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Anand Rathi
ITD Cementation (Buy)
CMP: ₹132.85
Target: ₹190
ITD Cementation India is involved in construction and civil engineering. The company is engaged in construction of a range of structures, which include maritime structures, mass rapid transport systems (MRTS), airports and other foundations.
A strong 25 per cent Q1 FY19 revenue growth was a sign of the shape of things to come for ITD Cementation. Q2 FY19 is even better with even stronger revenue growth, implying execution is gathering pace with each passing quarter. The quarter could have been better on order additions, but a healthy L1 status and a buoyant opportunity landscape suggest better days ahead.
With its strong order backlog (and good progress in new orders), a buoyant opportunity landscape and a healthy balance sheet, the future looks bright. The fall in the stock price (about 17 per cent in three months, about 29 per cent in six) renders it attractive. Thus, we upgrade it to a Buy.
Risk: Any slower-than-expected execution.
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