in FY24 and high price volatility in South India remains a concern. The brokerage has sharply cut its FY23-24 EBITDA estimate and maintained its sell rating, given the difficulties it is facing in meeting the cost escalation. The brokerage firm has also reduced its target price to Rs 112 per share from Rs 140 based on April-December 2022 results. However, if we talk about the risk, then if the demand increases or the prices go up, then there can be a rise in the prices of the shares.
Money was doubled in three months last year
Shares of India Cements were at Rs 145.55 last year on June 20, 2022. After this, it jumped almost 105 percent in the next three months to reach Rs 298.45 on 20 September 2022. However, its rally could not be sustained and so far in five months, it has slipped 37 percent to Rs 188. So far this year in 2023, it has broken about 15 percent. Now experts are seeing the possibility of a further decline of 40 percent in it.
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