24 June 2020
4QFY20 Results Update | Sector: Cement
India Cement
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
CMP: INR127
TP: INR120 (-5%)
Worst quarter in close to a decade
Market share recovery key to improvement
ICEM IN
308
39.3 / 0.5
140 / 68
-18/96/44
371
Neutral
Motilal Oswal values your support in the
Asiamoney Brokers Poll 2020 for India
Research, Sales and Trading team.
We
request your ballot.
India Cement (ICEM)’s 4QFY20 results highlight the continued loss in
market share, with volumes down 20% YoY v/s market decline of ~10%
YoY. We note that ICEM has reported the lowest EBITDA in close to a
decade.
We lower our FY21/FY22 estimates to factor weaker volume trends.
Following sharp appreciation in the past six months, we find the stock
fairly valued at 9.3x FY22 EV/EBITDA and USD60/t of capacity, and
maintain our
Neutral
rating. Any potential change of ownership and
management control is the key monitorable.
Volumes declined 20% YoY (flat QoQ) to 2.65mt in 4QFY20 (est.: 2.95mt)
due to the impact of COVID-19 and market share loss. Blended realization
declined 3% QoQ (7% YoY) to INR4,352/t. Thus, net sales fell 26% YoY to
INR11.5b (est.: INR13.5b).
EBITDA/t came in lower by 47% QoQ at INR254/t (est.: INR648/t). This
was primarily due to lower realization and higher freight costs. As a
result, EBITDA was down 65% (48% QoQ) to INR675m (65% lower than
estimated). The EBITDA margin shrank 6.4pp YoY and 4.9pp QoQ to 5.9%.
Notably, the company reported the lowest ever EBITDA in close to a
decade.
The company reported an exceptional expense of INR1.0b on account of
the impairment of advances given to subsidiaries.
ICEM reported net loss of INR1.1b v/s profit of INR439m in 4QFY19 (v/s
est. profit of INR358m). Adj. for impairment provision of INR1.0b, net loss
after tax stood at INR543m.
FY20 reported rev. / EBITDA / adj. PAT stood at
INR50.6b/INR5.9b/INR0.2b, down 1%/8%/69% YoY, respectively.
FY20 net debt rose by INR2.5b to INR36.1b due to a higher working
capital as collections stood lower at INR4b in Mar’20 v/s INR8b in Mar’19.
ICEM lost ~0.7mt sales in Mar’20 due to the COVID-19-led shutdown.
Andhra Pradesh and Telangana’s industry volumes declined 36% YoY in
4Q and 23% YoY in FY20. The South India market saw 11% decline in
FY20.
ICEM is looking to reduce fixed costs using lesser contractual labor and
improving the sales mix in favor of PPC, which has a lower cost. It expects
the impact of fixed cost reduction to be visible from 2QFY21. On the
other hand, the benefit of lower coal and fuel prices is expected to be
realized in 3QFY21 as it currently has a higher cost inventory that would
last up to 2QFY21.
Miss on all fronts; EBITDA down 48% QoQ
Financial Snapshot (INR b)
Y/E MARCH
Sales
EBITDA
Adj. PAT
EBITDA Margin (%)
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
Ratios
Net D:E
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA(x)
EV/ton (USD)
Div. Yield (%)
2020
50.6
5.9
0.2
11.6
0.7
-69
174.7
0.7
0.4
2.2
-81.1
184.7
0.7
12.9
65
0.6
2021E
43.9
5.1
-0.5
11.6
-1.5
-316
172.6
0.6
-0.9
2.4
-47.1
-85.4
0.7
14.5
64
0.5
2022E
53.3
7.6
1.4
14.3
4.4
-395
175.8
0.6
2.5
4.5
26.6
28.9
0.7
9.5
63
0.8
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-20
28.3
8.3
12.9
50.6
Dec-19
28.2
16.6
14.7
40.6
Mar-19
28.2
28.4
13.6
29.8
Highlights from management commentary
FII Includes depository receipts
Amit Murarka - Research analyst
(Amit.Murarka@motilaloswal.com) +91 22 6129 1538
Basant Joshi - Research analyst
(Basant.Joshi@motilaloswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
3 September 2019
1
 Motilal Oswal Financial Services
India Cement
Net debt stood at INR36.2b at FY20-end. The company expects to repay INR5.0b
toward term debt in FY21.
ICEM would go slow on its planned Damoh (Madhya Pradesh) greenfield project
given weak demand currently.
The company has switched over to cash-and-carry from credit-based sales,
which has led to improved liquidity.
We expect ICEM’s debt to remain elevated due to weak cement demand as well
as weak performances from the non-core businesses. Net debt for ICEM stood
at INR36.2b in FY20, which we expect would reduce marginally to INR34b in
FY22 (implying 4.4x net debt/EBITDA).
ICEM is also losing market share in southern India, evident from its weaker
volume trends v/s peers Ramco and Dalmia.
ICEM trades at 14.5x/9.5x FY21/FY22E EV/EBITDA and at USD64/t / USD63/t
FY21/FY22E capacity. We value the stock at 9x FY22E EV/EBITDA to arrive at a
target price of INR120. Maintain
Neutral.
(INR m)
FY20 Var.
4Q
(%)
2.95
-10
-11.4
4,589
-5
-2.3
2.5
13,543
-15
-13.4
1,912
-65
14.1
646
873
6
112
505
0
505
148
29.2
358
-411
358
-18.5
2.6
Valuation and view
Quarterly Perf. (Standalone)
Y/E March
Sales Dispatches (m ton)
YoY Change (%)
Realization (INR/ton)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT
Tax
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
E: MOFSL Estimates
Per ton analysis
1Q
3.08
16
4,425
-9
759
305
1,302
1,046
505
3,917
508
1Q
3.08
16
4,425
-8.9
-2.2
13,607
5.5
1,561
11.5
616
733
55
267
0
267
57
21.2
210
210
-20.5
1.5
FY19
FY20
FY19
2Q
3Q
4Q
1Q
2Q
3Q
4Q
3.08
2.96
3.33
3.04
2.67
2.66
2.65 12.44
14
9
8
-1
-13
-10
-20
11.4
4,508 4,450 4,697 4,828 4,671 4,478 4,352 4,524
-4.0
0.0
3.8
9.1
3.6
0.6
-7.3
-2.2
1.9
-1.3
5.5
2.8
-3.3
-4.1
-2.8
13,871 13,163 15,640 14,688 12,457 11,911 11,519 56,280
9.4
8.5
11.9
7.9
-10.2
-9.5
-26.3
8.9
1,548 1,349 1,922 2,420 1,472 1,287
675 6,379
11.2
10.2
12.3
16.5
11.8
10.8
5.9
11.3
617
632
648
599
613
615
642 2,513
954
728
827
799
816
806
924 3,242
38
43
174
32
32
33
180
310
14
31
622 1,054
75
-101
-711
934
0
0
0
0
0
0 1,000
14
31
622 1,054
75
-101 -1,711
934
0
0
183
331
-13
-48
-600
240
0.0
0.0
29.5
31.5
-16.7
46.9
35.1
25.7
14
31
439
722
87
-54 -1,111
694
14
31
439
722
87
-54
-543
694
-94.0
-79.5
24.3 243.5 509.8 -271.6
-223 -31.0
0.1
0.2
2.8
4.9
0.7
-0.5
-4.7
1.2
FY20
11.02
-11.4
4,589
1.4
50,575
-10.1
5,852
11.6
2,469
3,345
277
316
1,000
-684
-329
48.1
-355
212
-69.5
0.4
Sales Dispatches (m ton)
YoY Change (%)
Net Realizations
YoY (%)
RM Cost
Employee Expenses
Power, Oil & Fuel
Freight cost
Other Expenses
Total Exp
EBITDA
FY19
2Q
3Q
3.08
2.96
14
9
4,508 4,450
-4
0
785
835
284
289
1,324 1,361
1,020 1,012
592
497
4,005 3,994
503
456
4Q
3.33
8
4,697
4
904
272
1,293
1,024
626
4,119
577
1Q
3.04
-1
4,828
9
851
324
1,240
1,058
559
4,033
795
FY20
2Q
3Q
2.67
2.66
-13
-10
4,671 4,478
4
1
866
870
327
326
1,251 1,153
1,021 1,041
655
604
4,119 3,994
552
484
FY19
4Q
2.65
-20
4,345
-7
680
292
1,273
1,088
757
4,091
254
12.44
11.4
4,524
-2.2
823
287
1,319
1,026
557
4,011
513
FY20
11.02
-11.4
4,589
1.4
818
318
1,230
1,052
641
4,058
531
FY20
4Q
2.95
-11.4
4,589
-2.3
866
311
1,156
980
627
3,941
648
(INR/t)
Var.
(%)
-5
226
-21
-6
10
11
21
4
-61
24 June 2020
2
 Motilal Oswal Financial Services
India Cement
Conference call highlights
Highlights from management commentary
COVID-19 impact
ICEM lost ~0.7mt sales in Mar’20 due to COVID-19-led shutdown.
As a result, India Cement lost INR1.55b in gross profit; however, the overall
impact was reduced to INR0.6b due to various cost-control measures
undertaken in FY20 and an improvement in NPR by INR38/ton YoY.
Debtors’ collections were impacted due to COVID-19; collections in Mar’20
stood at INR4.0b v/s INR8.0b in Mar’19.
As a result, the company had to utilize a higher amount from its cash credit
facility, resulting in utilization of INR6.46b in 4QFY20; however, the company
has repaid ~INR2.5b, and current utilization stands at INR4.0b.
The Chennai grinding unit is not operational currently due to lockdown.
Volumes
FY20 sales volumes stand at 11mt, down from 12.4mt in FY19.
4QFY20 sales volumes stood at 2.65mt.
Capacity utilization stood at 69% in 4QFY20 and 71% in FY20. However, Mar’20
capacity utilization was at 50%.
Andhra Pradesh and Telangana’s industry volumes declined 36% YoY in 4Q and
23% YoY in FY20. The South India market saw 11% decline in FY20.
Cost reduction in focus
ICEM is looking to reduce fixed costs by using lesser contractual labor and
improving the sales mix in favor of PPC, which has a lower cost.
The impact of fixed cost reduction should be visible from 2QFY21. On the other
hand, the benefit of lower coal and fuel prices is expected to be realized in
3QFY21 as it currently has a higher cost inventory that would last up to 2QFY21.
ICEM has stopped compensating dealers for selling at a discount to the billing
price.
A rise in diesel prices and increase in lead distance led to an increase in freight
cost per ton in 4QFY20.
Demand and pricing insights
ICEM is cautious about demand given the unpredictability of the lockdown.
Demand has picked up in geographies where the lockdown has been lifted.
Prices have gone up from April’20 and are expected to sustain.
The Rajasthan plant’s utilization has improved as demand has picked up in the
northern region.
Expect strong demand recovery in Andhra Pradesh as the state govt. has started
placing orders. Even the Telangana govt. has launched housing schemes that
would boost demand.
Debt and capex outlook
Net debt stood at INR36.2b at FY20-end.
The company repaid term debt of INR14.b in FY20; INR5.0b repayment is
scheduled in FY21.
3
24 June 2020
 Motilal Oswal Financial Services
India Cement
ICEM would go slow on its planned Damoh (Madhya Pradesh) greenfield project
given weak demand currently.
Maintenance capex for FY21 would be INR700m.
ICEM is planning an 8MW WHRS at Chilamkur, which would reduce power cost.
Other highlights
The company has switched over to cash-and-carry from credit-based sales,
which has led to improved liquidity.
The company has revalued its land bank and upward revised its valuation by
INR2.36b, reflected in other comprehensive income.
Of the INR1.0b impairment provision for subsidiary receivables, INR0.45b is for
the Travel business and INR0.4b is for the Infrastructure business. As there is
uncertainty regarding the revival of the Travel and Infrastructure businesses, the
company has taken impairment on loans and advances made to these
businesses.
ICEM would focus on the Cement business, while looking to hive non-core
businesses.
Regarding the possibility of an ownership change, the management stated no
discussions had happened with strategic shareholder Mr Radhakishan Damani.
Mr Damani, with his family, recently acquired a 20% stake in the company.
Key exhibits
Exhibit 1: Volumes decline 20% YoY, realizations 3% QoQ
Realizations (INR/ton)
3.1
2.7
2.7
2.7
Volume (m ton)
3.3
3.0
3.0
2.3
2.5
2.7
2.9
3.1
3.1
2.7
2.7
2.7
Exhibit 2: Margins decline 4.9pp QoQ
EBITDA (INR m)
EBITDA (%)
17.2
16.5
14.3
16.7
14.9
14.4
13.8
14.1
11.5
12.3
11.8
11.3
11.210.2
10.8
5.9
Exhibit 3: Lowest EBITDA/t in nine years
EBITDA (INR/Ton)
Source: Company, MOFSL
Source: Company, MOFSL
24 June 2020
4
 Motilal Oswal Financial Services
India Cement
Exhibit 4: Key operating indicators (incl. other businesses)
INR/ton
Net realization
Expenditure
RM Cost
Staff Cost
Energy Cost
Selling Exp.
Other Exp.
Total Exp
EBITDA
4QFY20
4,345
680
292
1,273
1,088
757
4,091
254
4QFY19
4,697
904
272
1,293
1,024
626
4,119
577
YoY (%)
-7.5%
-24.7%
7.2%
-1.6%
6.2%
21.0%
-0.7%
-55.9%
3QFY20
4,478
870
326
1,153
1,041
604
3,994
484
QoQ (%)
-3.0%
-21.8%
-10.4%
10.4%
4.5%
25.3%
2.4%
-47.4%
Valuation and view
With ~80% of its capacity in southern India, ICEM has good brand recall in the
region. Also, it is one of the most leveraged plays on price recovery in this
region. We note that for every INR10/t of price hike, EPS increases by 6% for
ICEM.
We expect debt levels to remain elevated for the company due to the high
investments in the non-cement business. Net debt for ICEM stood at INR36b in
FY20, which should reduce to INR33.5b in FY22; on the other hand, net
debt/EBITDA should reduce to 4.4x in FY22 from 6.2x in FY20. While the
company has plans to set up a capacity in Damoh, Madhya Pradesh, for which it
has a mining lease, we believe elevated debt levels would delay the expansion.
The company is also losing market share in the southern region, as evident from
its lower volume growth v/s Ramco and Dalmia.
ICEM trades at 14.5x/9.5x FY21/FY22E EV/EBITDA and at a USD64/t / USD63/t
FY21/FY22E capacity. We value the stock at 9x FY22E EV/EBITDA to arrive at a
target price of INR120. Maintain
Neutral.
24 June 2020
5
 Motilal Oswal Financial Services
India Cement
Story in charts
Exhibit 5: Capacity utilization to remain lower in FY21
Capacity (mt)
Despatch (mt)
Exhibit 6: EBITDA and margin trend
EBITDA (INR/ton)
Margin (%)
78
71
65
62
59
70
70
69
70
19.8
15.0
16.1
17.0
13.4
14.3
11.3
11.6
11.6
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E
Source: Company, MOFSL
FY14
FY15
FY16
FY17
FY18
FY19
FY20 FY21E FY22E
Source: Company, MOFSL
Exhibit 7: Company’s net debt profile
Net debt (INR b)
Net Debt/EBITDA
6.2
4.1
4.5
5.3
4.4
6.8
Exhibit 8: RoE/RoIC profile
8.2
5.7
7.2
RoE (%)
4.8
4.7
RoIC (%)
5.4
4.1
2.2
27
2.6
33
36
36
31
4.4
3.2
1.9
2.1
4.1
3.4
3.1
29
31
34
36
35
34
0.3
FY14
Source: Company, MOFSL
FY15
FY16
FY17
FY18
3.4
2.0
2.5
1.3
0.4
FY19
-0.9
FY20 FY21E FY22E
Source: Company, MOFSL
Exhibit 9: ICEM’s EV/EBITDA trend
20
15
10
5
0
EV/EBITDA(x)
Avg(x)
Peak(x)
Min(x)
Exhibit 10: ICEM’s EV/ton trend
EV/ton (US$)
Avg
100
Max
Min
50
0
Source: MOFSL, Company
Source: MOFSL, Company
24 June 2020
6
 Motilal Oswal Financial Services
India Cement
Financials and valuations
Standalone Income Statement
Y/E March
Net Sales
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income - Rec.
PBT bef. EO Exp.
EO Expense/(Income)
PBT after EO Exp.
Current Tax
Deferred Tax
Tax Rate (%)
Reported PAT
PAT Adj for EO items
Change (%)
Margin (%)
Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Deferred Liabilities
Secured Loan
Unsecured Loan
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Real Estate Projects WIP
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
2015
44,236
-0.4
6,648
15.0
2,579
4,069
4,260
308
117
0
117
0
0
0.0
117
117
-95.9
0.3
2016
48,114
8.8
7,754
16.1
2,195
5,560
3,825
221
1,956
32
1,924
625
0
32.5
1,299
1,321
1,024.8
2.7
2017
50,795
5.6
8,610
17.0
2,571
6,040
3,605
165
2,600
0
2,600
867
0
33.3
1,734
1,734
31.3
3.4
2018
51,692
1.8
6,928
13.4
2,559
4,369
3,402
194
1,161
0
1,161
179
-24
13.3
1,006
1,006
-42.0
1.9
2019
56,280
8.9
6,379
11.3
2,513
3,866
3,242
310
934
0
934
325
-85
25.7
694
694
-31.0
1.2
2020
50,575
-10.1
5,852
11.6
2,469
3,384
3,345
277
316
1,000
-684
69
-398
48.1
-355
212
-69.5
0.4
2021E
43,871
-13.3
5,108
11.6
2,532
2,576
3,464
277
-611
0
-611
-153
0
25.0
-458
-458
-316.3
-1.0
(INR m)
2022E
53,344
21.6
7,645
14.3
2,574
5,071
3,545
277
1,804
0
1,804
451
0
25.0
1,353
1,353
-395.1
2.5
(INR m)
2022E
3,099
51,367
54,467
5,910
23,750
12,420
36,170
96,548
83,770
17,918
65,853
1,958
7,369
40,423
8,038
7,307
2,630
22,447
0
19,055
13,884
3,946
1,225
21,367
96,548
2015
3,072
32,859
35,931
3,297
21,968
10,039
32,007
71,235
67,600
31,852
35,749
1,000
15,852
30,513
6,069
4,661
39
19,540
204
11,879
8,253
3,038
588
18,634
71,235
2016
3,082
46,728
49,809
5,719
21,331
10,218
31,549
87,077
74,536
2,712
71,824
926
5,507
25,364
5,994
5,359
67
13,945
0
16,544
10,367
4,569
1,609
8,820
87,077
2017
3,082
48,018
51,099
6,556
23,797
5,416
29,213
86,868
75,015
5,286
69,729
1,278
6,190
29,256
7,450
5,089
68
16,649
0
19,584
13,180
4,796
1,608
9,671
86,868
2018
3,082
48,922
52,003
6,532
28,180
3,049
31,229
89,764
75,794
7,831
67,963
1,712
5,884
31,700
6,723
6,295
84
18,599
0
17,495
11,759
4,307
1,428
14,205
89,764
2019
3,099
49,298
52,397
6,308
26,433
7,237
33,670
92,375
77,474
10,344
67,131
1,770
6,946
35,203
8,232
7,290
67
19,614
0
18,675
9,298
7,971
1,405
16,528
92,375
2020
3,099
51,050
54,149
5,910
23,750
12,420
36,170
96,230
81,070
12,812
68,258
1,958
7,369
36,939
8,263
7,163
66
21,447
0
18,295
13,342
3,727
1,225
18,644
96,230
2021E
3,099
50,376
53,475
5,910
23,750
12,420
36,170
95,555
82,270
15,344
66,926
1,958
7,369
36,754
7,212
6,611
1,484
21,447
0
17,452
12,621
3,606
1,225
19,302
95,555
24 June 2020
7
 Motilal Oswal Financial Services
India Cement
Financials and valuations
Ratios
Y/E March
Basic (INR)
Standalone EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
EV/Ton (US$)
Dividend Yield (%)
Return Ratios (%)
RoIC
RoE
RoCE
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Leverage Ratio (x)
Current Ratio
Debt/Equity
Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
2015
0.4
8.8
117.0
0.0
0.0
2016
4.3
11.4
161.6
0.0
0.0
2017
5.6
14.0
165.8
1.0
17.8
2018
3.3
11.6
168.8
0.8
24.5
2019
2.3
10.4
169.1
0.8
53.9
56.4
12.3
0.8
1.3
11.4
63.15
0.6
5.7
0.3
6.3
0.6
50.1
34
2.6
0.9
4.8
3.1
5.2
0.6
45.5
36
1.5
0.6
4.7
3.4
5.1
0.6
53.5
32
1.5
0.6
4.4
2.0
4.8
0.6
47.5
43
1.8
0.6
3.2
1.3
3.7
0.6
53.4
47
1.9
0.6
2020
0.7
8.6
174.7
0.8
-81.1
184.7
14.7
0.7
1.5
12.9
65.31
0.6
1.9
0.4
2.2
0.5
59.6
52
2.0
0.7
2021E
-1.5
6.7
172.6
0.6
-47.1
-85.4
19.0
0.7
1.7
14.5
64.08
0.5
2.1
-0.9
2.4
0.5
60.0
55
2.1
0.7
2022E
4.4
12.7
175.8
1.0
26.6
28.9
10.0
0.7
1.4
9.5
63.09
0.8
4.1
2.5
4.5
0.6
55.0
50
2.1
0.7
(INR m)
2022E
1,804
2,574
3,545
-451
-919
6,552
0
6,552
-1,500
5,052
0
0
-1,500
0
0
-3,545
-361
0
-3,906
1,146
1,484
2,630
2015
295
2,579
3,947
-383
-817
5,621
173
5,794
-1,324
4,470
-6,397
6,722
-999
0
-17
-4,781
11
0
-4,787
8
31
39
2016
1,910
2,693
3,652
-55
767
8,966
204
9,169
-1,598
7,571
5
430
-1,162
0
3,463
-5,042
-2
-6,398
-7,979
28
39
67
2017
2,517
2,571
3,528
-637
112
8,090
30
8,121
-788
7,332
-683
-405
-1,876
0
16,880
-3,537
-370
-19,217
-6,243
1
67
68
2018
1,257
2,559
3,220
-384
-2,072
4,580
105
4,685
-1,902
2,783
344
-1,385
-2,942
0
9,583
-3,411
-371
-7,528
-1,727
16
68
84
2019
853
2,513
3,074
-88
-3,069
3,283
-119
3,164
-1,712
1,452
-923
231
-2,404
18
5,424
-3,136
-336
-2,746
-776
-16
84
68
2020
282
2,469
3,050
-312
-1,269
4,220
-81
4,139
-1,365
2,774
-278
-1,759
-3,403
0
2,562
-3,000
-300
0
-738
-1
68
67
2021E
-611
2,532
3,464
153
760
6,297
0
6,297
-1,200
5,097
0
0
-1,200
0
0
-3,464
-216
0
-3,680
1,417
67
1,484
24 June 2020
8
 Motilal Oswal Financial Services
India Cement
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
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SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
24 June 2020
9
 Motilal Oswal Financial Services
India Cement
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
24 June 2020
10