Daily Archives: May 12, 2016

Orient Cement Ltd
Cement and Cement Products
FV – Re 1; 52wks H/L – 198/128; TTQ – 15000; CMP (May 12, 2016) – Rs 155;

Market Cap – Rs 3167 Crs

Standalone Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Valuation Parameters

1. EV/EBITDA: 24.25
2. EV/Share: Rs 217
3. EV/Sale: 2.94
4. Market Cap/ Sale: 2.09
5. Debt to Equity: 1.22
6. RoI: 6.1 %

• In September 2015, Orient Cement commissioned its new plant located near Chittapur, District Gulbarga, Karnataka and has an installed capacity of 3 million tonnes per annum (MTPA). The company now has a total capacity of 8 MT including the recently commissioned capacity in Karnataka. The company had invested Rs 2000 Crs in the Karnataka plant.
• It sells 60% of its cement production in Maharashtra and close to 40% in Telangana. Nearly 80% of its sales are in the trade segment with a focus on rural housing.
• Orient Cement has set a target of achieving 15Mt/yr production capacity by the end of 2020. The company is now looking at acquiring a few production plants with 2Mt/yr and 3Mt/yr production capacities in eastern India.

Recent Updates

• The Company’s fourth-quarter net profit fell 77% to Rs 19 Crs from Rs 85 Crs in the same period last year, largely due to a sharp fall in realisation. Overall realisation was down 17%to Rs 3228 per tonne.
• The ramp up of production at the new plant in Karnataka’s Gulbarga district is progressing well and helped achieve a volume growth of 40%.
• The capacity utilisation has touched 44% at new plant, while it was 86% at the old plant. Overall capacity utilisation stood at 74%. The company targets 60% capacity utilisation at new plant for the coming year and 86-88% for the old plants.
• For Q4 of FY 16, the company did a total volume of nearly 13.9 lakhs tonne. The company is targeting sales volume of 14.5-15 lakhs tonnes in coming quarters and also looking at higher usage of pet coke as cement plant stabilise.
• Given the Debt to equity at 1.2, the company is comfortable with it and has no plan to bring it down in current year.
• Remuneration paid to MD and CEO of the company for FY 16has exceeded the limit prescribed under section 197 read with the Schedule V of the Companies Act.
• Aiming for 14.5-15 lakh tonne sales: Orient Cement

Bulk Deals

Block Deals

Overview:

• The company started its operations in 1982 and is engaged in the manufacture and sale of cement.
• The Company’s manufacturing facilities are located at Devapur in Telangana and Jalgaon in Maharashtra.
• The Company’s products include Birla A1 Premium Cement, Birla A1 Premium Cement-OPC 53 Grade and Birla A1 Premium Cement-OPC 43 Grade. The Company’s Greenfield cement plant, located near Chittapur, District Gulbarga, Karnataka, has an installed capacity of approximately three million tons per annum (MTPA).
• The Company is part of the CK Birla Group, which operates in three industry clusters, including technology and automotive, home and building, and healthcare and education.
• The Company operates through a network of over 40 offices.
• Orient Cement operates largely in rural and semi-urban markets in Telangana and Maharashtra. Its target customer is the independent house builder in these markets. Therefore, dependence on the organised real-estate sector is small.

Management:

• Mr C K Birla is the Chairman
• Mr Desh Deepak Khetrapal is the MD and the CEO

Major Non – Promoter Holdings:

Standalone Financial Trends ~ Amt in Rs Crs

• The costs related to the commissioning/stabilisation of the new integrated unit at Chittapur (Karnataka) has affected the firm’s operating and net profit numbers in the last two quarters of FY16.
• Increase in long term borrowing in FY 15 was to finance the new plant at Karnataka.

AYM Syntex Ltd
Textiles
FV – Rs 10; 52wks H/L – 163.5/39.55; TTQ – 5620; CMP (May 12, 2016) – Rs 103.8;
Market Cap – Rs 407 Crs

Standalone Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Valuation Parameters

1. EV/EBITDA: 4.97
2. EV/Share: Rs 134
3. EV/Sale: 0.66
4. Market Cap/ Sale: 0.51
5. Debt to Equity: 0.86
6. RoI: 24.74 %
   

Bulk Deals

Insider Trades

https://www.valueresearchonline.com/stocks/snapshot.asp?code=4442

• VLS Capital held 1.36% stake in the company until September 2015.

Welspun Group is in process of carving out the yarn-spinning business, AYM Syntex, which will be managed by cofounder Rajesh Mandawewala’s elder son Abhishek. Rajesh Mandawewala, group managing director, is in the process of purchasing partner and Chairman BK Goenka’s stake in AYM Syntex. The arrangement shall lead to no change in the current promoter shareholding pattern of the group. Abhishek Mandawewala took over as a whole time director in August 2015. ~ Succession Planning: Welspun Group to hive off yarn-spinning business for next generation

Recent Updates

• The company has received approval to do capex up to Rs 75 Crs for de-bottlenecking and building infrastructure such as warehouse for next five years road map. The same has been approved by the Board of Directors on May 6, 2016. ~ AYM Syntex gets nod for capital expenditure worth Rs 75 crore

Overview:

• AYM Syntex Limited, formerly Welspun Syntex Limited is a manufacturer and exporter of polyester texturized filament yarn and nylon filament yarn.
• The Company operates through Synthetic Yarn segment.
• The Company’s plants are located at Silvassa and Palghar in Thane, India. The Company’s product categories include bulk continuous filament yarn (BCF), polyester partially oriented yarn (POY), polyester fully drawn yarns (FDY), polyester mono filament yarns (PMFY), polyester filament yarn (PFY), polyester draw texturized yarn (DTY/PTY), air textured yarns (PATY) and specialty polyester filament yarns (SPFY).
• Its POY category consists of products, including full dull raw white poy, semi dull raw white poy, bright raw white poy, super bright raw white poy, dope dyed black poy, dope dyed bright poy and bright cationic poy.
• The Company’s PMFY category consists of products, including SEMI DULL Raw White, Bright Trilobal and Dope Dyed.
• The Company is in the process of doubling capacity of BCF yarn, increasing capacity of texturized yarn, and mother yarn.

Welspun consolidating infra business, Apollo Global to get 12% of Welspun Projects 

Welspun to merge investment firms to unlock value, raise funds

Management:

• Mr B A Kale is the Executive Director and the CEO.
• Mr Abhishek Mandawewala is the Whole Time Director

 Shareholding Pattern as on March 31, 2016

The Equity Capital is @Rs 39.24 Crs consisting of 39239568 Equity Shares of FV Rs 10 currently held as under

None of the promoter’s holding is pledged

Share Price Trend

 Standalone Financial Trends ~ Amt in Rs Crs

• Networth grew at a CAGR of 17.43% over the last six years while Total sales grew at a CAGR of 8% over the same period. PAT has grown at a CAGR of 24.32% in the same period.
• *The Company had allotted 16000000 6% Optionally Convertible Cumulative Preference Shares of Rs 10 each at par to Krishiraj Trading Limited, promoter of the Company, which is to be converted into Equity Shares at any time within 18 months from the date of allotment @ Rs. 10.26 per share. The above shares were converted into 15594541 Equity shares at Rs. 10.26 per share on March 22, 2013. The paid up equity share capital thus increased from Rs 23.64 Crs in FY 12 to Rs 39.24 Crs in FY 13.
• **Turnover of the Company reduced due to reduction in price of raw materials and finished goods following slash in price of crude oil. Concentration on high margin products, development of new products and production of BCF yarn coupled with reduction in prices of raw materials following slash in price of crude oil has increased profitabilityof the Company.