Sagar Cement & Control Print Nano Nivesh Stock Picks By ICICI-Direct

With the recovery in the southern region, we expect sales and EBITDA of Sagar Cement to grow at a CAGR of 25% and 60%, respectively, in FY15-18E. The EBITDA growth is expected to be driven by healthy realisation and lower freight cost. Sagar Cement is currently trading at an EV/EBITDA of 6x in FY17E and 5x in FY18E. With anticipated improvement in financial performance, we have assigned an EV/EBITDA multiple of 6-6.5x in FY18E, arriving at a target price of | 550-600/share

Control Print has recently commissioned a new manufacturing facility in Guwahati (capex | 25 crore). This facility is initially being ramped up for manufacturing consumables, which is a high margin business. Control Print has a lean balance sheet and strong return ratios (FY15 RoE: 20%, RoCE: 27%). Thus, with good demand drivers in place and increasing penetration of coders and markers, we expect sales and PAT to grow at a CAGR of 21.5% and 28.9%, respectively, in FY15-18E. We value CPL at | 625-660, i.e. 18-19x P/E on FY17E
and FY18E average EPS of | 34.8/share

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IDirect_ControlPrint_NanoNivesh