Initiating Coverage |
26 December
2017
Sector: Cement
Sanghi Industries
Expansion into
high-priced markets
Reserves in
proximity
Low cost
manufacturing
Owned ports
Ready for the next leap
Abhishek Ghosh-Research analyst
(Abhishek.Ghosh@MotilalOswal.com); +91 22 3982 5436
Pradnya Ganar-Research analyst
(Pradnya.Ganar@motilaloswal.com); +91 22 3980 4322
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.

Sanghi Industries
Contents: Sanghi Industries | Ready for the next leap
Summary ............................................................................................................. 3
Lowest-cost producer in commodity business ....................................................... 5
Efficient power & fuel cost curve .......................................................................... 8
Coastal transport mode provides distinctive advantage....................................... 11
Access to large limestone reserve – a major advantage ....................................... 15
Demand market for SIL is getting favorable ......................................................... 17
Play on multiple re-rating via doubling of capacity .............................................. 22
SWOT analysis .................................................................................................... 25
Bull & Bear case
................................................................................................. 26
Financials and Valuations ................................................................................... 27
26 December 2017
2

Sanghi Industries
BSE Sensex
33,940
S&P CNX
10,493
Sanghi Industries
Initiating Coverage | Sector: Cement
CMP: INR127
TP: INR157(+23%)
Buy
Ready for the next leap
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
Diversification into new markets to bring in scale and margin expansion
SNGI IN
220
137 / 46
2/48/130
27.9
0.4
80.0
25.0
Financial Snapshot (INR b)
Y/E Mar
2018E 2019E 2020E
Net Sales
12.7 14.6 16.4
EBITDA
3.0
3.8
4.6
PAT
1.3
2.0
2.6
EPS (INR)
5.8
8.9 12.0
Gr. (%)
102.0 53.5 34.6
BV/Sh (INR)
56.4 65.3 77.3
RoE (%)
10.8 14.6 16.8
RoCE (%)
10.4 11.4 11.1
P/E (x)
21.9 14.3 10.6
P/BV (x)
2.3
1.9
1.6
EV/EBITDA (x)
10.5
8.0
5.9
Shareholding pattern (%)
As On
Sep-16 Jun-17 Sep-17
Promoter
75.0
75.0
75.0
DII
5.9
3.6
4.1
FII
0.4
0.2
0.2
Others
18.8
21.2
20.8
FII Includes depository receipts
Sanghi Industries Limited (SIL) is a Gujarat-based cement company, with capacity of
4.1mt. Around ~90% of its volumes are sold in Gujarat. An integrated cement unit, SIL
owns a 63MW captive power plant and a port. SIL is one of the lowest cost cement
producers due to its quality limestone, locational advantage and strong integration
across the manufacturing value chain (SIL’s cost/t of INR2,766 v/s industry average of
INR3,603).
SIL’s strength lies in its access to 1b tonne of quality marine limestone reserves,
which should allow it to sustainably add capacity over the next 15 years.
We expect SIL’s margins to expand by 8.4pp over FY17-20, led by its three-pronged
strategy: (i) commissioning of a waste heat recovery system (WHRS), (ii) focusing more
on the coastal mode of transportation by way of acquisition of ships and (iii) achieving a
favorable revenue mix with higher proportion of Portland Pozzolana Cement (PPC).
In our view, SIL is a strong candidate for a re-rating, led by (i) expected increase in
its capacity from 4.1mt now to 8.2mt over the next 30 months and (ii) anticipated
scale benefits led by diversification into new higher-priced markets.
We expect EBITDA CAGR of 33% over FY17-20, with improved pricing and positive
operating leverage leading to 26% CAGR in EBITDA/t. This is likely to drive PAT
CAGR of 61% to INR2.63b over FY17-20. We expect RoE to increase by 11pp to
16.8% in FY20, led by a sharp uptick in profitability.
We initiate coverage on SIL with a Buy rating and a target price of INR157 (23%
upside; valuing its present capacity of 4.1mt at USD120 EV/tonne; incremental
capacity of 4.1mt likely to be added by FY20 at USD78/t at a 35% discount to
replacement cost of USD120/t).
Strong integration, access to limestone reserve are differentiators
Sanghi Industries
Ready for the Next Leap
Abhishek Ghosh
+
91 22 3980 5436
Abhishek.ghosh@motilaloswal.com
Please click here for Video Link
In our view, strong integration across the cement production value chain –
from access to limestone reserve to multi-fuel kiln to captive thermal power
plant to captive jetty for outward coastal movement of cement and inward
movement of imported input material – makes SIL one of the lowest-cost
cement producers in India, also providing it with a strong competitive edge in
terms of profitability.
SIL enjoys access to 1b tonne of extremely good-quality marine limestone
reserve, which can support operations at 2x present capacity for over 100
years. Additionally, the limestone mines have deposits at surface, which can
be extracted by surface mining instead of the relatively expensive
conventional technique of blasting. This helps SIL significantly in terms of cost
of mining.
SIL’s margins are likely to expand by 8.4pp over FY17-20, led by its cost-
control program, which encompasses installation of the 15MW WHRS and
acquisition of two ships. Around 20% of its power requirement will be low-
cost post the installation of the WHRS.
3
Margin improvement led by cost initiatives and favorable revenue mix
26 December 2017

Sanghi Industries
Stock Performance (1-year)
This is likely to result in savings of INR150-170m post stabilization. The other
initiative of acquiring two ships will likely lead to more use of the cost-efficient
coastal route for transportation. Additionally, SIL is likely to increase its
proportion of PPC from 35% now to ~50% over the next 18-24 months, for
which it has installed fly ash silo.
SIL targets to increase its cement grinding capacity from 4.1mt now to 8.2mt
over the next 30 months by adding one more line of clinker unit at its existing
location, as well as split grinding units of 2mt each in Kutch and Surat. The new
grinding units would be largely utilized to cater to the better-priced markets of
Mumbai and Kerala, which can be tapped by way of coastal movement – an
efficient mode of cement transportation.
While diversification into the newer markets will provide scale, it will also result
in improved profitability. We also see SIL as a strong re-rating candidate, as the
expected increase in capacity over the next few years should help it achieve
significant scale benefits.
At CMP of INR127/share, SIL trades at EV/EBITDA of ~8.0/5.9x on FY19E/20E
earnings (adjusted for CWIP related to doubling of capacity). It trades at EV/t of
USD115/80 on FY19/20 capacity. We value SIL’s present capacity of 4.1mt at
EV/tonne of USD120 and proposed capacity expansion of 4.1mt at USD78/t
(35% discount to replacement cost of USD120/t) to capture the low capital cost
for incremental capex. Hence, we value its overall capacity of 8.1mt (with
additional debt of INR12b for additional capacity) at USD99/t. Incremental cost
of capacity addition is lower at USD45/t, as against the industry standard of
USD120/t, as the expansion is brownfield in nature and a significant amount of
capex has been incurred toward the ancillary set-up.
We thus initiate coverage on SIL with a
Buy
rating and a target price of
INR157/share, implying upside of ~23% from the current levels.
Capacity-led re-rating on the cards; diversification to bring in scale
Valuation and view
Exhibit 1: Comparative Valuations
Company
Sanghi
Sagar Cement *
Heidelberg*
JK Lakshmi
Orient Cement
JK Cement
Birla Corporation
India Cement
Ramco Cements
Dalmia Cements
FY17
Capacity (mt)
4.1
4.3
5.4
10.9
11.6
12.3
15.4
16
17
25
EV/ton (USD/t)
FY19E
115
58
115
77
88
119
116
77
172
201
FY20E
80
53
115
72
86
117
101
73
162
195
EV/EBITDA (x)
FY19E
8.0
8.1
10.0
9.7
8.9
9.6
10.4
7.8
13.6
14.8
FY20E
5.9
6.6
7.9
7.8
6.1
8.3
7.7
6.5
10.6
12.5
Source: Company, MOSL, *Bloomberg
26 December 2017
4

Sanghi Industries
Lowest-cost producer in commodity business
Locational advantage and integration across value chain make SIL one of
the lowest-cost producers in the country
Availability of high-quality marine limestone by way of surface mining at close
proximity to the clinker unit has ensured lower raw material cost for the company
than industry average. Additionally, the recently installed conveyor belt for
transporting limestone is expected to bring in further cost savings, in our view.
Multi-fuel kiln offers flexibility in terms of fuel cost, providing the company an edge
over competitors. Captive thermal plant of 63MW makes it self-reliant for power with
low cost. Availability of low-priced lignite at close proximity further increases
flexibility, reducing overall power & fuel cost.
Besides this, the focus on coastal mode for cement transportation lowers effective
freight cost for the company. Infrastructure in the form of own captive port helps in
further reducing port charges and provides flexibility in handling in-bound (fuel) and
outbound cargo (clinker and cement).
Exhibit 2: SIL’s cement production cost has remained lower than industry average over the
years
Total cement production cost for MOSL Universe (INR/t)
Total cement production cost for Sanghi (INR/t)
3,000
3,412
FY12
3,293
3,714
FY13
3,421
3,018
FY14
3,606
3,311
FY15
3,685
2,924
FY16
3,601
2,766
FY17
Source: Company, MOSL
Exhibit 3: Even in FY17, SIL was at par with Shree in terms of being the lowest cost producer
4,285
Comparison of Sanghi's total production cost with peers (INR/t)
4,120
3,882
3,772
3,639
3,606
3,326
3,319
3,198
3,056
2,766
2,749
ACC
ICEM
JKCE
UTCEM
BCORP
DBEL
ACEM
TRCL
JKLC
ORCMNT
SIL
SRCM
Source: Company, MOSL
26 December 2017
5

Sanghi Industries
Enjoys lowest RM cost curve in industry
SIL is highly integrated across the value chain, with limestone reserve at close
proximity to the clinker unit (just ~3km away). The recent commissioning of the
conveyor belt for cement transportation is expected to further reduce freight
cost for limestone. Furthermore, the captive thermal power plant with capacity
of 63MW is just ~7km away from the clinker unit, which makes it self dependent
for power. The grinding unit is at close proximity of ~10km from the clinker unit,
which privides the crucial logistical advantage. The captive port meant for
inbound (fuel) and outbound (cement) cargo further ensures savings in port
charges.
Exhibit 4: Proximity to limestone reserve
Source: Company, MOSL
Exhibit 5: Limestone deposits in Kutch
Source: Company, MOSL
26 December 2017
6

Sanghi Industries
The company enjoys significant competitive edge in terms of lower RM cost, which
is derived from:
1) Limestone mine at close proximity to clinker unit
2) Availability of limestone by way of surface mining
3) Abundant availability of limestone at depth of ~30 metres, which reduces cost of
mining; peers have to go as deep as 70 meters to extract limestone of good
quality
4) Tie-up for flyash at a distance of 160km through UMPP at Mundra, which
provides freight cost advantages
Exhibit 6: SIL’s raw material cost has remained significantly lower than industry average
over the years
Raw material cost for MOSL universe (INR/t)
Raw material cost for Sanghi (INR/t)
532
587
656
672
687
686
192
FY12
83
FY13
341
FY14
161
FY15
332
FY16
273
FY17
Source: Company, MOSL
Exhibit 7: Comparison of SIL’s raw material cost with peers
FY17 Raw material cost/t for Sanghi and MOSL cement universe (INR/t)
957
879
841
822
822
802
787
708
493
384
305
273
JKLC
JKCE
DBEL
BCORP
TRCL
UTCEM
ICEM
ACC
ORCMNT
ACEM
SRCM
SIL
Source: Company, MOSL
Limestone reserve is at a distance of ~3km from the clinker unit, which provides
a huge freight cost advantage to SIL. Additionally, the company has built a
conveyor belt (at a cost of INR150m) to transport limestone from the mine to
the clinker unit. This is expected to ensure savings of INR10-15/t in the form of
lower freight cost.
As limestone is available at the surface of the mine, it is extracted by way of
surface mining, which is far cheaper than conventional methods of mining
(involve procedures like blasting). Notably, limestone is extracted at a depth of
30 meters, as against conventional depth of 70 meters.
Other additives like laterite, clay and silica (which form ~15% of overall RM
costs) are also available at close proximity of ~10-15km from the limestone
mines.
7
26 December 2017

Sanghi Industries
Efficient power & fuel cost curve
Multi-fuel kiln and captive power plant help achieve cost efficiencies
Power & fuel cost per tonne is lower for SIL, as:
Power required for cement operations is procured from its low-cost captive unit.
Thermal power plant is multi-fuel, with the flexibility of using lowest-cost fuel.
Addition of WHRS will further reduce power cost.
Availability of lignite offers a competitive edge, especially when petcoke prices rise
sharply.
Fuel cost advantage
SIL’s kiln is one of the largest in the industry with multi-fuel technology, which
allows it to use the cheapest source of fuel. The sources of fuel for feeding the
kiln are coal, petcoke and lignite. The present fuel mix is ~66% lignite and 34%
coal. Petcoke and coal are typically imported and handled at its captive
port/jetty, which offers additional advantage of lower port charges.
The company further benefits from low-cost lignite, which is available from
near-by mines of GMDC (at a distance of 35kms from the plant). The cost
differential of lignite on per kcal basis is ~27% that of imported petcoke/coal,
which lowers its overall power and fuel cost/t. The lower GST rate on lignite (5%
v/s 28% previously), along with provision of input credit, can make it an
extremely viable proposition for SIL. The contract for lignite with GMDC is done
for a period of 2-3 months depending upon the requirement of fuel.
Lignite prices declined after it was brought under the 5% tax bracket under GST
v/s 18% pre-GST. The cost differential between petcoke and lignite is still
substantial, with petcoke being priced at INR1/kcal and lignite at INR0.73/kcal.
The hike in import duty for petcoke puts SIL in a cost-advantageous position:
The company is likely to see a minimal impact on its power & fuel cost/t due to
an increase in import duty on petcoke, as its dependence on lignite is to the
extent of ~66%, which isolates its power & fuel cost/t to great extent. Its P&F
cost/t will likely be impacted to the extent of increase in imported coal prices
(34% of its fuel mix) due to demand push. Additionally, the industry is expected
to increase cement prices to offset the impact of cost push. As SIL is expected to
continue having a favourable cost curve in comparison top peers, price hikes will
result in a margin improvement for SIL (not factored in our estimates).
Lignite has high content of volatile matter, which makes it unsuitable for long-
distance transportation. It has high moisture content and ignites spontaneously,
causing problems in transportation and storage. Therefore, accumulating large
stockpiles of lignite is generally avoided. Also, the high water content makes it
difficult to ship, leading to increased transportation cost – water transport is
considered unsuitable due to safety and economic reasons. As a result, lignite is
usually used in power stations constructed very close to mines, and the
exported volume of lignite is insignificant in comparison with coal exports.
Hence, SIL’s unit has the inherent advantage of being located close to the lignite
mines.
26 December 2017
8

Sanghi Industries
Exhibit 8: Comparison of SIL’s power & fuel cost with average MOSL cement universe
Power and Fuel cost for MOSL universe (INR/t)
1,265
Power and Fuel cost for Sanghi (INR/t)
1,127
925
1,054
768
799
982
FY12
995
FY13
959
FY14
996
FY15
844
FY16
799
FY17
Source: Company, MOSL
Exhibit 9: SIL’s power & fuel cost is around industry average and shall further improve
post commissioning of WHRS
1,061
FY17 power and fuel cost/t for Sanghi and MOSL cement universe (INR/t)
1,017
965
948
799
793
783
712
650
620
501
Source: Company, MOSL
Exhibit 10: Comparison of various alternate fuels
Parameter
Gross Calorific Value (GCV)
Pet Coke
Very High - 8200 Kcal/Kg
guaranteed
Lignite
VERY LOW - 3000 to 3200
Kcal/Kg, approx.
VERY HIGH (15 TO 30%) -
unburnt loss due to high ash
content
Natural item
Coal
LOW - varies from 4000 to 6200
Kcal/Kg approx.
MEDIUM TO HIGH - percentage
of ash content varies from 10 to
20% or may be more depending
upon different type of coal
(Domestic/Imported)
Natural item
WILL VARY - as natural product
HIGH TO MEDIUM - approx. 1.5
- 2 times higher than pet coke
VERY HIGH - most of the
material needs grinding
HIGH - has high moisture - does
suck moisture from land and
atmosphere
HIGH - high initial burning loss;
gets self-burning in heavy
sunlight
Source: www.flamingotraders.in
ASH
Nil (< 1%) - Low ash related
pollution problem - also
material unburnt is reusable as
nil ash content
Manufactured product
Consistent
Very Low - nearly 2 - 3 times
lesser than lignite
Very Low - approx. 20 to 25%
material needs grinding
LOW - very low moisture - does
not suck moisture by self
Nature of item
Quality
Material handling
Grinding requirement
WILL VARY - as natural product
HIGH - approx. 2 3 times higher
than pet coke
VERY HIGH - most of the
material needs grinding
Moisture content
HIGH - has high moisture - does
suck moisture from land and
atmosphere
HIGH - high initial burning loss;
gets self-burning in heavy
sunlight
Volatile matters
LOW - low initial burning loss;
also is not self-burning in open
space due to heavy sunlight
26 December 2017
9

Sanghi Industries
Captive power plant
SIL’s 63MW of captive thermal power plant is located at a distance of ~3km
from the grinding unit. This plant supplies the entire power requirement to the
cement unit – it can use coal, petcoke and lignite based on cost differential,
providing additional advantage of low-cost power among available fuel.
Exhibit 11: 63MW captive thermal power plant
Source: Company, MOSL
SIL is also adding a waste heat recovery system (WHRS) with capacity of 15MW
at estimated capex of INR1.25b (likely to get commissioned by end-FY18), which
should reduce its power cost further. Cost of power generation by WHRS
(~INR0.5/unit) is ~80% lower than cost of power generated from the thermal
power plant (~INR3.5/unit).
SIL would have excess power post the commissioning of WHRS, which would be
sold to the grid as it has connectivity to the grid line.
Exhibit 12: 15MW WHRS under construction
Source: Company, MOSL
26 December 2017
10

Sanghi Industries
Coastal transport mode provides distinctive advantage
SIL’s freight cost is expected to trend structurally lower on account of:
Higher proportion of sales via coastal transportation for serving the new markets of
Mumbai and Kerala.
Ramp-up of its new coastal terminals in Mumbai and Navlakhi.
Owned captive port ensures lower port charges.
Acquisition of bulkers to further reduce dependence on external ships.
SIL incurs higher freight cost than peers as it caters to the higher-lead-distance
markets of Ahmedabad and Surat by way of road. The lead distances for
Ahmedabad and Surat are ~500km and ~750km, respectively, much higher than
industry average of ~400-500km, as limestone mines are located quite far from
the focus markets. However, it recently commissioned two new coast terminals
in Navlakhi and Mumbai, which will be utilized to cater to the Rajkot and
Mumbai markets, respectively, by way of coast, thereby likely reducing freight
cost per tonne going forward.
Additionally, the company has created export markets for both clinker and
cement by using the coastal mode of transportation, thereby benefiting from
lower freight cost and positive operating leverage. SIL has also created a decent
export market for itself in the Middle East and Sri Lanka.
In our view, the proportion of sales from the higher-lead-distance (road)
Ahmedabad and Surat markets has peaked and should structurally decline. This
would reduce overall freight cost per tonne for the company.
Exhibit 13: Average freight cost for MOSL universe and SIL
Freight cost for MOSL universe (INR/t)
Freight cost for Sanghi (INR/t)
1,472
1,143
1,149
1,404
1,163
1,153
687
FY12
859
FY13
977
FY14
1,046
FY15
1,056
FY16
1,057
FY17
Source: Company, MOSL
26 December 2017
11

Sanghi Industries
Exhibit 14: Coastal distribution strategy
Source: Company, MOSL
Exhibit 15: Lead distances for Ahmedabad and Surat higher than industry
Source: MOSL, Company
26 December 2017
12

Sanghi Industries
Ramp-up of terminal in Dharamtar
The company recently commissioned the Dharamtar terminal (situated at
~62km from Mumbai) with a vision to increase sales in the higher-priced
Mumbai and Pune markets. The terminal (constructed at a cost of INR150m)
should reduce freight cost by almost 33% compared to road, making the sale of
cement from Kutch to the Maharashtra market a viable proposition. The
terminal will also play an important role when SIL doubles its capacity over the
next 30months in displacing volumes to the markets of Maharashtra.
Exhibit 16: Terminal at Dharamtar, Maharashtra
Source: Company, MOSL
Navlakhi terminal
The terminal has been constructed (at a cost of INR150m) with a strategy of
selling cement volumes to Rajkot and nearby markets at efficient freight cost.
Ramp-up of the terminal should result in lower freight cost.
Exhibit 17: Terminal at Navlakhi
Source: Company, MOSL
26 December 2017
13

Sanghi Industries
Acquisition of bulkers to further reduce dependence on external ships
SIL has acquired two bulkers at an estimated cost of INR420m in 2QFY18, which
would further reduce transportation cost by ships. SIL was constrained on higher
movement of cement by the coastal route due to higher demand for coastal
ships. The bulkers would be used to transport cement from Kutch to the
Navlakhi terminal and also to the Mumbai and Kerala markets, thereby reducing
freight cost further and increasing its ability to displace higher volumes to these
markets.
Exhibit 18: Owned captive ports…
Source: Company, MOSL
Exhibit 19: …should provide coastal advantage of low cost transportation
Source: Company, MOSL
26 December 2017
14

Sanghi Industries
Access to large limestone reserve – a major advantage
Competitive edge over others in an environment of higher bidding price for
limestone
Formation of mine for SIL in the Kutch limestone cluster due to receding sea levels has
left very good quality of soft marine limestone.
Limestone is available at the surface, which can be extracted through surface mining,
leading to much lower cost of extraction for SIL (compared to peers, which use the
relatively expensive conventional techniques of blasting).
The limestone reserve size is ~1b tonne, which can support operations at 2x current
capacity for more than 100 years of operations.
The recent bidding of limestone reserve happened at a premium. This provides
existing players like SIL with access to large limestone reserves with a distinctive
advantage over new players acquiring mines at a higher price.
High calcium content in limestone further reduces RM cost due to reduced levels of
overburden.
SIL’s limestone mine was formed after the sea receded from the limestone belt.
The company now possesses soft marine limestone, which is of very good
quality with high calcium content.
The limestone can be extracted by way of surface mining, as against the
relatively expensive blasting technique.
Exhibit 20: Surface mining
Source: Company, MOSL
Sitting on huge potential reserve of over 1b tonne
SIL is sitting on huge ‘A’ grade reserves of more than 1b tonne of limestone. The
reserve can support operations at 2x current capacity for more than 100 years.
This is extremely critical, particularly when SIL is looking to double its capacity
over the next 2-3 years. The lease with the mining department for the limestone
reserve is up to the year 2046 post the amendment in the new MMDR act.
26 December 2017
15

Sanghi Industries
Exhibit 21: Limestone reserves
Source: Company, MOSL
Newer assets to come at significant premium; reduce competitive
advantage with legacy assets
The recent limestone bids by Emami Cement in Nagaur and Dalmia Cement in
Chhattisgarh point to a sharp increase in the limestone mine acquisition cost to
INR400-600/tonne, which implies a significant premium to the current cost of
raw material.
As can be seen from the last few limestone auctions, the bid prices have been
on a rise (increased from INR284/ton in February 2016 to INR623/ton in July
2017).
Average raw material price for cement companies is INR650/ton. This includes
royalty charge of INR80/t and DMF charge of ~INR20/t. Apart from the
limestone acquisition cost, handling, freight and additive costs are the other
components of the raw material costs.
Thus, acquiring limestone at a bid price of ~INR400-600/ton will lead to
~INR300/ton increase in raw material cost, which translates into INR21/bag
increase in price of cement. Thus, players acquiring new capacities will be at
cost disadvantage than the players holding legacy assets. This implies that
players with large limestone reserve are likely to get premium multiple on
account of the competitive edge they possess.
In an environment of very limited opportunities for large-scale, low-cost
brownfield expansion and rising capex for the new plants, SIL is very well
positioned to benefit from its available resources.
Bid price by cement companies for limestone(INR/ton)
Dalmia
Bharat in
Rajasthan
Dalmia
Bharat in
Orissa
5-Jan-17
12-Jan-17
Dalmia
Bharat in
Chattisgarh
Ambuja
Cement in
Maharashtra
Exhibit 22: Limestone bid prices on a rise
800
600
400
200
0
19-Feb-16
28-Sep-16
12-Jan-17
2-May-17
3-Jul-17
Source: Company, MOSL
Shree Cement
in Chattisgarh
Emami
Cement in
Rajasthan
Emami
Cement in
Rajasthan
26 December 2017
16

Sanghi Industries
Demand market for SIL is getting favorable
The western region is likely to witness healthy demand growth over FY17-20, led by
infrastructure spends in Gujarat and Maharashtra.
Utilization improvement for the region is likely to be healthy over the next three
years, led by better demand and minimal capacity addition.
SIL is likely to see significant market share gains in the region, led by its target to
double capacity over the coming few years.
The company’s market mix is likely to turn favorable, driven by higher sales from the
better-priced markets.
Healthy demand improvement in the western region
Cement demand in the western region has been lackluster over the past 2-3 years as
the Maharashtra market remained subdued (especially rural housing) on account of
poor monsoon. With no meaningful pick-up in infrastructure activity, cement
demand in the west grew by a muted ~2% YoY in FY16 and declined by ~8% in FY17.
Demand in FY17 was also weak due to the demonetization-led impact on the real
estate market of Gujarat.
Exhibit 23: Trend in demand in western region
Demand in West (mt)
14%
8%
1%
3%
2%
2%
-8%
41.9
FY12
42.3
FY13
43.6
FY14
44.5
FY15
45.4
FY16
41.7
FY17
45.1
FY18E
48.2
FY19E
52.1
FY20E
7%
8%
YoY Growth (%)
Source: Company, MOSL
We expect demand from the western region to grow at a CAGR of ~8% over FY17-
FY20, led by a pick-up in infrastructure activity (on commencement of various
infrastructure projects) and rural housing (on good monsoon) in Maharashtra
(witnessed healthy volume growth for April-June quarter).
Demand from the Gujarat market is also likely to be healthy on account of higher
infrastructure activity (on pre-election spend). While there has been some
demonetization-led impact on the real estate market in Gujarat, we believe the
aggressive launch of affordable housing projects will partially compensate for the
loss of demand.
Exhibit 24: Infrastructure projects in Mumbai
Infrastructure projects in Mumbai
Mumbai Coastal Road project
Mumbai Trans-Harbor Link
33.5-km Colaba-Bandra-Seepz Metro link
Three new Metro lines under MMRDA
Mumbai Trans Harbor Link from Sewri to Nhava Sheva
Navi Mumbai Airport
Investment planned in INR Bn.
130
180
231
21
10
145
Source: Vibrantgujarat
26 December 2017
17

Sanghi Industries
Exhibit 25: Infrastructure projects in Gujarat
Infrastructure projects in Gujarat
Metro Link Project
Gujarat Finance Tech city GIFT
Investments for top four cities
Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT)
Other projects and initiatives
Delhi – Mumbai Industrial Corridor and the Dholera Special Investment Region
Dahej Petrochemical & Petroleum Investment Region (PCPIR)
Development of Ahmedabad, Surat, Vadodara and Rajkot as Mission Cities
Development of new townships around current and emerging economic centers
Investment
planned in
INR b
360
323
101
93
26
Source: Vibrantgujarat
Exhibit 26: Proposed urban development projects in Gujarat
Source: vibrantgujarat
26 December 2017
18

Sanghi Industries
Upcoming road projects in Gujarat
Four-laning of Bhavnagar-Talaja:
Four road projects worth INR26.4b connecting
religious and tourist places between Bhavnagar and Somnath in Gujarat were
awarded in May 2016. The 256km-long Bhavnagar to Somnath section of NH-8E
(New NH-51) is an important link to connect religious and tourist places of
Talaja, Mahuva, Palitana, Island of Diu, Somnath Temple, Gir National Park,
Porbandar and Dwarka. The NHAI has awarded a contract for four-laning of four
packages of the section of a total length of 175 km. The project will also provide
improved connectivity to the ports of Alang, Pipavav, Jafarabad, Gogha and
Veraval. Since the project would be a cement concrete highway, we expect
significant demand boost to the cement sector.
Six-laning of Kishangarh-Udaipur-Ahmedabad:
The 550km Kishangarh-
Ahmedabad stretch has been divided into five stretches, which include
Kishangarh-Gulabpura, Gulabpura-Chittorgarh, Chittorgarh-Debari, Debari-Kaya
and Kaya-Himmatnagar. Work will start soon on some stretches.
Capacity utilization to see uptick FY18 onward
We expect capacity utilization for the western region to increase from ~74% in FY17
to ~81% by FY20, led by demand improvement and limited capacity addition over
the next 18 months. Capacity utilization for the region has declined from ~83% in
FY13 to 74% in FY17 due to demand weakness over the last 2-3 years, as well as
continued influx of material from the neighboring states of Rajasthan and AP.
We expect pricing power for the region to be healthy going forward, led by
sustained improvement in the utilization levels over the next 2-3 years.
Exhibit 27: Trend in cement capacity and utilization
Cement Capacity in West (mt)
85%
86%
83%
84%
85%
84%
76%
79%
81%
West Capacity Utilization (%)
74%
48
FY11
50
FY12
52
FY13
52
FY14
53
FY15
55
FY16
58
FY17
60
FY18E
62
FY19E
67
FY20E
Source: Company, MOSL
Prices in western region
Prices in west stood at INR 274/bag in November v/s INR276/bag in October
2017 (-1% MoM).
Prices in Pune, which had increased by INR20/bag in November, declined by
INR25/bag in the second week.
26 December 2017
19

Sanghi Industries
Exhibit 28: Prices stable across most regions (prices in INR/bag) in November 2017
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
North Average Prices East Average Prices West Average Prices South Average Prices
Central Average
Prices
National Average
Prices
Source: Company, MOSL
Exhibit 29: Prices in west decreased by 1%MoM in November 2017 (prices in INR/bag)
299
290
283
268
279
276
274
West Average Prices
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Source: Company, MOSL
SIL consolidating position in Gujarat market
SIL is the third largest cement player in Gujarat by capacity, after Ultratech and
Ambuja Cement. It enjoys strong brand royalty for its brand Sanghi Cement, and is
priced at par with some tier-1 players or at marginal premium to them in select key
markets.
By doubling its capacity over the next 30 months, the company is likely to expand its
capacity share from ~15% to ~26%; other players are unlikely to add meaningful
capacity in the region.
Exhibit 30: SIL - current capacity share in Gujarat
Others, 19%
Ultratech, 45%
Sanghi, 15%
Ambuja, 21%
Source: Company, MOSL
26 December 2017
20

Sanghi Industries
Diversification into other markets
SIL sells close to ~90% of its volume in Gujarat alone, with strong presence in
Ahmedabad. However, with its next phase of capacity expansion to ~8mt, the
market mix would tilt toward higher-priced markets of Mumbai and Kerala. The
volumes to those markets would be transported by way of coastal route, making
it viable because of affordable freight cost.
Footprint expansion into Maharashtra and Kerala would also provide SIL access
to the newer markets, and help achieve better utilization when it doubles its
capacity over the next 2-3 years.
Exhibit 31: SIL market mix
Maharashtra, 7%
Others, 4%
Gujarat, 89%
Source: Company, MOSL
PPC mix to change
With
t
he addition of the new silo for flyash, and additional marketing strategy
the proportion of PPC for SIL is set to increase from present 35% to ~50% in next
18-24 months. As SIL’s target market is more conducive for Ordinary Portland
Cement (OPC), hence PPC for SIL as overall proportion of volume will be
constrained at 50% as against all India average of 65-70%.PPC on account of
higher blending ratio enjoys higher margins as compared to OPC which is likely
to result in overall margins improving for SIL over the next 18-24 months.
Exhibit 33: …to 50% resulting in better margins
Projected product mix
Exhibit 32: PPC mix to change from current 35%...
Current product mix
PPC
35%
OPC
65%
OPC
50%
PPC
50%
Source: Company, MOSL
Source: Company, MOSL
26 December 2017
21

Sanghi Industries
Play on multiple re-rating via doubling of capacity
SIL plans to double its capacity from present levels of 4.1mt to 8.2mt at estimated
incremental capex of INR12b by FY20. This translates into additional capacity being
created at USD45/t, which is at a discount to the cost of creating an integrated cement
plant. Hence, the RoCE profile of new investment will be significantly higher, raising
the overall RoCE profile of SIL.
Profitability of new capacity to be significantly higher compared to present capacity, with:
Higher exposure to the better-priced markets of Mumbai and Kerala.
Greater proportion of blended cement from new capacity, where EBITDA/t is
higher by almost INR200 due to lower cost.
Freight cost advantage from movement of cement through cost-efficient coastal
route.
Valuation re-rating: SIL is likely to see multiple re-rating, led by doubling of capacity
over the next 30 months. JKLC and JK Cement had witnessed multiple re-rating from
EV/tonne of USD50-60 to USD100 when they had increased capacity in excess of 50%.
Efficient capacity expansion:
SIL is doubling its capacity from 4.1mt to 8.2mt at
estimated capex of INR12b, which translates into capex of USD45/t. Estimated
capex for the new unit is lower than regular capex of USD80-100/ton, as major
part of investments in township and other ancillary activity has already been
incurred.
Clinker capacity addition:
SIL’s clinker capacity in Kutch will be increased to
~6mt by adding another line of 10,000 tonnes per day at the existing location.
There is sufficient land available for expansion of the project at the existing
location, with total land requirement of ~31ha. The present clinker line occupies
total land of 70ha.
Exhibit 34: SIL will incur INR 12bn of capex for capacity addition of 4.2mt
Clinker Capcity
Grinding Capacity
INR 2bn
Captive Power
INR 3.5bn
INR 6.5bn
Source: Company, MOSL
Further scope to augment capacity of clinkerization unit:
The new clinker line
of 10,000tpd could be further increased to 12,000tpd (0.7mt) with minor
modifications and capex.
Split grinding units:
SIL would set up two grinding units of 2mt each, with one of
them in proximity to the mother clinker unit in Kutch (~10km away). The other
split grinding unit would be set up in Surat to cater to the Gujarat market.
Clinker from the Kutch unit would be transported to Surat GU by way of coastal
22
26 December 2017

Sanghi Industries
shipping, where freight cost savings would be to the extent of ~30% v/s road
freight. The company would be required to construct an associated terminal for
clinker transportation to Surat, which will require capex of INR150m.
Product mix favorable:
The present product mix suggests that ~35% of overall
volume is sold as PPC, where profitability is much higher than the traditional
OPC product. However, under the new expansion, the integrated grinding unit
would produce OPC, while the split grinding unit would produce only PPC of
higher profitability. Hence, the product mix for the expanded unit would be
50:50 toward OPC:PPC, as against 65:35 now.
Captive power plant and WHRS:
The expanded capacity’s power requirement
would be met via its captive power plant of 63MW. Total power availability is
expected to be 139 MW, implying excess power in the unit, which could be sold
in the grid.
Market mix turning favorable:
The grinding capacities at Kutch and Surat are
likely to improve the market mix for SIL, as it increases sales to the higher-priced
markets of Maharashtra and Kerala. The new integrated grinding unit in Kutch
will be mainly utilized to cater to these markets via the cost-efficient coastal
route. As there exists price/realization difference of INR20/bag, profitability
from these newer markets is expected to be significantly higher.
Freight cost reduction for Surat market
At present, the Surat market is serviced by way of road, where the lead distance
and cost of transportation are high. With the setting up of a grinding unit in
Surat and an associated coast-based terminal, freight cost would reduce on
account of the shift in the transportation mode from road to sea, which is ~30%
cheaper. We believe this should result in freight cost savings of INR50-
100/tonne, improving the unit’s overall profitability.
Valuation re-rating led by capacity expansion
Cement companies tend to trade at different bands of EV/tonne based on their
capacity and market diversification. It has been observed that stocks have got
re-rated in the past post capacity addition and forays into new markets, as it
reduces concentration risk on earnings.
In case of JK Lakshmi Cement and JK Cement, it has been observed that when
they increased their respective capacities, they moved up the trading band of
EV/tonne from sub-USD70 to USD100. Additionally, when Shree Cement
doubled its capacity from 13mt to 26mt, the stock got re-rated and started to
trade at EV/tonne of USD200 from USD100 previously.
SIL is likely to follow suit in terms of re-rating, given its plans to double capacity
from 4.1mt to 8.2mt at incremental capex of INR12b over the next 30 months.
Capacity expansion at EV of USD45/t would result in a reduction in overall
blended EV/tonne. New capacity would thus generate a higher RoCE, which
would improve the overall RoCE profile of SIL.
We expect SIL to report revenue CAGR of 18% to reach INR16.4b over FY17-20.
This is expected to be driven by 6% volume CAGR, led by (i) an improving
demand scenario in its core markets and (ii) higher sales to the markets of
Maharashtra due to higher movement of cement through coastal routes.
Accordingly, EBITDA should increase at a CAGR of 33%, with margins
23
26 December 2017

Sanghi Industries
improvement led by better pricing in its focus markets, cost-saving initiatives
and positive operating leverage. Similarly, EBITDA/t is likely to increase at a
CAGR of 26% to INR1363 in FY20.
Additionally, the transition from high-cost debt of Piramal at ~15% to low-cost
debt at ~11% would further bring down interest cost savings by INR100-120m
over FY18-FY20
This is likely to translate into earnings CAGR of ~61% over FY17-20E, with RoE
likely to be in excess of ~16% in FY20 (implying expansion of ~11pp over FY17
RoE of sub-6%).
At CMP of INR127/share, SIL trades at EV/EBITDA of ~8.0/5.9x on FY19E/FY20E
earnings (adjusted for CWIP related to doubling of capacity). It trades at EV/t of
USD115/80 on FY19/FY20E capacity. We value SIL’s present capacity of 4.1mt at
EV/tonne of USD120 and the proposed capacity expansion of 4.1mt at USD78/t
(35% discount to replacement cost of USD120/t) to capture the low capital cost
for incremental capex. Hence, we value overall capacity of 8.2mt (with
additional debt of INR12b for additional capacity) at USD99/t. Incremental cost
of capacity addition is lower at USD45/t v/s industry standard of USD120/t, as
expansion is brownfield in nature and as significant amount of capex has been
incurred toward the ancillary set-up.
We thus initiate coverage on SIL with a Buy rating and a target price of
INR157/share, implying upside of ~23% from present levels.
Existing operations
4.1
120
31980
6300
Expanded operations Combined operations
4.1
8.2
78
20787
12000
99
52767
18300
34467
157
127
23%
Source: Company, MOSL
Exhibit 35: SOTP Valuation
INR mn
Capacity (mt)
Multiple (EV/tonne) USD
EV
Less debt
Market value
Per share value (INR)
CMP (INR)
% Upside
Exhibit 36: Comparative Valuations
Company
Sanghi
Sagar Cement *
Heidelberg*
JK Lakshmi
Orient Cement
JK Cement
Birla Corporation
India Cement
Ramco Cements
Dalmia Cements
FY17
Capacity (mt)
4.1
4.3
5.4
10.9
11.6
12.3
15.4
16
17
25
EV/ton (USD/t)
FY19E
FY20E
115
80
58
53
115
115
77
72
88
86
119
117
116
101
77
73
172
162
201
195
EV/EBITDA (x)
FY19E
FY20E
8.0
5.9
8.1
6.6
10.0
7.9
9.7
7.8
8.9
6.1
9.6
8.3
10.4
7.7
7.8
6.5
13.6
10.6
14.8
12.5
Source: Company, MOSL, *Bloomberg
26 December 2017
24

Sanghi Industries
SWOT analysis
Abundant availability
of high-quality
marine limestone by
way of surface mining
results in lower raw
material cost
Strategically placed
near coast to use
efficient mode of
transportation of sea
Integrated operations
with captive power
plant, port facility
High dependence on
single market of
Gujarat
Single market
concentration high
Doubling of capacity
from 4.1mt currently to
8mt over the next 24
months
Diversification into new
higher-priced markets
like Mumbai,
Mangalore, Cochin by
way of coastal mode
Product mix
enhancement to higher
proportion of PPC
Threat from Gujarat
based players to
increase capacity in the
cluster
Price volatility in the
core markets
26 December 2017
25

Sanghi Industries
Bull & Bear case
Bull case
In the bull case, we assume volume growth for SIL to increase at CAGR of 9%
over FY17-FY20E led by increased demand from focus markets of Gujarat as also
higher volumes sold in markets of Mumbai and Cochin.
We assume realization improvement to increase at CAGR of 12% over FY17-
FY20E due to improved utilization of Gujarat market led by increased demand,
no incremental supply pressure in the core markets, diversifying to newer
markets with higher realization.
This translates into margin improvement to 29.6% in FY20 from 19.9% in FY17.
EBITDA/t will likely increase at CAGR of 28% between FY17-FY20 to INR1427
largely led by pricing improvement in core and focus markets as also higher
proportion of PPC sales in overall volumes.
This translates into earnings CAGR of 72% over FY17-FY20 on account of 39%
CAGR in EBITDA over the same period.
Given strong improvement in profitability we assign a target multiple of EV/t of
USD105 on expanded capacity of 8.2mt which is put up at an incremental capex
of ~INR12b. We hence arrive at a target price of INR171/share implying upside
of 35% from present levels.
Bear case
In the bear case, we assume volume growth for SIL to increase at CAGR of 2%
over FY17-FY20E due to weak demand in its focus markets as also coastal
markets of Mumbai and Cochin.
We assume realization improvement to increase at CAGR of 7% over FY17-FY20E
as utilization for the western region remains subdued due to weak demand and
incremental supply pressure.
This translates into margin being largely flattish to 19.1% in FY20 from 19.9% in
FY17 as realization improvement has been offset by cost push. EBITDA/t will
likely be flat between FY17-FY20 to INR695 as muted pricing improvement is
being offset by cost push.
This translates into earnings declining at CAGR of 3% over FY17-FY20.
As profitability of core markets will be sluggish and the profitability of new
capacity would be at risk, we assign a target multiple of EV/t of USD70 on
expanded capacity of 8.2mt which is put up at an incremental capex of ~INR12b.
We hence arrive at a target price of INR86/share implying downside of 32%
from present levels.
26 December 2017
26

Sanghi Industries
Exhibit 37: Scenario Analysis – Bull Case
FY17
Sales (INR m)
Sales growth (%)
EBITDA (INR m)
EBITDA Margin (%)
EBITDA growth (%)
PAT (INR m)
PAT Margin (%)
PAT growth (%)
EPS (INR)
Target Multiple (EV/t) USD
Target price (INR)
Upside/downside (%)
9,975
30.9
1,982
19.9
31.1
631
6.33
(15.68)
2.87
FY18
12,896
29.3
3,111
24.1
57.0
1,344
10.42
112.83
6.11
FY19
15,572
20.8
4,163
26.7
33.8
2,258
14.50
68.03
10.27
FY20
18,138
16.5
5,366
29.6
28.9
3,213
17.71
42.26
14.60
105
171
35%
Source: Company, MOSL
Sales (INR m)
Sales growth (%)
EBITDA (INR m)
EBITDA Margin (%)
EBITDA growth (%)
PAT (INR m)
PAT Margin (%)
PAT growth (%)
EPS (INR)
Target Multiple (EV/t) USD
Target price (INR)
Upside/downside (%)
Exhibit 38: Scenario Analysis – Bear Case
FY17
9,975
30.9
1,982
19.9
31.1
631
6.33
(15.68)
2.87
FY18
12,130
21.6
2,812
23.2
41.9
1,103
9.10
74.71
5.02
FY19
12,482
2.9
2,387
19.1
(15.1)
832
6.67
(24.59)
3.78
FY20
12,844
2.9
2,103
16.4
(11.9)
593
4.61
(28.76)
2.69
70
86
-32%
Source: Company, MOSL
26 December 2017
27

Sanghi Industries
Financials and Valuations
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
2013
10,552
8.3
2,011
19.1
1,454
557
149
120
0
528
69
13.0
0
459
459
-44.0
2013
2,200
6,200
8,399
7,514
-540
15,374
21,632
7,818
13,815
546
0
3,913
2,112
251
35
1,515
2,899
1,606
1,294
1,013
15,374
2014
10,483
-0.7
1,971
18.8
1,478
494
141
83
0
436
-60
-13.8
0
496
496
8.1
2014
2,200
6,695
8,895
6,507
-540
14,862
21,949
9,293
12,656
593
0
3,779
1,478
125
340
1,837
2,166
1,887
279
1,613
14,862
2015
9,323
-11.1
1,574
16.9
1,064
510
275
71
0
306
0
0.0
0
306
306
-38.3
2015
2,200
6,909
9,109
5,351
-585
13,875
22,873
10,492
12,380
563
0
4,071
1,671
145
55
2,199
3,140
2,756
385
931
13,875
9M-2016
7,622
-18.2
1,512
19.8
540
972
222
17
-604
164
4
2.4
0
160
749
144.8
9M-2016
2,200
7,812
10,012
5,863
-585
15,289
25,356
10,573
14,783
824
0
4,012
1,385
184
830
1,613
4,329
3,547
782
-317
15,290
2017
9,975
30.9
1,982
19.9
731
1,251
642
22
0
631
0
0.0
0
631
631
-15.7
2017
2,200
8,442
10,642
6,366
-585
16,423
25,820
11,301
14,519
1,671
0
3,881
1,866
239
163
1,613
3,648
3,065
584
233
16,423
2018E
12,679
27.1
3,027
23.9
756
2,270
704
29
0
1,595
319
20.0
0
1,276
1,276
102.0
2018E
2,200
9,718
11,917
6,366
-585
17,698
27,157
12,057
15,099
1,774
0
5,546
2,327
486
197
2,536
4,716
3,975
742
830
17,703
2019E
14,644
15.5
3,790
25.9
775
3,014
599
33
0
2,448
490
20.0
0
1,958
1,958
53.5
2019E
2,200
11,676
13,875
10,616
-585
23,906
27,157
12,833
14,324
7,440
0
6,811
2,825
802
255
2,929
4,664
3,807
857
2,147
23,911
(INR Million)
2020E
16,448
12.3
4,648
28.3
760
3,887
631
37
0
3,293
659
20.0
0
2,635
2,635
34.6
Balance Sheet
(INR Million)
2020E
2,200
14,310
16,510
15,616
-585
31,541
27,157
13,593
13,564
14,440
0
8,383
3,071
1,036
986
3,290
4,841
3,878
962
3,542
31,546
26 December 2017
28

Sanghi Industries
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
EV/tonne (US$)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2013
2.1
8.7
41.6
0.0
0.0
2014
2.3
9.0
43.6
0.0
0.0
2015
1.4
6.2
43.3
0.0
0.0
91.3
20.4
2.9
3.5
20.8
122
5.1
3.6
0.7
9
73
16
0.7
2013
2,011
108
-661
-8
4
1,454
-256
1,199
0
19
-236
0
-1,010
-194
-40
-1,243
-26
60
35
5.3
4.2
0.7
4
51
31
0.6
2014
1,971
74
70
-12
1
2,105
-442
1,663
0
315
-127
0
-1,390
-216
-67
-1,673
305
35
340
3.2
3.9
0.7
6
65
67
0.5
2015
1,574
60
357
-6
-16
1,969
-743
1,226
0
13
-730
0
-980
-274
-269
-1,523
-284
340
55
9M-2016
3.4
5.9
47.8
0.0
0.0
37.3
21.7
2.7
4.3
21.5
119.8
7.5
6.4
0.5
9
66
69
0.4
9M-2016
1,512
-683
-14
-1
-774
39
-464
-425
0
4
-460
0
1,876
-253
-427
1,196
775
55
830
2017
2.9
6.2
50.6
0.0
0.0
44.2
20.5
2.5
3.4
16.1
121.0
5.8
7.7
0.6
9
68
52
0.5
2017
1,982
0
-1,218
0
0
764
-1,311
-547
0
22
-1,289
0
504
-642
0
-139
-663
830
167
2018E
5.8
9.2
56.4
0.0
0.0
21.9
13.7
2.3
2.7
10.5
120.5
10.8
10.4
0.7
14
67
49
0.5
2018E
3,027
0
-563
-319
0
2,145
-1,440
705
0
29
-1,411
0
0
-704
0
-704
29
167
197
2019E
8.9
12.4
65.3
0.0
0.0
14.3
10.2
1.9
2.6
8.0
115.0
14.6
11.4
0.6
20
70
47
0.7
2019E
3,790
0
-1,260
-490
0
2,040
-5,666
-3,626
0
33
-5,633
0
4,250
-599
0
3,651
58
197
255
2020E
12.0
15.4
77.3
0.0
0.0
10.6
8.2
1.6
2.6
5.9
79.6
16.8
11.1
0.5
23
68
46
0.8
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
(INR Million)
2020E
4,648
0
-664
-659
0
3,325
-7,000
-3,675
0
37
-6,963
0
5,000
-631
0
4,369
731
255
986
26 December 2017
29

Sanghi Industries
NOTES
26 December 2017
30

REPORT GALLERY
RECENT INITIATING COVERAGE REPORTS
Rs
Rs

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Sanghi Industries
Disclosure of Interest Statement
Analyst ownership of the stock
Sanghi Industries
No
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32