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AMSEC
KCP (Buy)
CMP: Rs 28.5
Target: Rs 55
KCP Ltd posted another disappointing quarterly performance in Q4 as all the three core businesses witnessed acute stress. The only saviour was Vietnamese sugar business which is generating robust cash flow easing pressure on the company. Though improved capacity utilisation lifted cement volumes, muted realisation and increased power and fuel and freight cost deterred the profitability. Slow economic growth, delayed industrial capex and acute power shortage in Andhra Pradesh will continue to weigh on the company’s performance over the medium-term. Nevertheless, the company is expected to post improved performance once power plant gets commissioned.
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