AnandRathi
Sanghi Industries (Buy)
CMP: ₹71.15
Target: ₹80
Key takeaways:
c) Management said the ongoing expansions are on track. The clinker plant is expected to be commissioned by March 2020. The grinding units (2 million tonnes in Kutch and 2 million in Surat) are also in process and are expected to be commissioned by June 2020. FY20 estimated capex is ₹650 crore, with maintenance capex of less than ₹50 crore.
Valuations: Strong demand with expected better pricing in its key region, and cost-optimisation measures would continue to drive Sanghi’s EBITDA/ton. The expansions in high-growth markets are on track, which would further improve its overall performance.
Risks: Lignite availability, rising costs.