View Full Version : Mangalam Cement Ltd (NSE:MANGLMCEM) (BSE:502157)

08-19-2015, 05:58 AM
Mangalam Cement Ltd is an India-based manufacturer of cement. The Company’s products include Portland Pozzolana Cement, 43 Grade Cement and 53 Grade Cement. Portland Pozzolana Cement is a special blended cement, produced by inter-grinding higher strength Ordinary Portland Cement clinker with processed fly ash. 43 Grade Cement is an Ordinary Portland Cement which is used in all constructions including plain and reinforced cement concrete, brick and stone masonry, floors and plastering. It is also used in the finishing of all types of buildings, bridges, culverts, roads, water retaining structures, etc. 53 Grade Cement is an Ordinary Portland Cement produced from clinker ground with gypsum. It provides strength and durability to structures because of its optimum particle size distribution, superior crystalline structure and balanced phase composition.

Official Website: www.mangalamcement.com

08-19-2015, 05:59 AM
For 1QFY2016, Mangalam Cement (MCL) reported a disappointing set of numbers on the profitability front; its top-line declined by 7.3% yoy to Rs213.4cr, marginally below our estimate of Rs217.8cr. Volume growth, at 11.9% yoy to 0.6mt, was above our estimate of 0.56mt. However MCL reported an operating loss of Rs2.1cr as against our estimated profit of Rs7.8cr. It was mainly due to a higher than expected fall in realization and higher operating expenses. Consequently, the net loss widened to Rs18.8cr and was higher than our estimated loss of Rs7.3cr. The same is mainly due to higher depreciation and interest expenses on account of new capacity addition. EBITDA margin declined by 1,730bp yoy: MCL reported an EBITDA loss of Rs2.1cr for the quarter as against our estimate of a profit of Rs7.8cr. Hence the EBITDA margin came in at negative 1%, a decline of 1,730bp yoy. The sharp fall in the company’s EBITDA margin is due to steep cut in sales realization. The realization/tonne fell by 17.1% yoy to Rs3,500 and the same is lower than our estimate. Operating expenses increased by 11.8% yoy to Rs215.5cr on account of increase in employee and other expenses. Realization has improved in the month of August but is still lower than in 2QFY2015; thus we expect margin to remain under pressure during 2QFY2016. We expect healthy improvement in realization in 2HFY2016 as cement demand improves in line of our anticipation of an increase in infrastructure spending and thereby would lead to improvement in profits. Outlook and Valuation: Going ahead, we expect sales volume to remain strong and grow at 18.3% CAGR during FY2015-17. Realization is expected to grow at a CAGR of 3.7% during FY2015-17. This would lead to top-line CAGR of 20.8% during FY2015-17. However we remain conservative on the margins front as low cement realization in its key region along with higher operating costs would put pressure on margins in near term. We have a Neutral rating on the stock.

Source: http://www.angelbroking.com/