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The India Cements Ltd. Stock Analysis

Small Cap
Evaluated by 2574 users | BSE: 530005 | NSE: INDIACEM |
Cement & Construction Materials
India Cements, a cement manufacturing company, was set up in 1946. It has set up seven plants across Tamil Nadu and Andhra Pradesh.It is largest manufacturer of cement in South India. India Cements owns 28% of the market share and is leader in south India. The cement manufacturer aims 35%...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
The India Cements Ltd. has not performed well majority of the past ten years indicating its past ten year financial track record is not good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 2.29%7.48%5.46%2.27%4.72%5.36%5.25%4.19%3.42%2.99%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 3,5014,2034,5974,4414,4244,8115,0795,1765,6285,058
Y-o-Y Gr. Rt.-20.1%9.4%-3.4%-0.4%8.8%5.6%1.9%8.7%-10.1%
Adjusted EPS (Rs.) 1.559.575.33-2.820.924.325.63.371.950.86
Y-o-Y Gr. Rt.-517.4%-44.3%-152.9%NA369.6%29.6%-39.8%-42.1%-55.9%
Book Value per Share (Rs.) 115.23116.27119.1113.72107.09162.12166.32168.09169.08174.73
Adjusted Net Profit 47.7294164-86.528.313317210460.426.6
Net Op. Cash Flow (Rs. Cr.) 281821666536579917812468413414
Debt to Cash Flow from Ops 8.753.294.545.985.523.443.66.627.918.54
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
The India Cements Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 4.2%2.7%-0.1%-10.1%
Adjusted EPS -6.3%-1.3%-46.5%-55.9%
Book Value per Share 4.710.31.73.3
Share Price 9.5% 12.1% -3.7% 96.9%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 1.167.224.02-2.180.763.093.412.021.160.5
Operating Profit Margin (%) 12.421.5517.9512.0315.4516.131713.5611.4111.64
Net Profit Margin (%) 1.3673.56-1.950.642.763.392.011.070.53
Debt to Equity 0.690.760.830.920.970.630.570.60.620.65
Working Capital Days 285260226250240212172207216260
Cash Conversion Cycle -10-10-11-9-1202122328
Entity Percentage Holding
Promoters 28.42%
Institutions 21.65%
Non-Institutions 49.92%
Pledged *43.6535.9745.7045.7027.2227.2227.2227.1827.1827.03
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of The India Cements Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that The India Cements Ltd. is a below average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of The India Cements Ltd.'s performance infers:

The India Cements Ltd. earnings have declined by -1.3%, whereas share price has appreciated 12.1% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of The India Cements Ltd. share prices over the last 10 years. Here is what we found out:

The India Cements Ltd. share price has appreciated 4.4% annually over the past ten years.

India Cements, a cement manufacturing company, was set up in 1946. It has set up seven plants across Tamil Nadu and Andhra Pradesh.

It is largest manufacturer of cement in South India. India Cements owns 28% of the market share and is leader in south India. The cement manufacturer aims 35% market share. It has distribution network of 10,000 stockists.  India Cements has capacity to produces 9 million tonnes cement per annum.

Products

India Cements manufactures

India Cements, a cement manufacturing company, was set up in 1946. It has set up seven plants across Tamil Nadu and Andhra Pradesh.

It is largest manufacturer of cement in South India. India Cements owns 28% of the market share and is leader in south India. The cement manufacturer aims 35% market share. It has distribution network of 10,000 stockists.  India Cements has capacity to produces 9 million tonnes cement per annum.

Products

India Cements manufactures Ready to Mix concrete (RMC)-53 grade cement.

Its Coromandel King, Sankar Sakthi and Raasi Gold are 53 grade OPC (Ordinary Portland Cement), which are high strength cement used for building runways, concrete roads and bridges.

The company's product - Coromandel, Sankar and Raasi are the 43 grade OPC.

Its Coromandel Super Power, Sankar Super Power and Raasi Super Power range of blended cement are high durability cement, suited for plastering and finishing works.

India Cements Sankar SRC (Sulphate Resisting Portland Cement) is basically used for construction of basements, coastal works, chemical factories, water treatment plants, etc.

In order to promote its corporate image, India Cements successfully bid for “Chennai Super Kings”, a Chennai franchise of the DLF-IPL 20/20 Cricket Tournament. The move also gave the company a platform to become a pan-India cement player.

India is world’s second largest cement producer after China. It has total capacity of over 200 million tonnes (MT) with an increase in infrastructure projects, roads and housing facilities there an anticipated growth in the cement industry.

Milestones

  • 1946 Incorporation of The India Cements Limited. 
  • 1949 - Commissioning of first Cement plant at Sankarnagar-Installed capacity 1 lac tonnes per annum.
  • 1963 - Commissioning of second Cement plant at Sankaridrug-Installed capacity 2 lac tonnes per annum.
  • 1969 - Capacity expansion at Sankarnagar touches 9 lac tonnes per annum. Awarded Merit Certification for Outstanding Export Performance (1968-1969).
  • 1971 - Capacity Expansion at Sankari Durg to 6.00 Lakh tonnes per annum.
  • 1990 - Acquisition of Coromandel Cement plant at Cuddapah-Installed Capacity rises to 2.6 million tonnes per annum. The India Cements Ltd. becomes the largest producer of Cement in South India. Conversion of Sankarnagar Plant to Dry Process with the increased capacity of 1.00 million tonnes per annum.
  • 1991 - India Cements ventures into Shipping. Sets up a Shipping Division.
  • 1994 - ISO 9002 Certification for Sankarnagar plant. Floats successfully US$ 50 million GDR issue.
  • 1995 - Announces issue of 1:1 Bonus shares.
  • 1996 - India Cements' green field cement plant at Dalavoi commences commercial production. Installed capacity 0.9 million tonnes per annum. 
  • 1997 - India cements acquires Aruna Sugars Finance Ltd.Renamed as India Cements Capital & Finance. India Cements acquires Cement Plant of Visaka Cement Industry, at Tandur, Ranga Reddy district of Andhra Pradesh. Installed capacity 0.9 Million Tonnes.
  • 1998 - India Cements acquires Cement Corporation of India's Yerraguntla Cement Plant at Andhra Pradesh. Installed capacity 0.4 Million Tonnes. India cements acquires Raasi Cement Ltd., at Nalgonda District of Andhra Pradesh.Installed capacity 1.8 million tonnes.
  • 1999 - India Cements acquires Cement Plant of Shri Vishnu Cement Ltd., at Nalgonda District of Andhra Pradesh. Installed capacity 1.0 Million Tonnes. Turnover sails over the Rs. 1000 crore mark.
  • 2001 - India Cements divests its stake in Sri Vishnu Cement Limited. Group's overall capacity reaches 9 million tonnes.
  • 2004 - The Unique Waste Heat Recovery System for generation of power from waste gas at Vishnupuram Cement Plant was commissioned during November 2004, for a capacity of 7.7 MW of power. The company through its Special Purpose vehicle M/s Coromandel Electric Co Ltd has commissioned a (gas based) captive power plant at Ramanathapuram for a capacity of 17.4 MW and the same has started supplying power from the month of November 2004.
  • 2005 - The Company has successfully completed an equity issue in the international market during October 2005 by issuing 25,613,796 Global Depositary Shares (GDSs) at USD 4.3226 per GDS, (each GDS representing 2 underlying equity shares of Rs 10 each) and raised an amount of Rs 497 crores including a premium of Rs 446 crores. 
  • 2006 - The Company has issued unsecured Zero Coupon Convertible Bonds due 2011 (FCCBs) for US $75 Million to investors outside India at an initial conversion price of Rs.305.57 per share. 
  • 2007 - The Hon'ble High Court of Judicature at Madras vide its order dated 25th July 2007 sanctioned the Scheme of amalgamation of Visaka Cement Industry Limited with The India Cements. The Company has converted the Sankari plant from wet process to dry process and commissioned the plant. The Company has privately placed 2,07,89,000 equity shares at a price of Rs.285/- per share (including premium of Rs.275/- per share) by way of Qualified Institutional Placement in December 2007. 
  • 2008 - The Company has revived its shipping business with the purchase of two ships (dry bulk carriers) with a total capacity of 79843 DWT. The Company has successfully bid for the Chennai franchise of the DLF-IPL 20/20 Cricket Tournament - “Chennai Super Kings”. The Company has completed and commenced commercial production of one million tonne grinding plant at Chennai.
  • 2009 - The Company has completed and commenced commercial production of one million tonne grinding plant at Parli (Maharashtra). The Company’s subsidiary, namely, Trishul Concrete Products has completed and commenced commercial production of one lakh Cu.M ready mix concrete Plant at Hyderabad (Andhra Pradesh). The II line of 1.2 MT at Malkapur was commenced operations from March 2009. The upgraded capacity of kiln I to 3000 TPD (1700 TPD) at Vishnupuram started functioning from April 2009.
  • 2010 - ICL Financial Services Limited (ICLFSL), the Company’s wholly owned subsidiary, acquired 60.89% (including shares acquired under open offer) of equity share capital of Indo Zinc Limited (IZL). Consequently, IZL became a subsidiary of ICLFSL and ultimate subsidiary of the Company in January, 2010.  The Corporate office of the company was shifted in February, 2010 to its own building “Coromandel Towers” at 93, Santhome High Road, Karpagam Avenue, MRC Nagar, Chennai 600 028. The Company privately placed in March, 2010 2,45,94,000 equity shares at a price of Rs.120.20 per share (including premium of Rs.110.20 per share) to Qualified Institutional Buyers. The Company’s cricket franchise “Chennai Super Kings” has won IPL III Trophy in April 2010.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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