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Today I am going to provide you guys with a limited review of a company that operates in five different segments : the name of the company is Prism Cement Limited.
Prism Cement Limited is an ISO 9001:2000 certified company promoted by Rajan R heja Group which has diverse business interests. It operates one of the largest single kiln cement plants in the country at Satna, Madhya Pradesh. Equipped with state-of-the-art machinery and technical support from F.L Smidth & Co A.S Denmark, the world leaders in cement technology, Prism Cement has successfully created a niche for itself in the Indian cement industry.
The company manufactures Portland Pozzollana Cement (PPC) as well as Ordinary Portland Cement (OPC) under its brand name ‘Champion’ and both contribute to a major junk to top line and bottom line growth of Prism.
The company caters mainly to markets of UP, MP and Bihar which are within the radius of 340-370 kms of its plant at Satna, MP. The company has strong marketing network with over 2000 dealers serviced from 46 stocking points without any wholesalers.
While cement manufacturing is Prism’s major business, around 24 per cent of its revenues are contributed by its Readymix Concrete business which gives the company a distinct advantage over other ready mix companies since the major input cement is assured on demand. Prism just needs to procure other inputs like sand, aggregates and micro silica. Thus, Prism Cements ready mix business is a strong money spinner since it can play with pricing whilst selling ready mix concrete.
Effective 1 April 2009, HR Johnson [ India ] Ltd and RMC Readymix [ India ] Pvt Ltd got amalgamated with Prism Cement
Besides, Prism Cements Ltd owns the following subsidiaries:
· Silica Ceramica Pvt. Ltd.
· Lifestyle
· Porselano Tiles Ltd.
· Raheja QBE General Insurance Co. Ltd.
Thus, Prism Cement operates in 5 distinct sectors namely cement, ready mix concrete, silica, tiles and finance sector.
For FY 2009-10, the consolidated Revenues and PAT stood at Rs.2900 crores and Rs.259 crores respectively. Corresponding figures for previous fiscal 2008-09 were Rs. 741 crores and Rs.96 crores respectively. Thus, in fiscal 2009-10 topline increased by just a bit over 291 per cent and bottom line increased by around 162 per cent over previous years outcome.
During FYQ1 ended 30 June 2010, total Revenues and PAT stood at Rs.726.82 crores and Rs.55.90 crores respectively. For FYQ1 ended 30 June 2010 the corresponding numbers were Rs. 272.06 crores and Rs.74.25 crores.
The company has a Market Cap of Rs.2962 crores, a low Debt Equity ratio of 0.44, a PE of 16.5 and it last paid a dividend of Rs.2.5 per share for fiscal 2009-10. At the LTP of Rs.58.85/share, the Dividend Yield works out to 4.25 per cent.
Going forward, one the one hand there is ongoing capacity additions taking place in the cement sector whilst on the other hand the infrastructure needs of India are pregnant with tremendous potential and hence one can take a call on this stock on sharp corrections in order to seek reasonable capital gains and good dividend income.
While cement manufacturing is Prism’s major business, around 24 per cent of its revenues are contributed by its Readymix Concrete business which gives the company a distinct advantage over other ready mix companies since the major input cement is assured on demand. Prism just needs to procure other inputs like sand, aggregates and micro silica. Thus, Prism Cements ready mix business is a strong money spinner since it can play with pricing whilst selling ready mix concrete.
Effective 1 April 2009, HR Johnson [ India ] Ltd and RMC Readymix [ India ] Pvt Ltd got amalgamated with Prism Cement
Besides, Prism Cements Ltd owns the following subsidiaries:
· Silica Ceramica Pvt. Ltd.
· Lifestyle
· Porselano Tiles Ltd.
· Raheja QBE General Insurance Co. Ltd.
Thus, Prism Cement operates in 5 distinct sectors namely cement, ready mix concrete, silica, tiles and finance sector.
For FY 2009-10, the consolidated Revenues and PAT stood at Rs.2900 crores and Rs.259 crores respectively. Corresponding figures for previous fiscal 2008-09 were Rs. 741 crores and Rs.96 crores respectively. Thus, in fiscal 2009-10 topline increased by just a bit over 291 per cent and bottom line increased by around 162 per cent over previous years outcome.
During FYQ1 ended 30 June 2010, total Revenues and PAT stood at Rs.726.82 crores and Rs.55.90 crores respectively. For FYQ1 ended 30 June 2010 the corresponding numbers were Rs. 272.06 crores and Rs.74.25 crores.
The company has a Market Cap of Rs.2962 crores, a low Debt Equity ratio of 0.44, a PE of 16.5 and it last paid a dividend of Rs.2.5 per share for fiscal 2009-10. At the LTP of Rs.58.85/share, the Dividend Yield works out to 4.25 per cent.
Going forward, one the one hand there is ongoing capacity additions taking place in the cement sector whilst on the other hand the infrastructure needs of India are pregnant with tremendous potential and hence one can take a call on this stock on sharp corrections in order to seek reasonable capital gains and good dividend income.
Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd
