Shree Cements Ltd said it received certificate of registration for ISO 14001 by British Standards Institutions, UK.
Its rich valuation with a PE of 62 times raises downside risk for investors
'East Bengal have a great legacy. We all want Mohun Bagan and East Bengal to play in ISL. I am very happy that Mohun Bagan are playing and we all want East Bengal to play in the ISL too.'
With no signs of an end to the ongoing crisis in Indian hockey, leading cement manufacturer Shree Cement on Tuesday said it is willing to provide financial support so that players can resume training for the upcoming World Cup to be held in New Delhi next month.
The company, which had not ventured out of Rajasthan so far, obtained licences for mining limestone in three states. However, the company says land acquisition is proving a problem.
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With over 10 deals announced in 2024, the cement sector logged the highest number of pacts, including acquisitions and fresh financial investments, in a single calendar year since 2014, with the combined value of investments over $3.5 billion. During the year so far, 11 deals have been announced, according to Bloomberg data.
Cement manufacturers' show during the June 2023-ended quarter (Q1FY24) has indicated an intensified slugfest for market share. For instance, Dalmia Bharat (Cement) said it has lost market share in eastern India owing to lack of price discipline. Industry analysts also said that the seasonal weakness in cement prices for Q1 is showing up earlier than usual.
The Indian cement industry is hopeful of greener pastures after a long period of stress led by pricing pressures and other factors. The second half of FY25 is expected to bring respite due to price hikes, cost benefits and higher volumes, said analysts. The optimistic momentum also makes cement stocks attractive, analysts added, advising to buy dips following a period of bearish sentiment in these stocks.
Acceleration in demand, together with marginal price hikes of about 2-3 per cent by cement companies in the October-December quarter (third quarter, or Q3) of 2022-23, may not be enough to cushion the impact of high input costs on the bottom line, reveal Bloomberg consensus estimates for the quarter. Year-on-year (YoY) net sales growth in Q3 will come in at nearly 7 per cent, shows Bloomberg data, while bottom-line growth will show a sharp decline of 25 per cent from a year ago. The earnings before interest, tax, depreciation, and amortisation (Ebitda) will likely decline by nearly 5 per cent versus a year ago, shows data.
BSE 200 companies together paid 5,819.75 crore as remuneration to their CEOs and directors in FY25, up from 5,352.8 crore a year earlier.
Of the top four companies, which collectively hold more than half of India's market share, two have pitted Shah Rukh Khan and Sunny Deol against each other.
UltraTech currently has 19% market share with Shree Cement commanding 22% of the market
The stocks are largely from sectors such as chemicals, finance and cement, which struggled earlier but the worse seems to be behind them.
The recent price correction in broader markets has hit cement companies hard. So far in the current month, smallcap firms like Visaka Industries, Andhra Cements NCL Industries, Sahyadri Industries, and KCP have lost 19.7 per cent, 14.3 per cent, 13.8 per cent, 13.5 per cent, and 11.5 per cent, respectively. On the contrary, largecap companies, while registering losses for the month, have seen a softer blow.
Analysts remain selective on cement stocks amid the likely government's capex push ahead of the scheduled general elections in May 2024. While UBS has initiated coverage on the Indian cement sector with an anti-consensus negative view and suggests investors sell select cement stocks on a rally, those at Nomura remain selectively bullish on the sector and prefer companies with large brownfield optionality and multi-region presence. In the near-term, UBS expects strong earnings of cement companies in the next two quarters to be driven by robust demand and margin tailwinds, but suggests any sharp uptick in stock prices could offer a good opportunity for booking profits in the related counters.
Shree Cement beats ACC in market value, Lupin ahead of Dr Reddy's Labs
Finance Minister P Chidambaram's efforts to bring down cement prices have finally borne fruit as cement manufacturers have introduced cuts in prices.
Cement companies witnessed speculative support from investors through FY23 amid hopes of a rebound. After capex announcements in the FY24 Budget, there was further interest due to expectations that government expenditure would boost earnings, besides a generic macro-recovery. Cement earnings were under pressure in FY22 and FY23 due to high raw material and fuel costs; muted demand prevented them passing on the higher cost.
Cement may get costlier by Rs 7 per bag of 50 kg because of the hike in freight rate by 5.79 per cent in Railway Budget today, but manufacturers of the building material said a final call will be taken after the Union Budget.
The cement industry continues to present a puzzle to investors.
With the increased death rate in the ongoing second wave of Covid-19, domestic cement companies are in no better condition than they were in the April-June quarter of FY21 when the country faced nationwide lockdown. "This wave has had high death rate which has impacted the business. "We are in no better situation than last (year) April. "Deaths of drivers, dealers, contractors and also employees have hit the industry really very hard since April (FY22)," M Ravinder Reddy, director of Bharathi Cements said.
The 100-stock largecap basket of Mutual funds (MFs) has seen a major reshuffle in the latest semi-annual reclassification with seven midcap stocks and four new listings earning the largecap tag. According to a report from Nuvama Alternative & Quantitative Research, the midcap stocks that have been upgraded include CG Power, Rail Vikas Nigam, ICICI Prudential Life Insurance, Polycab India, Indus Towers, Cummins India, and Info Edge.
Players like UltraTech Cement more expensive than ITC and HUL; others catching up fast.
The cement sector may be looking at better realisations and higher volume offtake going by the trends of the October-December quarter of the 2022-23 financial year (Q3FY23), a recent price hike, and the promise of a continued infrastructure thrust in FY24. In Q3, revenues rose by an aggregate of 17 per cent year-on-year (YoY), but Ebitda (earnings before interest, tax, depreciation and amortisation) per tonne, fell by 14 per cent YoY while profit after tax (PAT) rose by 23 per cent YoY. Expenses were up 30 per cent per tonne YoY - power and fuel costs in particular - and that's no surprise given the rise in fossil fuel prices.
In what could be a game-changing move for the struggling East Bengal, EPL giants Manchester United may end up taking the ownership of one of oldest football clubs in the country.
East Bengal finally got an investor with West Bengal chief minister Mamata Banerjee announcing on Thursday a joint venture of the century-old club with city-based Shree Cement company and making a strong pitch for its inclusion in the Indian Super League this year.
The possible acquisition of Holcim India business will be one of the biggest inbound corporate deals in the country. Currently, Walmart Inc.'s $16-billion acquisition of Flipkart Online Services in 2018 remains the biggest acquisition of an Indian asset by any acquirer, followed by BP plc acquisition of 30 per cent stake in Reliance Industries' 23 oil and gas production blocks in 2011 for $7.2 billion. Bloomberg reported late on Wednesday night that Holcim - the world's biggest cement maker - is considering a potential sale of its India business and gauging interest in its controlling stake in Ambuja Cement.
With infrastructure claiming a larger share, movement and distribution of cement is bound to change.
Half of India's top-priced stocks have outperformed the benchmark indices this year. On a year-to-date basis (YTD), the Sensex has gained 3.8 per cent and the Nifty50 3.4 per cent. The stocks which have outperformed the indices include 3M India, Nestle India, MRF, Shree Cement and Bosch while those who have underperformed the benchmarks include Page Industries (-10.4 per cent), Procter & Gamble (-4 per cent), Honeywell Automation (-0.9) and Lakshmi Machine Works, which gained 1.3 per cent.
Chief executive officers (CEOs) across sectors have expressed intentions to expand capacities, expecting the government's target to invest a record Rs 11.11 trillion on infrastructure development will act as a catalyst for a jump in consumer demand. "With the government planning a capex of Rs 11.11 trillion, private sector investment will come in a big way. Companies will be preparing for it right from today," H M Bangur, chairman of Shree Cement, told Business Standard. For the past few years, the investment scene in India has been dominated by government capital expenditures; private investments in the manufacturing sector have remained muted.
The headline for corporate profit growth has been very encouraging in the July-September quarter (Q2) of 2023-24 (FY24), with the combined net profit of listed companies up by 38 per cent year-on-year. However, the earnings distribution has been very lopsided, with most of the growth coming from public-sector oil-marketing companies (OMCs), banks, non-bank lenders, automobile (auto) companies, and cement producers. By comparison, companies from information technology services, fast-moving consumer goods (FMCG), retail, and consumer durables were disappointed, experiencing a sharp slowdown in net sales growth and a relatively muted increase in reported net profit.
Changes have been made in several indices including Nifty 500, Nifty 200, Nifty 100, Nifty Midcap 150, Nifty Smallcap 250 and host of sectoral indices including FMCG, IT, media, pharma, commodities and services sector.
In the domestic segment, demand is currently led by rural markets, oil and gas, LPG and B2C segments like roofing and sheeting.
Corporate margins and profits in India remain vulnerable to changes in crude oil prices in the international market. Historical quarterly data from listed companies (excluding banks, finance and insurance, oil and gas, and power sectors) indicate an adverse correlation between corporate margins and crude oil prices.
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Stocks to watch: ACC, Ambuja Cements, India Cements, Shree Cement, Ultra Tech Cement.
Grasim Industries, a part of the Aditya Birla group, has decided to sell 53.3 per cent stake in Shree Digvijay Cement Company (SDCC) to Cimpor, a Portuguese cement maker, for Rs 322 crore (Rs 3.22 billion).
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