A worker carries a sack of cement under a conveyor in a warehouse in Ferozabad, Uttar Pradesh, India. (Photographer: Udit Kulshrestha/Bloomberg)

India Cements: Biggest Underperformer, Highest Return Potential

India Cements: Biggest Underperformer, Highest Return Potential

The worst-performing cement stock of 2018 is also the one with the best return potential.

Chennai-based India Cements Ltd. slumped 19 percent year-to-date, while pan-India players including Ambuja Cements Ltd. dropped between 10-12 percent. South India-focused Ramco Cements Ltd. is the only cement stock to post gains in 2018, rising around 5 percent.

But once it comes to expected performance, the picture is very different. India Cements is expected to deliver over 30 percent returns in the next 12 months, according to the consensus estimate of analysts tracking the stock. UltraTech Cement Ltd. comes in second, with expected returns of 18 percent.

14 of the 23 analysts tracking India Cements have a 'Buy' rating on the stock, according to data compiled by Bloomberg.

Valuations Picture

India Cements trades at 7 times its financial year 2019-20 enterprise value to earnings before interest, taxes, depreciation, and amortisation - a discount to the industry average of 12 times.