Heidelberg Cement India Ltd (Rs 42)
(BSE Code- 500292 NSE Code- HEIDELBERG)
(P/E- 5.2, Market Cap - Rs950 cr, Promoters' stake - 68.55%)
A MNC cement stock available at the P/E of 5.2
Heidelberg Cement India Ltd(HCL)(earlier know as Mysore Cement) is now owned 68.55% by Heidelberg Cement AG, Germany. The parent Euro MNC Heidelberg Cement is one of the three biggest cement producers in the world along with Holcim (which owns ACC, Ambuja) and La Farge, which has an unlisted presence in the country. HCL has two units - one at Ammmsandara in Mysore and another at Damoh in Madhya Pradesh. With up gradation and balancing at Damoh, the total capacity of MCL increased to 23 lac tpa in 2004-05
In 2006, Heidelberg took over the co. from Birlas, infused a sum of Rs 360 crore by making a preferential allotment of 6.5 crore shares to itself at a price of Rs 54 per share and cleared the debts, making the co. debt free. Thus not only has HCL become debt free, it has come out of the purview of the BIFR as well., with long term institutional and bank debts paid off. The stake was taken at Rs 54 per share. In December 2006, Heidelberg made an offer to the shareholders of Mysore cement to acquire 22.15% stake at Rs 58 per share. Within a short period of 3 months the Heidelberg led team accomplished a clean turn around at Heidelberg Cement India Ltd.
From Rs 10 cr, loss in calendar year 2006, the company posted a 29% YoY rise in net profit to Rs 125.55 cr, in the year ended Dec. 2008. Sales rose 35.36% to Rs 804.49 cr. The company posted a EPS of about Rs 7.94 on a equity of 158 cr. for CY2008. For the half year ended June 2009, the company posted a net profit of Rs 93.47 cr. (up 53%) on net sales of Rs 531.52 cr.(up 53%). The half yearly EPS on a expanded equity of 226.62 cr. stands at Rs 4.13. The 2 mn tpa cement producer Heidelberg cements sells for Rs 950 cr. in market cap(Equity Rs 226 cr, CMP Rs 42), and cash in deposit accounts of Rs 170 cr.-Heidelberg Cements sells for a net value of Rs 780 cr - one of the cheapest cement stocks in India.
The stock looks a good investment pick at current levels considering its fundamentals, CY09E earnings (Rs 8) and future prospects. With Heidelberg at the helm of operations, the performance is bound to improve in coming years. Going forward, more measures for efficiency increase and cost reduction will be implemented, and focus will be on further, gradual expansion in capacities. All in all it's a cement MNC stock available at the P/E of 5.25. The financials, debt free status of the company, its parentage and plans to raise capacity to over 6 mn tpa makes it the most interesting cement stock around. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-50% over the next 6-8 months.
Source: Internet (By Sanjay Chaabria)
(BSE Code- 500292 NSE Code- HEIDELBERG)
(P/E- 5.2, Market Cap - Rs950 cr, Promoters' stake - 68.55%)
A MNC cement stock available at the P/E of 5.2
Heidelberg Cement India Ltd(HCL)(earlier know as Mysore Cement) is now owned 68.55% by Heidelberg Cement AG, Germany. The parent Euro MNC Heidelberg Cement is one of the three biggest cement producers in the world along with Holcim (which owns ACC, Ambuja) and La Farge, which has an unlisted presence in the country. HCL has two units - one at Ammmsandara in Mysore and another at Damoh in Madhya Pradesh. With up gradation and balancing at Damoh, the total capacity of MCL increased to 23 lac tpa in 2004-05
In 2006, Heidelberg took over the co. from Birlas, infused a sum of Rs 360 crore by making a preferential allotment of 6.5 crore shares to itself at a price of Rs 54 per share and cleared the debts, making the co. debt free. Thus not only has HCL become debt free, it has come out of the purview of the BIFR as well., with long term institutional and bank debts paid off. The stake was taken at Rs 54 per share. In December 2006, Heidelberg made an offer to the shareholders of Mysore cement to acquire 22.15% stake at Rs 58 per share. Within a short period of 3 months the Heidelberg led team accomplished a clean turn around at Heidelberg Cement India Ltd.
From Rs 10 cr, loss in calendar year 2006, the company posted a 29% YoY rise in net profit to Rs 125.55 cr, in the year ended Dec. 2008. Sales rose 35.36% to Rs 804.49 cr. The company posted a EPS of about Rs 7.94 on a equity of 158 cr. for CY2008. For the half year ended June 2009, the company posted a net profit of Rs 93.47 cr. (up 53%) on net sales of Rs 531.52 cr.(up 53%). The half yearly EPS on a expanded equity of 226.62 cr. stands at Rs 4.13. The 2 mn tpa cement producer Heidelberg cements sells for Rs 950 cr. in market cap(Equity Rs 226 cr, CMP Rs 42), and cash in deposit accounts of Rs 170 cr.-Heidelberg Cements sells for a net value of Rs 780 cr - one of the cheapest cement stocks in India.
The stock looks a good investment pick at current levels considering its fundamentals, CY09E earnings (Rs 8) and future prospects. With Heidelberg at the helm of operations, the performance is bound to improve in coming years. Going forward, more measures for efficiency increase and cost reduction will be implemented, and focus will be on further, gradual expansion in capacities. All in all it's a cement MNC stock available at the P/E of 5.25. The financials, debt free status of the company, its parentage and plans to raise capacity to over 6 mn tpa makes it the most interesting cement stock around. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-50% over the next 6-8 months.
Source: Internet (By Sanjay Chaabria)
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