Shree Cement
BSE SENSEX
26,763
S&P CNX
8,204
10 June 2016
Update
| Sector:
Cement
CMP: INR13,492
TP: INR15,000 (+11%)
Unique “Growth-RoIC” proposition
Rich valuations? Partly explained, partly fathomable
Buy
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)/ (USD b)
Avg Val ( INR m)
Free float (%)
Financials Snapshot (INR b)
Y/E MARCH
2016
SRCM IN
34.8
14178 / 9350
1/19/23
467.8/7.0
197
35.2
1. Sustainable low cost growth together with B/S strength:
SRCM has
demonstrated prowess of calibrated and low cost expansion over previous
decade, leading to (a) coexistence of balance sheet strength and (b) optimum
capacity utilizations, even during the capex intensive phase. The company is
entering next growth phase over FY17-20 with addition of 14m tons (50%
expansion) comprising 6m tons in East and 4m tons each in North & South.
Ahead of the curve investment in critical resources like land and limestone
should enable SRCM sustaining efficient and low cost growth mechanism.
2. Preparedness for scalability and sustainability:
Advantage of low cost
expansion should continue to pay off as its planned expansion over FY17-20
would be at INR4,000-4,500/ton versus the industry normal of INR8,000/ton.
It requires INR60b-65b of capex versus OCF generation of INR140b+ over
FY17-20, keeping financial strength intact for self-sustaining long-term
growth. With rising cost of garnering critical resource (limestone auction),
SRCM’s leadership in opex and capex aids insurmountable edge.
3. Cost leader; a pioneer in many aspects:
Cost advantage in (a) Raw material
(efficient sourcing and economies of scale), (b) Energy (pioneering effort in
pet coke, WHRS, best-in-class operating efficiencies), and (c) Freight (strategic
spilt grinding, smart bidding process, etc) renders industry leading
profitability. Ind-AS accounting would mark-up SRCM’s EBITDA, which is
understated currently, as it used to capture government subsidies of INR120-
150/ton in capital reserve unlike peers that factor this in the P&L statement.
4. “Earn at home before spending in new market”:
SRCM’s low-risk
diversification philosophy has been the genesis of its success in new market.
Early investments in the right support system (brand, split grinding unit,
critical resources, cost structure) helped replicating the efficiency and
sustainability of the home market in new markets. Interestingly, SRCM enjoys
lower direct cost in the East than the North (home market).
5. Coexistence of high growth and RoIC is inimitable:
Over medium-term, the
Cement industry, in our views, would see a trade-off between growth and
capital efficiency due to sharp rise in cost of expansion. Previous peak RoIC
would be tough to replicate (Refer
our note….).
SRCM’s ability to (a) invest at
lesser capex, and (b) sell faster and profitably (edge on price competitiveness
due to lowest opex) would help keep its RoIC inimitable (60-70% in FY18).
Rich valuations? Partly explained, partly fathomable:
SRCM’s premium
valuation is partly explained by industry leading growth and RoIC. Rest is
attributable to its strong preparedness for low cost growth which should
significantly reduce its implied asset valuation (EV/ton) at the end of ongoing
expansion phase (by FY19-20). SoTP-based 3-year TP implies 18-20% return
CAGR. For 50%+ RoIC of SRCM (~4x of cost of capital), we are comfortable
assigning EV/ton of USD225/260 for FY18/20E (1.8-2x replacement cost).
2018E
2017E
Sales
EBITDA
NP
Adj EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
EV/EBITDA (x)
EV/Ton (USD)
72.9
16.7
5.9
168.0
26.1
1,774
10.2
10.6
27.0
253.9
82.5
21.0
10.2
293.9
75.0
2,027
15.5
15.0
20.7
228.5
102.1
31.7
17.5
503.8
71.4
2,485
22.3
21.5
13.1
203.7
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-16 Dec-15 Mar-15
75.0
3.0
16.7
5.3
75.0
3.3
16.1
5.6
75.0
1.0
18.9
5.1
FII Includes depository receipts
Stock Performance (1-year)
Shree Cement
Sensex - Rebased
15,400
13,800
12,200
10,600
9,000
Sandipan Pal
(Sandipan.Pal@MotilalOswal.com); +91 22 3982 5436
Aashumi Mehta
(Aashumi.Mehta@MotilalOswal.com); +91 22 3010 2397
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.

Shree Cement
1. Sustenance of low cost expansion
Unique track-record of co-existence of growth and B/S strength
SRCM has demonstrated prowess of calibrated and low cost expansion over
previous decade, leading to (a) coexistence of balance sheet strength and (b)
optimum capacity utilizations, even during the capex intensive phase.
SRCM is adding its next 14m tons (50%+ increase over current capacity of 25m
tons) over FY17-20 – 2m tons in Bihar (FY17) and 4m tons each in North, South
and East thereafter.
Ahead of the curve investment in critical resources like land and limestone
should enable SRCM sustaining efficient and low cost growth mechanism.
Exhibit 1: Poised for next round of expansion over FY16-20, with 1.5x scale-up
Calibrated expansion of 2-
3m tons annually and
commensurate increase in
utilizations have been
SRCM’s pioneering growth
strategy
110
88
94
Capacity (mt)
94
85
78
Utilization (%) RHS
14% CAGR
82
90
92
81
69
7
9
12
13
14
14
18
24
10-12% CAGR
80
87
88
90
33% CAGR
3
4
6
74
26
27
29
33
37
Source: MOSL, Company
Exhibit 2: Comparative gross block (INR/ton)
Cost of capacity addition
lowest among peers even
before adjusting for CPP
and land
Gross Block/ton
ACC
ACEM
UTCEM
SRCM
RAMCO
JKLC
FY07
2,658
3,176
3,225
3,573
3,301
4,168
FY09
3,206
4,071
3,689
3,039
4,558
3,915
FY11
3,143
3,884
3,777
3,615
4,525
4,973
FY13
3,414
3,830
4,836
4,400
4,543
6,357
FY15
4,195
4,179
5,461
3,905
5,167
5,177
FY16E
4,454
4,191
5,539
3,863
5,027
4,943
FY18E
4,450
4,475
6,520
4,004
5,058
4,900
Source: MOSL, Company
Exhibit 3: Kiln commissioning time is half of industry average Exhibit 4: Systematic capex hardly impacted the B/S; Gearing
of 2-2.5years and has consistently improved
level, rather, improved along with capex
456
435
456
435
3
4
5
0.9
367
330
0.4
0.3 0.2
0.1
-1.0 -0.9 -1.0-0.9
-1.2
3
1.7 1.6
Net debt (INR b)
2
1
3
-13 -14 -13 -12 -19 -34
-53
DER (x)
-79
-110
-1.6 -1.7 -1.8
-2.0
Kiln 3
Kiln 4
Kiln 5
Kiln 6
Kiln 7
Kiln 8
Source: MOSL, Company
Source: MOSL, Company
10 June 2016
2

Shree Cement
2. Well placed for scalability and sustainability
Preparedness | Lowest capex & opex cost | Financial bandwidth
Ahead-of-time land acquisition, which enables SRCM to sustain its advantage of
low cost capacity addition, should continue to pay off. Its planned expansion
over FY17-20 would be at INR4,000-4,500/ton versus the industry normal of
INR8,000/ton.
Expansion would involve INR60b-65b of capex versus OCF generation of
INR140b+ over FY17-20, keeping financial strength intact for self-sustaining
long-term growth.
With the rising cost of critical resource (limestone auction), SRCM’s leadership in
opex and capex along with balance sheet strength give it an insurmountable
edge on peers.
SRCM’s strategy of
acquiring land well in
advance would pay off in
future –
adding 14m tons at INR60-
65b (INR4,000/ton)
Exhibit 5: Investment in land over past five years
Land aquired in past 5 years (INR b)
17.6
12.6
7.5
2.2
UTCEM
SRCM
ACC
ACEM
Source: MOSL, Company
7.9
5.6
17.4
Land as % of gross block
20.8
Exhibit 6: Financial bandwidth strong enough to support next leg of growth (INR b)
60
OCF
Capex
FCF
32
Headroom in place for
further 15m ton addition in
FY16-20 (over and above
the envisaged plan of 14m
tons) w/o debt addition
45
30
15
0
-15
-1
3
3
2
1
17
2
-1
-2
13
21
28
7
Source: Company, MOSL
Exhibit 7: 35-40% of SRCM’s capital employed is in cash, and
will rise further even amidst capex cycle
69
53
28
2
2
49 51
53
43
43
33
40
50
62
Exhibit 8: Cost of acquiring limestone in auction route makes
scalability costlier - advantage SRCM
Particular
Reserve price for IBM* (INR/ton)
Floor price for bidding (%)
Winning bid by SRCM
Cost of limestone mining (INR/ton)
Limestone royalty (INR/ton)
DMF @ 30% and NMET @2%
Total cost of limestone (INR/ton)
Additional cost from existing (INR/ton)
RM cost (INR/ton) for
OPC (Cement: Limestone = 0.8: 1)
PPC (Cement: Limestone = 1: 1)
PSC (Cement: Limestone = 1.2: 1)
Average cost/ton in MOSL universe
Percentage increase in cost for PPC (%)
Average FY16 EBITDA/ton in MOSL universe
Percentage increase in cost for PPC (%)
483
24%
59%
285
80
26
390
285
356
285
237
3,579
8
657
36
Source: MOSL, Company
Source: MOSL, Company
10 June 2016
3

Shree Cement
3. Cost leader; a pioneer in many aspects
Ind-AS to upgrade profitability
Advantage on raw material cost:
(a) Huge clinker deposits at a single location,
(b) long-term fly ash contract but buying slag at spot, (c) optimal clinker-cement
conversion ratio and captive synthetic gypsum.
Advantage on energy:
SRCM was the first to shift to pet coke in FY02. It has the
first movers’ advantage in terms of relationships with pet coke suppliers like
Reliance and IOCL, and has entered into long-term supply arrangements. It is a
pioneer in waste heat recovery (WHRS), and has better fuel and power
consumption efficiency.
Exhibit 9: SRCM’s positioning in unitary cost within MOSL cement universe (INR/ton)
SRCM emerged as lowest
cost producer with edge on
energy, freight and
economies of scale in single
location plant
Cost range of universe
4,500
4,000
3,500
3,000
2,500
2,000
1,500
SRCM
Source: MOSL, Company
Exhibit 10: SRCM is the leader in energy efficiency, and is a pioneer in WHRS, pet coke use
ACC
Energy (KWh/t)
Power (INR/unit)
Pet coke (%)
CPP (%)
WHRS (%)
84.0
4.8
17
77
2.3
ACEM
80.4
4.4
35
67
1.5
UTCEM
80
4.6
60
83
5
SCRM
73.8
2.3
100
98
16
Source: MOSL, Company
Exhibit 11: SRCM is the leader in direct (raw material, energy) and freight cost
Advertisement expenses
are high due to multi-brand
strategy, better credit terms
to dealers
As % Revenue
UTCEM
ACC
ACEM
SRCM
JKLC
JKCE
RAMCO
Direct cost
37%
39%
31%
27%
46%
39%
38%
Indirect (freight)
22%
21%
24%
20%
31%
25%
20%
Indirect (ads, marketing)
5%
2%
2%
5%
4%
3%
2%
Source: MOSL, Company
10 June 2016
4

Shree Cement
In the North, SRCM has six
split grinding units against
two integrated units that
keep all target markets
within 200-250km; SRCM is
replicating the same
structure in the East with
four split grinding units
Advantage on freight
Despite the high road transportation mix (80%), SRCM has the advantage of
split grinding units in close proximity to large markets in North India (target
markets are <200km from one of its capacities).
Online freight bidding (reverse auction from transporters to ensure lowest
rates) and reduction in truck turnaround time through GPS.
Split grinding reduces cost through clinker transport. 60% of SRCM’s cement
is dispatched from grinding units.
Exhibit 13: Cost leadership aids consistently superior
profitability (EBITDA/ton, INR)
ACC
1,300
1,200
1,100
1,000
900
800
700
600
500
400
FY11
Source: MOSL, Company
FY12
FY13
FY14
FY15 FY16E FY17E FY18E
Source: MOSL, Company
ACEM
UTCEM
SRCM
Exhibit 12: Strong reach, penetration and prompt dispatches
in operating markets key factors giving logistics advantage
Interestingly, SRCM
captures government
subsidies of INR120-
200/ton in capital reserve,
unlike peers that factor this
in the P&L
Exhibit 14: SRCM’s EBITDA/ton is understated, which will normalize with Ind-AS
INR b
Opening net worth
Add: PAT
Less: Dividend
Add: Subsidy
Closing net worth
Subsidy (INR/ton)
Adjusted EBITDA/ton
FY12
19.9
5.6
-0.8
2.7
27.3
218
1,295
FY13
27.3
10.0
-0.8
1.9
38.4
150
1,184
FY14
38.4
7.9
-0.9
1.7
47.1
119
1,040
FY15
47.1
4.3
-1.0
2.4
52.8
146
890
Source: MOSL, Company
Exhibit 15: Blending ratio (%) improved with East entry, as slag cement mix going up
1.5
1.4
1.2
1.1
0.9
Source: MOSL, Company
10 June 2016
5

Shree Cement
4. Earn at home market…
…before spending in new market
SRCM’s growing market diversification less risky and justified, given that
It gained leadership in home market (both in terms of share and cost), first.
Its balance sheet is strong enough to drive calibrated expansion.
It worked on support system before market entry (split grinding, cost structure).
Exhibit 16: SRCM is pursuing Pan India leap, with 8-10m tons
of expansion in East and South…
North
19
Exhibit 17: …but market diversification is coming only after
gaining significant market share and cost advantage at home
FY02
FY08
FY16
East
South
11
23
23
Market share in various states (%)
26
17
9
8
6
18
12
5
4
100
81
66
FY12
FY16
FY20
Source: MOSL, Company
Source: MOSL, Company
Brand and dealer network
In place; has spent heavily on marketing and branding compared to peers.
Started selling through Bihar grinding a year before clinkerization unit set up.
Energy cost lower in East, to offset disadvantage of economies of scale
SRCM enjoys lower direct cost in the East due to further savings in energy cost.
This is because (1) 50% power requirement in the East is met from WHRS v/s
15% in the North, and (2) high moisture content in eastern limestone increases
WHRS productivity (5-6MW/ton v/s typical 3.5-4MW/ton).
Further benefits are expected from split grinding units in Bihar (1.6m tons),
Orissa (2m tons) and West Bengal (2m tons).
Preparedness high for similar economies of scale
SRCM intends to recreate its economies of scale of the North in the East.
Existing limestone should take capacity from 4.6m tons to 10m tons by FY20.
Recent win of limestone auction would add a further 5m tons.
21m tons of North capacity at 80% utilization would aid pre-tax OCF of INR20b,
enough for creating scale in new markets.
Low cost structure to help score over competition
Surge in capex in the East would increase competition. SRCM has gained 5%
market share in the East within a year on the back of cost advantage.
SRCM’s total cost in the East is INR2,700-2800/ton, similar to blended cost of
INR2,740/ton.
10 June 2016
6

Shree Cement
5. Coexistence of growth and RoIC
Invest more at less + sell more + control costs = High RoIC
SRCM is poised for next
round of expansion over
FY16-20 with 1.5x scale-up
at ~INR4,000/ton
Exhibit 18: “Invest more at less”: Calibrated expansion at lower capex
Capacity growth (%)
ACEM
UTCEM
SRCM
Capex as % of OCF
ACEM
UTCEM
SRCM
GB ('000/ton)
ACEM
UTCEM
SRCM
FY12
10%
0%
2%
37%
91%
21%
3.7
4.2
3.9
FY13
2%
4%
0%
33%
91%
79%
3.8
4.8
4.4
FY14
3%
6%
30%
60%
67%
105%
4.0
5.0
4.3
FY15
3%
14%
34%
35%
136%
115%
4.2
5.5
3.9
FY16
0%
7%
9%
15%
64%
55%
4.2
5.5
3.9
FY17E
3%
0%
6%
29%
41%
41%
4.3
5.8
4.0
FY18E
0%
0%
7%
22%
32%
30%
4.5
6.5
4.0
Source: MOSL, Company
Exhibit 19: Invested capital (INR/ton) of key cement players over the years
SRCM offers the cheapest
invested capital (ex-cash) in
the pack, rendering
strongest comfort on RoIC
FY07
ACC
ACEM
UTCEM
SRCM
RAMCO
JKLC
1,636
1,981
1,959
1,836
2,384
3,033
FY09
1,760
2,744
2,433
1,532
4,096
2,604
FY11
1,491
2,261
2,263
1,687
3,846
3,013
FY13
1,550
1,962
3,361
1,707
3,748
4,385
FY15
2,248
2,054
3,803
1,673
3,977
3,529
FY16
2,406
1,966
3,640
1,423
3,703
3,422
FY18E
2,155
2,244
4,962
1,071
3,444
3,088
Source: MOSL, Company
Exhibit 20: Capital employed (INR/ton) of key cement players over the years
FY07
ACC
ACEM
UTCEM
SRCM
RAMCO
JKLC
2,200
2,909
2,296
2,556
2,626
3,648
FY09
2,477
3,374
2,953
2,995
4,224
3,467
FY11
2,398
3,170
3,049
2,971
4,092
4,300
FY13
2,604
3,361
4,382
3,613
3,968
5,118
FY15
2,860
3,619
4,676
2,511
4,265
4,049
FY16
2,918
3,681
4,741
2,388
4,065
3,664
FY18E
3,006
3,977
6,235
2,843
4,149
3,541
Source: MOSL, Company
Lowest cost of opex &
capex, and fast expansion
to drive industry leading
volume growth and asset
turn
Exhibit 21: Sell more: Commensurate ramp-up in utilization and superior growth
Volume growth (%)
ACEM
UTCEM
SRCM
Utilization (%)
ACEM
UTCEM
SRCM
Asset turn (x)
ACEM
UTCEM
SRCM
FY12
5%
18%
19%
78%
84%
90%
1.5
1.2
1.8
FY13
3%
0%
2%
79%
80%
92%
1.8
1.2
1.6
FY14
-2%
2%
14%
75%
77%
81%
1.5
1.1
2.0
FY15
3%
8%
13%
75%
73%
69%
1.6
1.0
2.4
FY16
-2%
7%
15%
74%
73%
73%
1.6
1.0
3.3
FY17E
8%
8%
16%
77%
79%
80%
1.8
1.0
4.0
FY18E
7%
10%
16%
82%
87%
86%
2.1
1.2
4.1
Source: MOSL, Company
10 June 2016
7

Shree Cement
Exhibit 22: Combined Net debt/ EBITDA (x) across regions
Most regional players have
hurt B/S strength
meaningfully; not many
players other than SRCM
can withstand pricing
disruption
Source: MOSL, Company
SRCM offers sustainability
to its cost leadership in
energy, freight and
economies of scale of single
location plant in East
market as well
Exhibit 23: Control cost: Superior profitability and resilience to competition
Cost (INR/ton)
ACEM
UTCEM
SRCM
Margin (%)
ACEM
UTCEM
SRCM
EBITDA (INR/ton)
ACEM
UTCEM
SRCM
FY12
3,061
2,861
2,468
23
22
29
904
874
1,041
FY13
3,278
3,122
2,594
26
22
28
1,122
981
1,034
FY14
3,490
3,259
2,751
17
18
23
717
742
921
FY15
3,635
3,474
2,803
19
17
21
840
752
744
FY16
3,646
3,337
2,733
15
18
22
660
781
751
FY17E
3,520
3,318
2,704
16
21
25
780
934
905
FY18E
3,570
3,384
2,716
20
25
31
1,071
1,239
1,212
Source: MOSL, Company
Capex-led value accretion:
SRCM will be adding 14m tons at INR4,000-4,500/ton –
40-45% discount to the cost at which UTCEM is adding JPA asset. This is due to its
high preparedness with past investment in land, limestone and infrastructure,
keeping incremental capex for expansion limited.
Exhibit 24: Typical capacity set-up cost
Greenfield Capex
8000/t
Plant and M/C
5500/t
Clinker unit
3,800/t
Land and Infra
2500/t
Grinding Unit
1,700/t
If Split Grinding
2000/t
Source: MOSL, Company
10 June 2016
8

Shree Cement
Exhibit 25: Inimitable capital efficiency
RoIC (%)
ACEM
UTCEM
SRCM
RoE (%)
ACEM
UTCEM
SRCM (normalized)
RoCE (%)
ACEM
UTCEM
SRCM
23
23
20
27
21
28
16
14
19
19
14
9
12
13
10
16
16
19
24
22
29
16
20
41
18
19
33
11
13
22
13
11
19
8
11
20
11
13
26
17
18
30
FY12
21
19
42
FY13
26
18
61
FY14
15
12
32
FY15
19
10
15
FY16
11
9
15
FY17E
17
12
35
FY18E
33
19
73
Cash and liquid investment
is 35-40% of SRCM’s capital
employed – highlighting
strongest and inimitable
RoIC in the space
Source: MOSL, Company
10 June 2016
9

Shree Cement
Rich valuations?
Partly explained, partly fathomable
SRCM’s premium valuation is partly explained partly by industry leading growth
and RoIC. Rest is attributable to its strong preparedness for low cost growth.
The stock looks expensive, but implied valuation gap (EV/ton) disappears
significantly when evaluated on entire expanded capacity, at the end of ongoing
expansion phase (by FY19-20).
SoTP-based 3-year TP implies 18-20% return CAGR. For 50%+ RoIC of SRCM (~4x
of cost of capital), we are comfortable assigning EV/ton of USD225/260 for
FY18/20E (1.8-2x replacement cost).
Exhibit 26: EV/ton (USD) at CMP: Rich asset valuation to normalize over capex
SRCM’s low cost expansion
ability deciphers its rich
asset valuations
140
132
FY17E
FY18E
FY20E
190
117
166
221
143
196
134
Asset valuation normalizes
once entire capacity
potential is visible over next
3-4 years
ACEM
UTCEM
SRCM
Source: MOSL, Company
Exhibit 27: Comparative EV/EBITDA (x)
FY17E
FY18E
FY20E
19.8
15.1
9.8
6.3
15.2
10.5
6.2
12.6
6.2
ACEM
UTCEM
SRCM
Source: MOSL, Company
For 50%+ RoIC of SRCM (~4x
of cost of capital), we are
comfortable assigning
EV/ton of USD225/260 for
FY18/20E (1.8-2x
replacement cost).
Exhibit 28: SRCM SoTP: We expect 18-20% return CAGR over next 3 years
INR m
Cement EBITDA (INR m)
EV/EBITDA (x)
Cement EV (INR m)
Cement capcity (mt)
EV/ton (USD)
Merchant Power DCF @12% (INR m)
Total EV (INR m)
Less: Net Debt (INR m)
Equity Value (INR m)
Fair Value (INR/share)
FY18
30,233
15
453,488
29
225
8,325
461,814
-63,378
525,192
15,076
FY20
54,313
12
651,762
37
260
6,273
658,035
-114,062
772,097
22,163
Source: MOSL, Company
10 June 2016
10

Shree Cement
Financials and Valuations
Income Statement
Y/E June
Net Sales
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depriciation
EBIT
Int. and Finance Charges
Other Income - Rec.
PBT before EO Expense
EO Expense/(Income)
PBT after EO Expense
Tax
Tax Rate (%)
Reported PAT
Adj PAT for EO items
Change (%)
Margin (%)
Normal PAT *
2012
47,806
38.4
33,941
71.0
13,865
29.0
7,133
6,732
1,878
1,471
6,325
41
6,284
649
10.3
5,635
5,671
119.7
11.9
9,558
2013
55,671
16.5
40,293
72.4
15,378
27.6
4,356
11,022
1,931
2,114
11,205
11
11,194
1,155
10.3
10,040
10,049
77.2
18.1
11,017
2014
58,759
5.5
44,975
76.5
13,784
23.5
5,499
8,285
1,292
1,964
8,957
-154
9,111
1,238
13.6
7,872
7,739
-23.0
13.2
9,392
2015
64,399
9.6
51,097
79.3
13,302
20.7
9,248
4,054
1,206
1,515
4,363
355
4,008
-255
-6.4
4,263
4,640
-40.0
7.2
9,610
2016
72,872
13.2
56,181
77.1
16,691
22.9
11,467
5,224
1,015
1,673
5,882
263
5,619
29
0.5
5,590
5,852
26.1
8.0
11,864
2017E
82,500
13.2
61,464
74.5
21,036
25.5
11,552
9,484
706
2,000
10,778
0
10,778
539
5.0
10,239
10,239
75.0
12.4
15,726
(INR Million)
2018E
102,078
23.7
70,393
69.0
31,685
31.0
12,242
19,443
541
2,500
21,402
0
21,402
3,852
18.0
17,550
17,550
71.4
17.2
22,569
Balance Sheet
Y/E June
Equity Share Capital
Other Reserves
Total Reserves
Net Worth
Deferred Liabilities
Secured Loan
Unsecured Laon
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
E: MOSL Estimates;
(INR Million)
2012
348
26,991
26,991
27,339
-697
16,079
532
16,611
43,253
50,564
35,886
14,678
1,500
25,352
17,499
5,033
1,811
4,590
6,065
15,776
13,822
1,954
1,723
43,253
2013
348
38,088
38,088
38,436
-938
11,274
0
11,274
48,773
56,895
40,242
16,653
2,500
22,033
19,478
5,305
3,147
3,694
7,333
11,891
10,841
1,050
7,587
48,773
2014
348
46,760
46,760
47,109
-1429
10,783
0
10,783
56,463
66,764
45,741
21,023
8,500
22,444
19,892
8,098
2,966
1,593
7,236
15,396
14,209
1,186
4,496
56,463
2015
348
52,416
52,416
52,764
-1952
8,200
0
8,200
59,012
85,764
54,989
29,154
6,000
16,626
26,246
9,189
4,764
3,075
9,219
19,015
18,135
880
7,231
59,012
2016
348
61,454
61,454
61,802
-2634
7,167
0
7,167
66,335
95,014
64,073
29,647
3,500
23,682
28,428
8,152
3,286
2,810
14,179
18,921
18,709
213
9,506
66,335
2017E
348
70,276
70,276
70,625
-3712
5,667
0
5,667
72,580
97,514
75,625
21,889
10,000
23,682
40,825
9,719
4,973
15,962
10,171
23,816
22,603
1,213
17,009
72,580
2018E
348
86,207
86,207
86,555
-4354
4,167
0
4,167
86,368
106,514
87,866
18,647
10,000
23,682
61,830
10,627
5,593
33,863
11,746
27,791
26,568
1,223
34,039
86,368
10 June 2016
11

Shree Cement
Financials and Valuations
Ratios
Y/E June
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
EV (US$)
EV/ton (USD-Cap)
Dividend Yield (%)
Return Ratios (%)
RoIC
RoE
RoCE
Normalized RoE
Working Capital Ratios
Inventory (Days)
Debtor (Days)
Creditor (Days)
Working Capital Turnover (Days)
Leverage Ratio (x)
Current Ratio
Debt/Equity
2012
162.8
479.1
784.8
20.0
14.5
2013
288.5
441.3
1,103.3
20.0
8.1
2014
222.2
427.5
1,352.3
22.0
11.4
2015
133.2
541.3
1,514.6
24.0
22.8
101.3
24.9
8.9
7.4
34.5
6,535
278
0.2
41.5
24.0
17.5
40.5
38
14
106
13
1.1
0.6
61.1
30.6
25.2
33.5
35
21
71
50
1.6
0.3
32.2
18.1
16.5
22.0
50
18
88
28
1.3
0.2
15.1
9.3
10.0
19.2
52
27
103
41
1.4
0.2
2016
168.0
669.7
1,774.0
24.0
17.4
80.3
20.1
7.6
6.5
27.0
6,475
254
0.2
14.9
10.2
10.6
20.7
41
16
94
48
1.5
0.1
2017E
293.9
783.0
2,027.3
35.0
13.8
45.9
17.2
6.7
5.6
20.7
6,191
228
0.3
30.4
15.5
15.0
23.8
43
22
100
75
1.7
0.1
2018E
503.8
999.2
2,484.6
40.0
9.2
26.8
13.5
5.4
4.3
13.1
5,926
204
0.3
76.4
22.3
21.5
28.7
38
20
95
122
2.2
0.0
Cash Flow Statement
Oper. P/L before Tax
Interest/Dividends Recd.
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(inc)/dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from investments
Issue of Shares
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2012
13,865
1,471
-564
6,173
20,945
-4,350
16,594
-13,387
-17,738
2,617
-3,468
-1,878
-815
-3,544
-337
4,987
4,590
2013
15,368
2,114
-2,198
-5,957
9,326
-7,331
1,995
3,319
-4,012
1,867
-5,337
-1,931
-810
-6,211
-896
4,590
3,693
2014
13,938
1,964
-1,729
990
15,162
-15,869
-707
-411
-16,280
1,697
-491
-1,292
-897
-983
-2,101
3,694
1,592
2015
12,947
1,515
-268
-1,253
12,942
-14,879
-1,938
5,818
-9,062
2,364
-2,583
-1,206
-972
-2,398
1,482
1,593
3,075
2016
12,732
1,229
-678
-2,360
10,923
-7,076
3,846
-7,056
-14,132
5,460
-1,033
-751
-972
2,705
-505
3,075
2,810
2017E
21,036
2,000
-1,617
5,649
27,068
-10,294
16,774
0
-10,294
0
-1,500
-706
-1,417
-3,623
13,152
2,810
15,962
(INR Million)
2018E
31,685
2,500
-4,494
871
30,561
-9,000
21,561
0
-9,000
0
-1,500
-541
-1,619
-3,660
17,901
15,962
33,863
E: MOSL Estimates; ^ Y/E March; * Adj for accelerated depreciation & EO items
10 June 2016
12

SHREE CEMENT GALLERY
SHREE CEMENT
SHREE CEMENT
SECTOR UPDATES

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