We hereby present you our investment idea for Equity Investment i.e “Pick of the Week”. A thorough analysis of company, industry and economy goes behind our stock ideas for you. With the “Pick of the Week”, you may earn superior returns in stock market over a time horizon of 6 – 9 months.

INVESTING RATIONALE

• Better realisations despite low demand off-take: The company has reported Higher profitability on better realization as cement prices increased across regions in Q1. Cement volumes improved 2% YoY to 17.9 mn including newly-acquired Nathdwara plant (formerly Binani Cement).

• Focus on integration and sweating of acquired assets: Nathdwara Cement (formerly Binani Cement) is fully integrated with UltraTech. Capacity utilization for Q1 at 60% – low ,due to outage. The 21.2 mnt acquired JP Assets is now EPS accretive with 68% capacity utilization; Century Cement is expected to merge in Q2FY20 pending few approvals. The management expects increased contribution via trimming cost and integrating acquired assets. Also there are no further plans of organic/inorganic expansion.

• Demand recovery and increased government focus on infra: The recovery in demand post monsoon and expected government spending will augur well for the company.

• We maintain a BUY with a target price of Rs. 4,247.