Up 2.3 Times in 1 Year: Analysts remain bullish on this multibagger infrastructure stock; here is why

Domestic equity benchmarks continued to rise for a second straight session on Thursday, recovering much of their losses on June 4 when preliminary election data sent shockwaves to Dalal Street as the BJP failed to win a majority in the Lok Sabha in stark contrast to several exit polls. As of June 6, the Sensex and the Nifty stood 4,840.1 points and 1,540 points above their relection results day lows, respectively. On June 4, Dalal Street investors lost about Rs 31 lakh crore in wealth as the market capitalisation of BSE-listed companies slumped to Rs 394.8 lakh crore, according to exchange data. 

As the bulls are once again on the lookout for shares to buy to gain from the wild swings in the market, many analysts are bullish on a multibagger midcap stock that has already rewarded investors with a return of 130 per cent in a year. 

The stock is ITD Cementation. 

Why is HDFC Securities bullish on ITD Cementation?

HDFC Securities has maintained a positive outlook on ITD Cementation citing the company’s healthy order book, strong execution capabilities, robust order pipeline, and stable EBITDA margins. 

“The company has strong financials and a healthy balance sheet compared to its peers, which gives it a competitive advantage in bidding for large new projects and reporting healthy revenue growth over the next few years due to promising revenues from multiple large projects and smooth execution,” according to the brokerage.

Analysts at the brokerage expect the company's revenue, EBITDA, and PAT to grow at CAGRs of 18 per cent, 24 per cent, and 40 per cent, respectively, over the FY24–FY26 period.

Key risks 

The brokerage has highlighted the following risks:

• An increase in raw material and input costs may impact operating margins 
• Slow execution pace of existing orders
• Relatively higher interest costs compared to industry peers
• Lower advances from customers and high capex requirements for order book execution result in increased debt levels
• 80 per cent of the revenue comes from eight clients, posing a significant concentration risk
• Slow order inflows in FY24 compared to earlier years and in Q4FY24 compared to earlier quarters

ITD Cementation share price target

HDFC Securities recommends buying ITD Cementation shares for a base case target of Rs 439 and a bull case target of Rs 484 within the next 2-3 quarters.

Analysts at the brokerage also suggest adding positions on dips between Rs 355 and Rs 363.

Sethi Finmart recommends buying ITD Cementation shares 

Vikas Sethi of Sethi Finmart also recommends buying ITD Cementation shares for a target of Rs 445 with a stop loss at Rs 410. 

Catch all the latest stock market updates here. For all other news related to business, market, tech and auto, visit Zeebiz.com.