NCL INDUSTRIES LTD.
 
  

 

SHARETIPSINFO >>Research Reports >> NCL INDUSTRIES LIMITED (23-05-2009)

 

LISTING
CMP
Rs 39
52 WEEK HIGH/LOW
Rs 46/Rs20
FACE VALUE
Rs 10
PE RATIO
4
AVERAGE VOLUME
54900
DIV

25%

DIV YIELD

6.6%

COMPANY OVERVIEW:
The Company was established on 10th September 1979. It was promoted by K.Ramachandra Raju and his associates and APIDC. The main objective of the company is to manufacture cement and ceramics. Company name was changed to Nagarjuna Cement ltd (NCL) in the year 1987.

Product Mix:


PRODUCT NAME

SALES VALUE(in crore)

PRODUCT MIX

CEMENT

Rs178.06

64.75%

CEMENT BOARD

Rs36.88

13.41%

CLINKER

Rs25.16

9.15%

PREFAB

Rs21.12

7.67%

POWER

Rs12.5

4.54%

TRADING

Rs1.26

0.45%

Dividend Track Record of 5 years:


YEAR

DIVIDEND%

2004

25%

2005

22%

2006

15%

2007

10%

2008

7.5%

AVERAGE DIVIDEND

15.9%

INVESTMENT RATIONAL:
Operating profit margin has doubled due to increase in operating efficiency.
Net profit margin too improved 2.5% to 14%.
Good interest cover means company can service its debt obligation.
EPS has grown at CAGR of 40%.
The demand for low cost housing material is here to stay. This segment is not affected by the recession. As the recession has mostly leveraged person or industry.
Huge investment from govt for rural housing will increase the demand for company’s product.

SHAREHOLDING PATTERN:

 

 

NO.OF SHARES

% OF TOTAL

PROMOTER

14631430

 

43.27%

 

INSTITUTION

15090

 

0.04%

 

GENERAL PUBLIC

19173163

 

56.69%

 

GRAND TOTAL

33819683

 

100%

 

FINANCIAL:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

TOTAL INCOME

92.32

127.52

192.23

194.23

EXPENDITURE

-79.19

-110.48

-147.86

-124.63

OPERATING PROFIT

13.13

17.04

44.37

69.6

DEPRECIATION

-4.52

-4.66

-6.6

-10.95

PBIT

 

8.61

12.38

37.77

58.65

INTEREST

 

-3.57

-5.23

-9.14

-16.18

PBT

 

5.04

7.15

28.63

42.47

TAX

 

-2.66

-2.91

-2.26

-13.36

PAT

 

2.38

4.24

26.37

29.11

CHANGE IN TOTAL INCOME: CAGR IN TOTAL INCOME IS 28.1%.

CHANGE IN OPERATING INCOME: CAGR IN OPERATING INCOME IS 74.6%.

CHANGE IN NET PROFIT: CAGR IN NET PROFIT IS 130.43%.

RATIOS:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

EPS

 

0.704142

1.254438

7.801775

8.612426

OPM

 

14.22227

13.36261

23.08173

35.83381

NPM

 

2.57799

3.324969

13.71794

14.98739

INTEREST COVER

2.411765

2.367113

4.132385

3.624845

Key Highlights:
EPS zoomed from just Rs0.7 in FY2005 to Rs8.6 in FY2008.
OPM improved from 14.2%in FY2005 to 35.8%in FY2008.
NPM improved from 2.4%in FY2005 to 14% in FY2008.
Interest Cover improved from 2.4 times to 3.32 times.

COMPARISION OF Q3FY2009 WITH Q3FY2008:

 

 

31/12/07

% CHANGE

31/12/08

TOTAL INCOME

50.79

62.55%

 

82.56

EXPENDITURE

-29.29

 

 

-59.69

OPERATING INCOME

21.5

6.40%

 

22.87

DEPRECIATION

-2.9

 

 

-3.38

PBIT

 

18.6

 

 

19.49

INTEREST

 

-4.9

 

 

-4.89

PBT

 

13.7

 

 

14.6

TAX

 

-7.54

 

 

-5.92

PAT

 

6.16

41%

 

8.68

Key Highlights:
Total Income zoomed by 62.55%.
Operating income increased by just 6.24% due to lower OPM (operating profit margin) during the Q3FY2009.
Net Profit surged by 41%. This can be attributed to lower tax outgo and lower base.

VALUATION & OUTLOOK:
At cmp of Rs38.5 the stock is trading at 4x to trailing twelve months earning. We on very conservative basis value the company at 6X.So the fair value of the stock comes at Rs56. We maintain that low cost housing material which is the core business of the group will always be in demand. Company will maintain its earnings growth though not with pace of FY2008 but still company will grow at least at rate of 20%.
After recent surge in the stock price still stock remains undervalued. Company consistently pay dividend. At current market price the dividend yield stands at 6.6%. The good dividend yield limits some downside in the stock.


CONCLUSION:
We maintain buy on the counter. It would be prudent to buy on every dip this will increase investors margin of safety. Stock should be bought with time horizon of 8-10 months.

 

 

Find more Research Reports

 

Click here for Indian stock market tips

 

For more details click here

 

About Us |Site Map| Privacy Policy | Our Partners | Contact Us ||advertise with us |©2005sharetipinfo