INDIA CEMENTS: BITING MORE THAN IT CAN CHEW
Article Abstract:
India Cements (IC) had bought Visaka Cements (VC) whose capacity is 9 lakh tonnes per annum. It acquired the Yerraguntla plant of the Cement Corporation of India (CCI) whose capacity is 4 lakh tonnes per annum. Its total capacity has increased to 7 million tonnes. IC's acquisitions will cost Rs500 crore, against the grassroot cost of Rs1,000 crore for a 2 million tonnes plant. It has slashed prices, causing a price war in southern India. It has 26 percent market share in Kerala and 19 percent share in Tamil Nadu. The cement industry is posting a growth of 8 percent in southern India. IC is increasing Raasi's capacity to 2.5 million tonnes at a cost of Rs.20 crore. Its Dalavoi unit, having a capacity of 0.9 million tonnes, started commercial production in June 1997. VC is likely to start operations by September 1998. The acquisitions would cost IC Rs678 crore and the cost of interest is likely to be Rs60 crore. The equity of IC is likely to increase by Rs23 crore. Its earning per share is likely to decline. --------------------------------------------------------- Financial performance of India Cements --------------------------------------------------------- Particulars Year ended September (Rs in crore) 1997 1996 --------------------------------------------------------- Income 474.78 416.57 --------------------------------------------------------- Operating profit 106.53 88.44 --------------------------------------------------------- Interest 32.54 22.82 --------------------------------------------------------- Depreciation 26.91 21.25 --------------------------------------------------------- Net profit 47.08 44.37 --------------------------------------------------------- Equity 64.34 64.34 --------------------------------------------------------- EPS (Rs) 14.63 13.78 --------------------------------------------------------- Its sales in the first half of 1997-98 were Rs471.47 crore. Its sales are projected at Rs900 crore with a net profit of Rs90 crore in 1997-98. Its scrip is trading at Rs70 now. (rk)
Comment:
Posts an increase in its net profit to Rs47.08 crore in the year ended 9/97 from Rs44.37 crore in year ended 9/96
Publication Name: Dalal Street Journal
Subject: Business, international
ISSN:
Year: 1998
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PLAYER POOL DRAINS OUT
Article Abstract:
Many small cement companies in India are either registering losses or a fall in their profits due to lesser consumption of the building commodity. The cement capacity is growing at an estimated 9 percent per annum and the demand is growing at 7 percent. The cement industry is hit by the general economic recession in India and the financial crisis in South-East Asia. There have been many mergers and takeovers of cement companies in the recent past. According to HSBC Investment Banking, around half the number of small cement companies will disappear by 2001 AD. The industry in India has 59 cement companies and 119 cement plants. The leading players are trying to increase their market share in their regions and the neighbouring ones. GACL, which has its plants mainly in Gujarat, has acquired Modi Cements and renamed it as Ambuja Cement Eastern Ltd. It has acquired a 5 percent stake in Priyadarshini Cements, thereby entering southern India. India Cements, which has a strong market presence in southern India, especially Tamil Nadu, has taken over Raasi Cements, getting a foothold in Andhra Pradesh. The industry is also witnessing consolidation. Associated Cement Companies, having a production capacity of over 10 million tonnes, has decided to focus on its core competency and exit from unrelated diversification. It sold its stake in Floatglass and ACC- Bridgestone and used the funds for expanding and modernising its plants. The AV Birla Group, which has a capacity of 9.7 million tonnes of cement, is also restructuring its business. (tsm)
Publication Name: Dalal Street Journal
Subject: Business, international
ISSN:
Year: 1999
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NOVA PUMECH
Article Abstract:
Nova Pumech (NP) produces cement. It had posted a loss of Rs0.55 crore on sales of Rs0.97 crore in 1995-96. It has an equity of Rs3.74 crore. It closed down its operations in 1996-97. It had earned Rs0.15 lakh as the other income and made a loss of Rs0.06 crore in 1996-97. It re-started operations in 1997-98. NP posted sales of Rs0.25 crore and a profit of Rs0.09 crore in 1997-98. Its scrip is being traded at Rs1.70. (rk)
Comment:
Posts sales of Rs0.25 crore and a profit of Rs0.09 crore in 1997-98
Publication Name: Dalal Street Journal
Subject: Business, international
ISSN:
Year: 1998
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