Anjani Portland Cement (APCL) - CMP Rs.41.95
http://groups.google.co.in/group/heritage-india
Company Description:
Anjani Portland Cement (APCL) (formerly Shez Cement Ltd), the
Hyderabad based manufacturer of cement is originally promoted by
Syed Bhadruddin Shez and later taken over by K V Vishnu Raju the
grandson of Dr B V Raju (founder promoters of Raasi Group). Later in
1999 the name of the company was changed to the present one The
company markets its Cement under the name Anjani. The plant of 4
lakh tpa produces 53 grade, 43 grade and Portland Pozzolona cement
from high grade limestone, by following stringent quality measures at
every step in the process, to ensure consistency in quality.
Highlights:
The dry process technology adopted by the company has many
advantages, such as efficiency, better quality and reduced power
consumption which results in a low cost of production with a consistent
and sustained out put.
APCL has a mining lease spread over 300 acres of land located 6 kms
from the factory for mining of lime stone requirements.
APCL”s ready mix cement and sand in 50 KG bags in three different
proportions marketed under the brand name AnjaniMix is used for wall
plastering, floorings etc.
Its subsidiary, Vennar Ceramics (VCL) is engaged in the manufacture of
ceramics & power generation of 2.7 MW using gas as feedback. In 2007
it acquired 100 % stake in profit making Hitech Print Systems, Krishna
district of AP engaged in the business of providing high quality secure
printing solutions.
During the fourth quarter of FY07, APCL increased the capacity of the
cement plant to 4 lakh tonne per annum from 3 lakh tonne per annum.
The company is planning capacity expansion at its existing plant in
Andhra Pradesh to augment its capacity over the next 18 months, with
an investment of around Rs 170 crore.
The expansion project will add 0.8 million tpa to the existing capacity
of the company, which currently operates a 600 tpd rotary kiln plant at
Chintalapalem in Nalgonda district of Andhra Pradesh. The company
has already finalised the order for machinery.
Valuation & Recommendations:
The state of the art technology from Nihon of Japan, captive Limestone mines, a captive power generation unit and a
highly talented and committed workforce distinguishes APCL from the rest. The company is in the process of graduating
from the ‘Mini Plant’ status. It exemplifies a turnaround case of a non-operating unit into a healthy dividend paying
company within a short span of 7 years.
The initiatives taken under the National Highway Development Programme (NHDP) for promoting concrete highways and
roads, Pradhan Mantri Gram Sadak Yojana (PMGSY) for the construction of concrete roads in rural areas and Bharat Nirman
for promoting irrigation, water supply, roads, housing, electrification and telephone connectivity are likely to be the major
drivers of cement demand.
The massive housing creation, construction of public toilets, schools in rural areas apart from several private and public
infrastructure projects give tremendous boost to the cement consumption in the state. Most importantly, irrigation
projects, worth nearly Rs 1 lakh crore, will trigger unprecedented demand for the next 5-7 years.
The projects started by the government with the aim of building the national highways to include building of expressways,
double laning & six laning of existing highways, development of ports and port connectivity is already boosting the demand
of cement in the country.
Globalization of the Indian economy has thrown- up new challenges and opportunities for the Indian cement industry.
Globally, India has retained its 2nd position in cement production, though per capita consumption has reached 115 Kgs as
against the world average of 250 Kgs.
The capacity utilisation in the industry during the fiscal 2006-2007 has touched 94 % and cement despatches have crossed
an all time high of 155 million tonnes . The continued emphasis on infrastructure development by the Government and the
private sector coupled with a good growth in GDP will continue to create a demand for cement in the foreseeable future.
The consolidation indicates that the Indian cement industry has truly arrived in MNC’s business radar and they are ready to
accord handsome valuations to have a pie of the growth story. More acquisitions are likely to happen, which would give
better valuations to the cement companies.
At CMP of Rs 41.95, the shares are traded at P/Ex of 3.6 on FY08E and 2.6 on FY09. Medium-to-long term target of Rs 60.
http://groups.google.co.in/group/heritage-india
http://groups.google.co.in/group/heritage-india
Company Description:
Anjani Portland Cement (APCL) (formerly Shez Cement Ltd), the
Hyderabad based manufacturer of cement is originally promoted by
Syed Bhadruddin Shez and later taken over by K V Vishnu Raju the
grandson of Dr B V Raju (founder promoters of Raasi Group). Later in
1999 the name of the company was changed to the present one The
company markets its Cement under the name Anjani. The plant of 4
lakh tpa produces 53 grade, 43 grade and Portland Pozzolona cement
from high grade limestone, by following stringent quality measures at
every step in the process, to ensure consistency in quality.
Highlights:
The dry process technology adopted by the company has many
advantages, such as efficiency, better quality and reduced power
consumption which results in a low cost of production with a consistent
and sustained out put.
APCL has a mining lease spread over 300 acres of land located 6 kms
from the factory for mining of lime stone requirements.
APCL”s ready mix cement and sand in 50 KG bags in three different
proportions marketed under the brand name AnjaniMix is used for wall
plastering, floorings etc.
Its subsidiary, Vennar Ceramics (VCL) is engaged in the manufacture of
ceramics & power generation of 2.7 MW using gas as feedback. In 2007
it acquired 100 % stake in profit making Hitech Print Systems, Krishna
district of AP engaged in the business of providing high quality secure
printing solutions.
During the fourth quarter of FY07, APCL increased the capacity of the
cement plant to 4 lakh tonne per annum from 3 lakh tonne per annum.
The company is planning capacity expansion at its existing plant in
Andhra Pradesh to augment its capacity over the next 18 months, with
an investment of around Rs 170 crore.
The expansion project will add 0.8 million tpa to the existing capacity
of the company, which currently operates a 600 tpd rotary kiln plant at
Chintalapalem in Nalgonda district of Andhra Pradesh. The company
has already finalised the order for machinery.
Valuation & Recommendations:
The state of the art technology from Nihon of Japan, captive Limestone mines, a captive power generation unit and a
highly talented and committed workforce distinguishes APCL from the rest. The company is in the process of graduating
from the ‘Mini Plant’ status. It exemplifies a turnaround case of a non-operating unit into a healthy dividend paying
company within a short span of 7 years.
The initiatives taken under the National Highway Development Programme (NHDP) for promoting concrete highways and
roads, Pradhan Mantri Gram Sadak Yojana (PMGSY) for the construction of concrete roads in rural areas and Bharat Nirman
for promoting irrigation, water supply, roads, housing, electrification and telephone connectivity are likely to be the major
drivers of cement demand.
The massive housing creation, construction of public toilets, schools in rural areas apart from several private and public
infrastructure projects give tremendous boost to the cement consumption in the state. Most importantly, irrigation
projects, worth nearly Rs 1 lakh crore, will trigger unprecedented demand for the next 5-7 years.
The projects started by the government with the aim of building the national highways to include building of expressways,
double laning & six laning of existing highways, development of ports and port connectivity is already boosting the demand
of cement in the country.
Globalization of the Indian economy has thrown- up new challenges and opportunities for the Indian cement industry.
Globally, India has retained its 2nd position in cement production, though per capita consumption has reached 115 Kgs as
against the world average of 250 Kgs.
The capacity utilisation in the industry during the fiscal 2006-2007 has touched 94 % and cement despatches have crossed
an all time high of 155 million tonnes . The continued emphasis on infrastructure development by the Government and the
private sector coupled with a good growth in GDP will continue to create a demand for cement in the foreseeable future.
The consolidation indicates that the Indian cement industry has truly arrived in MNC’s business radar and they are ready to
accord handsome valuations to have a pie of the growth story. More acquisitions are likely to happen, which would give
better valuations to the cement companies.
At CMP of Rs 41.95, the shares are traded at P/Ex of 3.6 on FY08E and 2.6 on FY09. Medium-to-long term target of Rs 60.
http://groups.google.co.in/group/heritage-india
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