Cement Companies

This has been a bad year for the cement companies post the world economic slowdown. Some companies are overvalued in spite of this. Ambuja and ACC are acceptable to an extent as a bounce back would be best  for the big three - Ultratech, Ambuja and ACC. Rain commodities, Dalmia enterprises and Andhra Cements seem overvalued.

Company Name	Mcap/Sales
Ambuja Cements	3.149865971
ACC	2.731699567
Rain Commoditie	3.375153825
Dalmia Enter	8.145511296
Andhra Cemen	2.569839308

The big three spend around 20% of the net sales on the raw materials. There are some companies which spend a lot on raw materials, which might mean the company pays more for the raw materials. The companies which might very less for the raw materials are India Cements, JK Cements, Mangalam Cements and Shree Digvijay.

Company Name	Raw mat/Sales
Birla Corp	28%
Prism Cement	49%
Rain Commoditie	55%
Dalmia Enter	27%
HeidelbergCemen	32%
OCL India	35%
KCP	28%
Andhra Cemen	38%
Burnpur Cement	55%
Barak Vally Cem	25%

Andhra cements debt seems to be huge and it can never repay its debt in the reasonable future. Madras, Rain Commodities and Panyam cements need to pay approximately 1 year sales to repay their debt, this may be difficult as well. Ultratech has the biggest debt among the big three, this is bringing the net profit down for the biggie. But Ultratech can manage this debt as this is not huge.

Company Name	Int/Sales	Int/NP	Debt/NP	Debt/Sales
Shree Cements	5%	84%	879%	53%
Madras Cements	5%	66%	1323%	107%
Rain Commoditie	6%	-10%	-184%	103%
Andhra Cemen	21%	-54%	-1867%	710%
Panyam Cements	6%	-205%	-3473%	94%
Saurastra Cemen	11%	-73%	-466%	68%
Barak Vally Cem	5%	821%	9772%	60%

Company Name	Last Price	52 wk	52 wk	Market Cap	Net Sales	Net Profit
		High	Low	(Rs. cr)	(Rs. cr)	(Rs. cr)
ACC	1111.6	1233	917	20891.41	7647.77	1120.01
Ambuja Cements	151.5	165.5	112	23219.3	7371.52	1263.61
Andhra Cemen	11.39	16.89	8.03	166.32	64.72	-24.6
Barak Vally Cem	12.55	26.75	11.35	27.81	95.12	0.58
Birla Corp	273	394.95	242.7	2102.25	2146.37	319.88
Burnpur Cement	6.55	10.05	5.41	28.17	27.38	0.49
Chetinad Cem	540	570	390	2062.75	1545.58	75.17
Dalmia Enter	135	235	87	1096.06	134.56	21.44
Guj Sidhee Cem	8.15	15.45	6.92	117.86	347.91	-3.03
HeidelbergCemen	31.1	54	25.05	704.77	868.16	63.3
India Cements	69.55	107.15	62.1	2136.43	3413.29	68.1
JK Cement	109.1	148.5	95.8	762.91	2361.35	64.05
JK LakshmiCemen	43.75	56.8	35.5	535.32	1317.26	59.13
KCP	26.3	30.85	22.4	339.06	316.17	41.35
Madras Cements	104.65	123	79.7	2490.35	2620.71	210.98
Mangalam Cement	93.55	134.9	76	249.72	491.57	38.24
OCL India	90	124.95	83.05	512.1	1472.08	114.47
Panyam Cements	50.4	104.9	33.95	80.73	141.29	-3.81
Prism Cement	40.45	59.85	35.75	2036.08	3364.27	95.79
Rain Commoditie	31.75	40.22	25	1124.5	333.17	-186.04
Saurastra Cemen	14	23.5	8.4	71.67	389.41	-57.06
Shree Cements	2074.95	2200	1504.75	7228.55	3498.89	209.7
Shree Digvijay	9	12.98	7.51	127.24	295.02	1
UltraTechCement	1160.1	1228	890	31793.81	13205.64	1404.23

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Company Name	Raw Materials*	% of Net	Interest	% of Net	Debt	% of
		Sales		Sales		Liability
ACC	1464.1	19.14	56.78	0.74	523.82	12.31
Ambuja Cements	1420.92	19.28	48.69	0.66	65.03	13.53
Andhra Cemen	24.27	37.5	13.31	20.57	459.4	61.25
Barak Vally Cem	24.07	25.3	4.76	5	56.68	35.44
Birla Corp	598.6	27.89	61.95	2.89	945.41	31.67
Burnpur Cement	14.95	54.6	1.16	4.24	15.42	18.39
Chetinad Cem	335.8	21.73	64.57	4.18	896.06	38.78
Dalmia Enter	36.72	27.29	0.09	0.07	0.32	0.06
Guj Sidhee Cem	41.49	11.93	2.55	0.73	7.5	6.87
HeidelbergCemen	280.05	32.26	4.21	0.48	0	14.16
India Cements	554.44	16.24	141.72	4.15	2456.07	30.87
JK Cement	423.36	17.93	114.5	4.85	1319.15	42.58
JK LakshmiCemen	303.11	23.01	59.91	4.55	996.99	40.16
KCP	88.7	28.05	13.94	4.41	350.06	45.82
Madras Cements	561.95	21.44	139.9	5.34	2791.17	48.93
Mangalam Cement	100.99	20.54	2.19	0.45	0	2.57
OCL India	510.99	34.71	62.45	4.24	852.27	47.66
Panyam Cements	27.22	19.26	7.82	5.53	132.33	50.21
Prism Cement	1651.58	49.09	105.73	3.14	1169.84	35.09
Rain Commoditie	183.16	54.98	19.09	5.73	342.42	42.8
Saurastra Cemen	71.52	18.37	41.8	10.73	265.87	56.26
Shree Cements	777.12	22.21	175.35	5.01	1844.29	42.6
Shree Digvijay	28.34	9.61	0.56	0.19	0	0.62
UltraTechCement	2686.75	20.35	277.11	2.1	4144.6	20.73

I would consider Ambuja, ACC, Ultratech, India Cements, JK Cements, Heidelberg cement, Mangalam Cement and Shree Digvijay. Stay with the bigger players as this is a very capital intensive business - Setting up a cement plant is not like buying a few computers for 50K rupees each and renting a office space.

https://docs.google.com/spreadsheet/ccc?key=0AkkfAImTou94dGpMaml0alh6UFIwX3d5X3JUV3gxTkE

Thanks to Britannica for the pic.