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Shree Cement Ltd.

Large Cap

Evaluated by 917 users |

BSE

: 500387 |

NSE

: SHREECEM |

Cement & Construction Materials

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Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
10 Year X-Ray
MoneyWorks4me Colour Coding
Value Creation To be investment worthy, a company has to create a shareholder value in excess of its cost of capital employed. VCI (Value Creation Index) shows how efficient has the company been in doing this.
Value Creation Index: Colour Rating Guide
  • >0.25 : Very Good
  • 0 to 0.25 : Somewhat Good
  • <0: Not Good
 Mar'04Mar'05Mar'06Mar'07Mar'08Mar'09Mar'10Mar'11Jun'12Jun'13
Return on Capital Employed
The return on capital employed gives a sense of how well a company is using its money to generate returns.
5.87%6.76%4.08%17.12%18.7%27.34%23.06%8.65%17.86%21.11%
Value Creation Index
The difference between ROCE and WACC as a Proportion of WACC reveals the extent of value created by a company.
Ie. (ROCE-WACC)/WACC
ROCE is Return on Capital Employed
WACC is Weighted Average Cost of Capital
-0.45-0.38-0.730.100.281.420.93-0.320.34NA
Growth Parameters Growth Parameters help gauge a company's growth in the past 10 years. A value creating company needs to grow at a sustainable pace to continue creating value.
For Net Sales and EPS Growth Rate
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
For Debt To CFO
  • 0 to <1.5 : Very Good
  • 1.5 to <3 : Somewhat Good
  • >3 or <0: Not Good
Net Sales (Rs. Cr.)
Net Sales is calculated by deducting excise duty, sales tax and other such deductible indirect taxes from the gross sales of a company.
4946026971,4062,1092,7113,6323,5124,7995,682
Y-o-Y Gr. Rt.-21.8%15.7%101.8%50.1%28.5%34%-3.3%36.7%18.4%
Adjusted EPS (Rs.)
Adjusted Earning per Share is the company’s net profit per share after adjusting for extra-ordinary/exceptional items
3.888.815.2450.6481.83169.28194.0561.66141.9265.06
Y-o-Y Gr. Rt.-127.1%-40.5%866.4%61.6%106.9%14.6%-68.2%130.1%86.8%
Book Value per Share (Rs.)
The total value that a company will fetch upon liquidation (if it is closed down), after settling all obligations is called its Book Value. Book value of a company includes only tangible assets. Book value allocated to each outstanding share is called Book Value per share
71.7583.185.05130.48193.13347.33526.23570.09627.771,103.23
Adjusted Net Profit Adjusted Net Profit is a measure of company's profitability after accounting for all costs and adjusting for one time events. 13.530.718.2176285590676215494923
Net Op. Cash Flow (Rs. Cr.)
This refers to the amount of cash a company generates from the revenues less operating expenses.
64.92002114616638061,2541,0741,2811,260
Debt to Cash Flow from Ops
Debt to CFO (Cash Flow from Operations) conveys the number of years it will take for a company to repay its debt, given the cash generated from operations.
CFO: It is the amount of cash generated by the company through its core business operations without looking at the impact of its capital structure. It indicates whether the company is able to generate sufficient cash from its operations to maintain and run its operations.
5.381.481.762.022.011.861.681.751.351.02
CAGR
The Growth rate helps you understand how the company has performed over different time frames.
CAGR Colour Code Guide
CAGR Colour Code Guide
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales
Net Sales is calculated by deducting excise duty, sales tax and other such deductible indirect taxes from the gross sales of a company.
31.2%21.9%16.1%18.4%
Adjusted EPS
Adjusted Earning per Share is the Company’s net profit per share after adjusting for extra-ordinary/exceptional items.
59.9%26.5%11%86.8%
Book Value per Share
The total value that a company will fetch upon liquidation (if it is closed down), after settling all obligations is called its Book Value. Book value of a company includes only tangible assets. Book value allocated to each outstanding share is called Book Value per share
35.541.72875.7
Key Financial Parameter The key financial ratios show the growth and sustainability of the Value Creation Index.
Performance Ratios: Colour Rating Guide
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
Debt to Equity Colour Rating Guide
  • 0 to 1 : Very Good
  • >1 to 2 : Somewhat Good
  • >2 or <0: Not Good
Return on Equity (%)
Return on Equity shows the amount of net profit generated as a percentage of shareholders equity. 
ROE measures a company's profitability over the money shareholders have invested. 
3.988.865.1841.2848.4562.6444.4311.2526.1828.08
Operating Profit Margin (%)
Operating Profit Margin shows how much profit a company makes (before interest payment and taxes) on sales. It is advisable to look at the change in a company’s operating margin over time and compare the company's yearly or quarterly numbers to those of its competitors.
26.9828.7128.4642.0840.9635.1841.4125.2727.4527.47
Net Profit Margin (%)
NPM (Net Profit Margin) is the ratio of profit, net of taxes and interests to sales. It is advisable to look at changes in a company’s NPM over time and to compare them with the competitor’s NPM.
2.745.12.6212.5513.5221.7618.616.1210.316.25
Debt to Equity
This ratio indicates the ratio of equity to debt the company employs to finance its operating assets.
1.41.031.262.051.981.241.150.950.790.34
Working Capital Days
This is the number of days that a company will take to convert its working capital into revenue.
927875707894971136881
Cash Conversion Cycle
Cash Conversion Cycle is a company's net working capital (creditors, debtors and inventory) expressed in terms of days
312611-2-3010322736
What do we look at?
Management Assessment: An assessment of the trustworthiness of the management based
on 5 important parameters. These parameters are colour coded as Green (Very Good),
Orange (Somewhat Good) and Red (Not Good)
Percentage Holding
64.79%
15.88%
19.33%

Pledged *0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.00
*  Pledged shares as % of Promoter's holding (%)

Consistent increase in Net sales CAGR

SCL’s net sales are growing consistently in last nine years. The net sales have recorded CAGR of 26% over the last 9 years. The company has managed to translate this growth into its earnings. Its EPS has shown a CAGR of 45% over the 9 years period, and BVPS recorded a growth of 29.18% CAGR. This growth in profitability ratios was on account of rise in income from investments.

The performance of the Company w ... Read more

Consistent increase in Net sales CAGR

SCL’s net sales are growing consistently in last nine years. The net sales have recorded CAGR of 26% over the last 9 years. The company has managed to translate this growth into its earnings. Its EPS has shown a CAGR of 45% over the 9 years period, and BVPS recorded a growth of 29.18% CAGR. This growth in profitability ratios was on account of rise in income from investments.

The performance of the Company was affected during the year FY11 on account of low cement demand growth and increase in input costs. Fuel prices also witnessed a sharp rise leading to increase in its power and fuel cost. Gypsum and fly ash cost also increased. As a result, the operating margins of the Company dipped during the year resulting in drop in profits. However, in FY12 demand has shown revival and company has recorded robust growth of over 30% in revenues on the back of strong cement volumes and boost to power segment. So on the whole company has shown excellent growth in revenues in last 10 years.

Margins Declined recently

Company recorded very healthy OPM margins in the period from FY07 – FY10 on the back of strong operational efficiency. But OPM has fallen from 41.41% in FY10 to 25% in FY11 on account of rise in cost of production which is mainly driven by increase in Power and Fuel cost. Its NPM has also shown a peak of ~21% in FY09 and since then declined to ~6% in FY12, on the back of increase in interest payments by the company. On the whole rising input costs are exerting pressure on company margins in last couple of years.

Declining ROE and ROIC

ROE and ROIC of the company have declined in last year (FY11) after reaching a peak of 62% and 28% respectively, in FY09. Company recorded sustained growth in return ratios till FY10, but they decline recently as net profits drastically dropped in FY11.

Efficient Operations

Company has managed to reduce its selling and distribution expenses on the back of efficient reduction freight & forwarding charges. It has been reduced by over 47% in last 10 years. Freight charges have reduced substantially on account of transport freight bidding system and e-procurement system. Online communication between all company locations have become faster with the use of MPLS VPN.

Poor Working Capital Management

Company’s cash flows have declined in last couple of years due to poor working capital management. Its payable days have declined and inventory days have gone up.

Although company has recorded rising revenues in past 10 years, falling margins and poor return ratios in recent times are not good indicators of company’s financial state.On the whole, SCL’s 10 year performance appears to be ORANGE (‘Somewhat Good’).

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