Have you seen new structures, streets, railroad and metro stations, spans, and processing plants under development wherever you go? Cement is the critical fixing in them all. This makes us think about what’s going on with the cement stocks in India.
What’s the situation with the cement business?
India is the second biggest cement maker on the planet with more than 7% of the worldwide introduced limit and is likewise the third biggest customer. The business had tragically seen a shock because of the COVID-19 pandemic – there was a downturn popular and creation because of decreased development activities. The cement stocks in India endured drops in cost likewise.
In any case, creation and request have been expanding since around 2021 – cement creation volumes have expanded by 8% in FY22 for the main 16 cement creators in India. The interest development is staying put given the public authority’s attention on building public foundations (dams, transport center points, modern bunches, and so on) and housing projects (for example PM Awas Yojana). In this manner, the best cement stocks in India are ready to fill in esteem in the next few long stretches of time.
Attributes of the Indian cement industry
1. The increasing demand for cement in India comes from the accompanying sources –
- Real estate and housing – 65%
- Public Infrastructure – generally 25%
- Industrial Development – generally 10%
2. The industry is concentrated among the huge organizations with the main 6 organizations appreciating more than 60% of the piece of the pie.
3. The P/E Ratio (TTM) of the business all in all stands at 27.23.
A list of the top 10 cement stocks in India
Ambuja Cements Ltd.
The items presented by this huge cap India-based organization incorporate Ambuja Cement, Ambuja Kawach, Ambuja Cool Walls, Ambuja Powercem, and Ambuja Compocem among others. The organization additionally has a few auxiliaries including MGT Cements Pvt. Ltd., ACC Ltd., Dirk India Pvt. Ltd., and so on. A larger part portion of the organization was as of late gained by Mr. Gautam Adani.
- Income (FY22) – ₹ 28,965 cr
- Profit (FY22) – ₹ 2780 cr
- Change in profits in FY21-FY22 – 17.54%
- P/E Ratio (TTM) – 64.65
- Debt-to-Equity – 0.02
Ultratech Cement Ltd.
It is an India-based organization that is a market chief in the cement business. It produces customary portland cement, white cement, prepared blend cement, tiles, glues, waterproofing items, and so forth. The organization’s marked items incorporate Ultratech cement, Ultratech building items, Birla White Cement, and White fixing cement.
- Income (FY22) – ₹ 52,599 cr
- Profit (FY22) – ₹ 7,344 cr
- Change in profits in FY21-FY22 – 34.43%
- P/E Ratio (TTM) – 31.27
- Debt-to-Equity – 0.25
The organization has two significant fragments – cement and prepared mixed cement. Inside cement, they produce standard portland, portland pozzolana and portland slag cement. Its auxiliaries incorporate Bulk Cement Corporation (India) Ltd., ACC Mineral Resources Ltd., Singhania Minerals Pvt. Ltd. what’s more, and Lucky Minmat Ltd.
- Income (FY21) – ₹ 16,152 cr
- Profit (FY21) – ₹ 1,863 cr
- Change in profits in FY20-FY21 – 30.27%
- P/E Ratio (TTM) – 61.31
- Debt-to-equity – 0.01
India Cements Ltd.
It is an India-based cement organization whose brands incorporate Shankar Super Power, Coromandel King, and Raasi Gold. It has auxiliaries and partner organizations participating in monetary administrations, sugar, power, transportation, exchanging, and mining.
- Income (FY21) – ₹ 4,858 cr
- Profit (FY21) – ₹ 78.46 cr
- Change in profits in FY20-FY21 – – 62.09%
- P/E Ratio (TTM) – 72.44
- Debt-to-equity – 0.50
Dalmia Bharat Ltd.
While the organization delivers the standard Portland cement variations, its specialty incorporates sulfate safe cement, railway sleeper cement, and oil well cement.
- Income (FY21) – ₹ 11,286 cr
- Profit (FY21) – ₹ 816 cr
- Change in profits in FY20-FY21 – – 30.32%
- P/E Ratio (TTM) – 55.48
- Debt-to-equity – 0.22
JK Cement Ltd.
The essential fragments of this organization incorporate grey cement, white cement (counting portland cement variations), and united items. The organization, alongside its cement assembling units, works to squander heat recuperation units and hostage power plants.
- Revenue (FY21) – ₹ 7,991 cr
- Profit (FY21) – ₹ 687 cr
- Change in profits in FY20-FY21 – – 3.24%
- P/E Ratio (TTM) – 39.21
- Debt-to-equity – 1.05
Heidelberg Cement India Ltd.
It is an India-based organization creating building materials. It sells its items through two brands Mycem and Mycem Power – while Mycem is a mix of portland clinker, gypsum, and other responsive pozzolanic materials, Mycem Power is an unrivaled mix with laminated packaging (to forestall hydration through dampness).
- Income (FY21) – ₹ 2,297 cr
- Profit (FY21) – ₹ 252 cr
- Change in profits in FY20-FY21 – – 20%
- P/E Ratio (TTM) – 25.32
- Debt-to-equity – 0.15
Shree Cement Ltd.
The organization’s brands incorporate Bangur Cement, Bangur Power Cement, Roofon Substantial Expert Cement, Shree Jung Rodhak Cement, Rockstrong Cement. It has a power portion under which it makes squander heat recovery power, wind power, and sun-based power. Also, it produces engineered gypsum to supplant normal gypsum in cement creation.
- Income (FY21) – ₹ 15,010 cr
- Profit (FY21) – ₹ 2,332 cr
- Change in profits in FY20-FY21 – 2.01%
- P/E Ratio (TTM) – 54.52
- Debt-to-equity – 0.16
Ramco Cements Ltd.
The organization produces various classifications of cement to blend cement and dry mortar items – its items incorporate cement, dry mix products, and Ramco cement. It additionally takes part in rail route burrowing projects and different activities under PSUs like NTPC.
- Income (FY21) – ₹ 6,004 cr
- Profit (FY21) – ₹ 881 cr
- Change in profits in FY20-FY21 – 12.37%
- P/E Ratio (TTM) – 53.72
- Debt-to-equity – 0.73
Birla Corporations Ltd.
The organization has changed fragments like cement, jute, and others – jute items being one of its significant commodities. Its cement is sold under the brands MP Birla Cement, MP Birla Cement Perfect Plus, MP Birla Cement Rakshak, MP Birla Cement Samrat Advanced, MP Birla Cement Unique, MP Birla Cement Extreme Ultra, MP Birla Cement Samrat.
- Income (FY21) – ₹ 7,461 cr
- Profit (FY21) – ₹ 399 cr
- Change in profits in FY20-FY21 – – 36.67%
- P/E Ratio (TTM) – 45.34
- Debt-to-equity – 0.77
The eventual fate of cement stocks
The fate of any cement stock relies upon the accompanying elements –
- Cost of raw components for example cost of limestone, power, fuels, and technical materials.
- The cost of capital in the economy-Cement industry is profoundly capital-intensive, consequently, a somewhat high debt-to-equity Ratio is entirely expected. In this manner, expansion in loan fees adversely affects the Profit of cement organizations. Moreover, higher loan costs imply a lower capacity for buyers to spend on land.
- Cost of transportation – Organizations need to advance the areas of their mines (for example limestone, coal), fabricating plants, and metropolitan regions (wellsprings of interest) to limit costs. The increasing expense of vehicle fuel adds to the cost of creation as well as interest for lodging.
- Capacity use levels of organizations – It permits us to see whether the production options and expectations of the organization are improved in the long run.
- Expansion of the lodging finance area – It will permit more individuals to purchase homes and all the more land activities to be sent off.
- Public expenditure on infrastructure – Stations, terminals, streets, spans, dams, and buildings built by the government offer a consistent source of interest for the business
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