Thursday, November 13, 2014

SAURASHTRA CEMENT LTD (502175 ) :- A TURNAROUND STORY

Dear friends,

  Now we are looking stock from cement sector, Cement sector is defensive sector in stock market also it is a potential growth sector in forward. We are discussing today is a Gujarat based company 

 

 

               " SAURASHTRA CEMENT LTD".











The Indian arm of the Mehta Group has two Cement and Building materials companies: Saurashtra Cement Limited and   Gujarat Sidhee Cement Limited.

Both companies have won prestigious national awards in the Indian cement industry and are ISO 9001:2000 and ISO 14001  certified. Their products conform to BIS, BS, SLSS and SABS standards and are marketed / distributed in bags, jumbo bags, trucks and by bulk. The companies employ multi modal transportation - road, rail and sea - to suit customers' requirements and their markets are located in Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, the West Coast of India and overseas markets in Africa, the Indian Ocean and Middle East countries.

SAURASHTRA CEMENT manufactures and markets cement under the brand name 'HATHI'. The Company is also a recognized Export House and has won the Indian cement industry's prestigious national award. Besides standard products, the company also manufactures 'Sulphate Resistant Portland Cement' for specific applications.

 

Achievements

 

ISO 9001:2008 Certification from RWTUV, Germany for Quality Systems.

ISO 14001:2004 Certification from RWTUV, Germany for Environmental Management System.

National Productivity Award for Best Production Performance 1995-96.

National Productivity Award for Second Best Productivity in 1994-95, 1995-96 & 1996-97.

CAPEXIL Award for Export Recognition, 1995

Indira Gandhi National Memorial Award for Excellence in Indian Industry.

In addition to the above, the Company has received about 50 Awards from Indian Bureau of Mines and Director General of Mines Safety for Mining in relation to Pollution Control, Soil Management, Safety, Operations & Aforestation etc.

PRODUCTS

Hathi Cement manufactures and distributes its range of cement. We aim to optimize distributors across all of our markets and providing a complete solution to customer's needs at the lowest possible cost, an approach we call strategic integration of activities.

  Cement is made from a mixture of 80 percent limestone and 20 percent clay. These are crushed and ground to provide the "raw meal”, a pale, flour-like powder. Heated to around 1450° C (2642° F) in rotating kilns, the “meal” undergoes complex chemical changes and is transformed into clinker. Fine-grinding the clinker together with a small quantity of gypsum produces cement. Adding other constituents at this stage produces cements for specialized uses.


         

  Saurastra Cem is in the Cement - Major sector. The current market capitalisation stands at Rs 280.53 crore.The company has reported a standalone sales of Rs 164.77 crore and a Net Profit of Rs 15.70 crore for the quarter ended Jun 2014.


The company management includes M N Mehta - Chairman, Jay M Mehta - Executive Vice Chairman, M S Gilotra - Managing Director, Alexander Shaik - Nominee Director, Anil Kaul - Special Director, V R Mohnot - Director - Finance, Hemang D Mehta - Director, M N Rao - Director, S V S Raghavan - Director, B P Deshmukh - Director, K N Bhandari - Director, Jayant N Godbole - Director, Hemnabh Khatau - Director, Bimal Thakkar - Director, P K Behl - Additional Director, Bhagyam Ramani - Additional Director. 

 

Details of company HERE





Balance Sheet of Saurastra Cement

------------------- in Rs. Cr. -------------------

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

12 mths 12 mths 12 mths 12 mths 15 mths
Sources Of Funds



Total Share Capital 58.07 58.07 58.07 58.07 58.07
Equity Share Capital 51.19 51.19 51.19 51.19 51.19
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 6.88 6.88 6.88 6.88 6.88
Reserves 112.49 92.03 -94.77 -75.68 -18.62
Revaluation Reserves 0.00 0.00 3.31 5.52 7.79
Networth 170.56 150.10 -33.39 -12.09 47.24
Secured Loans 43.56 120.19 279.60 265.87 258.46
Unsecured Loans 0.00 0.00 0.00 0.00 0.00
Total Debt 43.56 120.19 279.60 265.87 258.46
Total Liabilities 214.12 270.29 246.21 253.78 305.70

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

12 mths 12 mths 12 mths 12 mths 15 mths
Application Of Funds



Gross Block 547.43 552.16 548.57 553.73 551.07
Less: Accum. Depreciation 358.78 345.57 329.62 313.40 288.51
Net Block 188.65 206.59 218.95 240.33 262.56
Capital Work in Progress 59.10 64.28 81.08 85.48 82.77
Investments 18.80 18.80 18.80 18.79 19.10
Inventories 56.74 66.66 57.85 48.58 32.31
Sundry Debtors 16.11 13.93 17.69 24.99 18.30
Cash and Bank Balance 40.47 34.10 4.24 2.44 6.50
Total Current Assets 113.32 114.69 79.78 76.01 57.11
Loans and Advances 33.08 30.85 69.29 62.30 100.86
Fixed Deposits 0.00 0.00 2.38 6.00 11.08
Total CA, Loans & Advances 146.40 145.54 151.45 144.31 169.05
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 187.11 154.34 214.54 226.18 214.90
Provisions 11.72 10.59 9.54 8.94 12.88
Total CL & Provisions 198.83 164.93 224.08 235.12 227.78
Net Current Assets -52.43 -19.39 -72.63 -90.81 -58.73
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 214.12 270.28 246.20 253.79 305.70
Contingent Liabilities 24.65 20.52 35.62 34.99 33.68
Book Value (Rs) 31.98 27.98 -8.51 -4.78 6.36


 RISKS FACTORS :-  Promoter holding good 64.42% stake in company, but they pledge 99% of holding  for company expansion purpose, company turnaround recent year this is not big a concern but investors should remember this point.








  Company posted profits in sept 2014 q2 results (june to sept is monsoon session) 140CR sales compared 116cr last year net profit of 1.93cr from 11cr loss last year. 2014-15 half year sales jump to 323cr from 231cr net profit 17.5cr compared to loss of 8cr last year. so expected EPS was full year of 2014-15 around 7.

    Cement sector PE is around 30 but saurastra cement trading @ just 3.87 PE, compare to it's peer group this stock is really undervalued ,Book value is 32 stock trading only BSE @ 55 level one can buy for this stock @ current price for medium to long term stock should cross 3 digit mark in near term.

 

Disclosure :- It is safe to assume that, i have vested interest in it as a share holder.




































































































































































































































 






                                                                                                                                      



           
                                       

                                                                                                                             

15 comments:

  1. Sir can we buy your recommendation store one at current price ? Or is their any more corrections ? Please guide :)

    ReplyDelete
    Replies
    1. Q2 is bellow expectations,so if you have patience to wait for next result then buy it may range bound 37to 45

      Delete
  2. Sir thanks for your selfless service ,I have one suggestions kindly give stock recommendations in two times in a week,this is my request

    ReplyDelete
  3. Thank you sooo much for your time :)
    Have recovered my losses from your dynamic products :) thanks a ton :)

    ReplyDelete
  4. Sir can I buy saurastra cement @current price?or wait for correction

    ReplyDelete
  5. Respected sir

    Can you please comment your views on the result of one of your reccemondation ROLLATAINERS .Seems that this company sales became very week

    ReplyDelete
    Replies
    1. Rollatainers update blog, I have given reply for this comments

      Delete
  6. Promoter Pleding in Saurashtra Cement is big concern...wht u say

    ReplyDelete
  7. Dear VG ...Promoter pledged almost their full holding which is not a gud sign for any co...how u looks it

    ReplyDelete
    Replies
    1. Company right now profit making and promoter holding nearly 65% is good think also company announced at their last agm before next financial year company become debts free,so company itself support share price for avoid any margin triggered their pledge shares.This is my own views,please confirm with certified person.

      Delete
  8. Can we enter in saurastra cement or wait to correct it further?

    ReplyDelete
  9. Can we buy at current level or need to wait for correction?

    ReplyDelete
  10. 20% upper circut hit today. Whats the buzz sir ?? shall we hold it for long term or come out in this rally. Please your suggestion is required.

    ReplyDelete
  11. Will This Buy Back offer at 33/- approx positive for its Shares Price or not? What is your views on its overall announcement.

    ReplyDelete