Managalam Cement Ltd -Durable and Dependable

Managalam Cement is producing cement in 43 and 53 grades and Portland Pozzolana Cement (PPC)
using the dry process and marketing them under the brand names of Birla Uttam and Mangalam.
Manufacturing units of the company namely Neer Shree Cement and
Managalam Cement are both located at Morak in the Kota district of
Rajasthan.
Managalam Cement Ltd is one of the multibagger Shares,
identified by Dynamic Research based on technical and
fundamental research.
Managalam Cement share price has touched a 52 week high
of Rs. 376 on 17 -Aug -2016 and a 52 week low of Rs.147.50 on
12 -Feb -2016, and is currently trading at Rs.360.

Share Holding
The promoters holding in Managalam Cement stood at 13.28%, while Institutions and Non-Institutions
held 14.97% and 71.75% respectively.
Some of the Non-Promoters holding securities more than 1% of total number of shares are

CAMDEN INDUSTRIES LIMITED:14.31%

FOREIGN INSTITUTIONAL INVESTORS:9.95%
ADITYA MARKETING AND MANUFACTURING LIMITED:3.63%
FOREIGN INDIVIDUALS OR NRI:2.54%
FINQUEST SECURITIES PVT. LTD. - CLIENT BENEFICIARY A/C:1.63%
FIDELITY ASIAN VALUES PLC:1.51%

Financial Analysis
Quarterly Results
For the quarter ended June 2016, the total income from operations Managalam Cement has reported a
growth of 5.51 % on Y-o-Y basis to Rs. 225.17 cr as against Rs. 213.42 cr during the same quarter last year.
A enhance in total income from operations suggest strong development in business.
The operating profit of Managalam Cement on standalone has shown a growth of 460% Y-o-Y to Rs. 39.05
cr as against loss (Rs. -10.76 cr) during the same quarter last year.
The net profit of Managalam Cement has registered a growth of 220% Y-o-Y to Rs.22.59 cr as against loss
of (Rs -18.84 cr) during the same quarter previous year. The increase in net profit is on back of increase in
sale and decrease in total expenditure.

The earnings per share of the company have grown by 224% Y-o-Y to Rs. 8.73 as against (Rs -7.06) during
the same quarter last year.

Annual Results
For the year ended March 31, 2016
Managalam Cement on standalone basis reported net sales of
Rs. 841.76 cr compared to Rs. 921.85 cr FY2015.
For the year ended March 31, 2016 Managalam Cement on standalone basis reported net loss of Rs. 20.47 cr compared to profit of Rs. 17.92 cr FY2015.

Ratio Analysis
Name

Ratio

Current Ratio

0.97

Quick Ratio

0.67

Dividend Yield%

0.13

Interest Coverage Ratio

1.17

Debt Equity Ratio

0.7

Return On Asset (%)

-1.78

Return On Equity (%)

-4.17

The above ratio suggests that the company is operating with a debt-equity ratio of 0.70. Mangalam
cement can easily meet up with the interest expenses pertaining to its debt obligations. The company has
generated negative returns with shareholders fund, but with improving demand in cement sector we
expect it to perform in the coming days.

OPERATING LOCATIONS

Corporate Office in Kolkata (West Bengal)

Regional offices at Kota, Jaipur and Delhi
Wind power at Jaisalmer district (Rajasthan)
Cement and coal-based power plant at Aditya Nagar, Kota district (Rajasthan)
Primarily caters to the markets of Rajasthan, Delhi NCR, Madhya Pradesh, Western Uttar
Pradesh and Haryana, among others.

CAPACITIES

Cement: 3.25 MTPA

Power: 35 MW
Wind energy: 13.65 MW

Investment Rationale

The Indian cement industry is the second largest in the world and forms a vital part of the Indian
economy.
To meet the rise in demand, cement companies are expected to add 56 MT capacity over the next
three years. The cement capacity in India may show a growth of 8% by next year end to 395 MT
from the current level of 366 MT. It may increase further to 421 MT by the end of 2017.
The programme launched by the Prime Minister of India aims at achieving measures of
cleanliness across the country. The programme entails an investment of nearly Rs. 2 lac crores
over the next five years to construct 12 crores toilets in India. This programme will draw in
cement demand as it is the basic construction ingredient.
The Government announced 100 smart cities to be built with the investment of Rs. 48,000 crores
over the period of the next five year. The initiative is bound to keep cement demands afloat
throughout the project implementation duration.
The Government of India announced facilities of affordable housing for the urban poor that
includes a total of 60 million housing units -- 20 million of which are in urban India and 40
million in rural India. These will be developed and provided at subsidized rates of borrowing
interest to the lower income group.
CARE has re-affirmed its CARE A1 + (A one Plus) rating assigned to the Companys short term
facilities. This is the highest rating for short term facilities and indicates a strong capacity for
timely payment of short term debt obligations and carries the lowest credit risk.

Investment Opinion
At CMP of Rs.360 the stock is trading at a P/E of 46, the market cap of the company is
972.05 crore. As per Dynamic Levels, we recommend a buy on Managalam Cement at CMP
with a price target of Rs.450 and stop Rs.320.

Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal
views of the research team. Users are advised to use the data for the purpose of information and rely on their own
judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

Disclosure
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Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/
Research Analyst/ his Relative:

Do not have any financial interest / any actual/beneficial ownership in the subject company.
Do not have any other material conflict of interest at the time of publication of the research report
Have not received any compensation from the subject company in the past twelve months
Have not managed or co-managed public offering of securities for the subject company.
Have not received any compensation for brokerage services or any products / services or any compensation or
other benefits from the subject company, nor engaged in market making activity for the subject company
Have not served as an officer, director or employee of the subject company

Article Written by
Ammar Ali Mirza