Buy Heidelberg Cement India target Rs 150: Reliance Securities

Reliance Securities has buy call on Heidelberg Cement India with a target price of Rs 150.
The current market price of Heidelberg Cement India is Rs 131.
Heidelberg Cement India, incorporated in the year 1958, is a Mid Cap company (having a market cap of Rs 2994.69 crore) operating in Cement sector.
HeidelbergCement India (HCIL) gained over 4% in yesterday’s volatile market on the expectation of healthy 1QFY18 numbers mainly to be aided by healthy realizations in Central markets.
Central region is likely to see a realizations improvement of 1.5% YoY and 4.5% QoQ in 1QFY18.
Further, with no meaningful capacity addition coming in Central region in next 2-3 years, HCIL would hit a sweet spot to improve its financials in ensuing years, on the back of healthy demand outlook owing to favourable monsoon, likely uptick in government spending in UP & MP and resolution of sand mining issues.
Though likely increase in supply from units acquired by UltraTech from Jaypee may pose a risk in the near term, expected pickup in demand from markets like Uttar Pradesh and other neighboring states may work as balancing factors.
Further, likely de-leveraging of balance-sheet along with better operating performance is expected to result in improvement in return ratios.