JP Morgan initiates coverage on 5 cement stocks, sees upside of up to 31%

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Global brokerage firm JP Morgan has initiated coverage on Ultratech Cement and 3 other cement stocks with an upside potential of up to 31% on the belief that the sector is set for consolidation with the larger players likely to become more aggressive.

“India cement sector looks set for consolidation with the larger players turning aggressive,” said JP Morgan in its note.

Below is the list of cement stocks on which the global brokerage firm has initiated coverage:

Ultratech Cement:

JP Morgan has initiated coverage on Ultratech Cement with an ‘overweight’ rating and a target price of Rs 13,750.

This indicates an upside potential of 24% over the closing price of Rs 11,060.90 on Friday.

Ambuja Cements:

The global brokerage firm initiated coverage on Ambuja Cements with a ‘neutral’ rating and a target price of Rs 590.This indicates an upside potential of 3% over the stock’s closing price of Rs 573.15 on Friday.

ACC:

JP Morgan initiated coverage on the stock seeing an upside potential of 31%, with an ‘overweight’ rating.

The target price is Rs 3,020.

Shree Cement:

JP Morgan is ‘neutral’ on Shree Cement and has given a target price of Rs 27,125 on the stock.

The target price indicates an upside of 11.4% over Friday’s closing price of Rs 24,340.

The foreign brokerage also stated that the urbanisation and infrastructure projects should boost medium-term demand and utilisation should remain stable, despite new capacity.

Also read: Hyundai IPO listing tomorrow, GMP surges to 5% over issue price

“The industry should recover from recent weakness as government capex grows 40% YoY, post-monsoon, and companies are trying to cut costs,” JP Morgan added.

Meanwhile, JP Morgan initiated coverage on Dalmia Bharat with an ‘underweight’ rating and a target price of Rs 1,550, citing concerns that the stock may struggle to improve utilisation.

The target price predicts a downside potential of 16% for the stock.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



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