STOCK IN FOCUS
* India Cements (ICL) gained over ~1.5% in Friday’s trade on the expectation of improvement in margins and demand scenario in forthcoming quarters.
* ICL drives over 80% of its total sales from Southern and Western markets, where realizations still appear to be firm despite seasonal overhang.
* We believe that improving operating synergies and strong realization environment in Western markets will continue to pay off with improvement in profitability.
* We believe that with the recent group restructuring, ICL is likely to harness RMC business and Trinetra’s cement division in a better way.
* Further, possible reduction in interest cost with loan repayment / refinancing / rating upgrade and likely demand improvement in Southern markets augur well for ICL in the long-term.
* We maintain our fundamental BUY rating on the stock with a Target Price of Rs225.
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