Few points I prepared on long weekend -
Total mcap - 1470 cr
total sales - 1403 cr
sales breakup is as follows -
1. cement is close to 847 cr (60%)
2. Sugar is 412 cr (30%)
3. Others (include heave engineering , power generation, hotel etc.) - 131 cr (10%)
PBIT is already shared in above screenshot (112 cr , 66 cr and -7 cr respectively)
Now by next year company will have -
1. cement capacity close to double from current 2.5 MTPA to 4.6 MTPA.
2. Vietnam sugar will be 11000 from current 7000 Tonnes of Canes per day (TCD)
3. Hotel should breakeven.
4. Engineering should see uptick.
The capex in cement it seems has been done purely on the basis of upcoming development in Amravati and around areas because south India is actually cement saturated.
I think even if company maintains a 50 to 60 % utilization going forward according to annual report -
" On a regional level, South, where KCP operates, has the lowest utilization rates at ~55% and continues to be a drag on pan-India utilization rates. With players curtailing capacity additions, the region’s operating rate, which is hovering around 55%, is expected to gradually reach 60-63% by 2020-21. "
We can see sales of cement to go around 1500 cr.(2.6 MTPA = 850 cr so 4.7 MTPA should be around 1500 cr conservatively).
Noe vietnam sugar -
Crushing Capacity (TPD)
Cane Crushed (Mts.)
Sugar produced (Mts.)
Recovery Rate (%)
Turnover (Rs Lacs)
Now when the crushing capacity goes to 11000 ,lets conservatively take the sales at 550 cr.
There are a lot of factors that can affect these numbers but a rough long term view looks like above.
So overall - sales should be around 2000 cr (any support from engineering , hotel and other business such fives cail kcp and all should be added advantage) by 2020 i think.
**price to book is close to 2 which is lowest among other cement peers even when the ROE and ROCE is decent enough if not the best among them.
**debt to equity is 0.7 which is fine i think.
**Dividend paid this year was 2 Rs.
**The management I think is very conservative - I could not find any negatives on web atleast.To me they are those slow and steady movers if not game changers or high growth , fanatics etc etc.
**They are sitting on huge land bank in Chennai which they will start putting to optimal use as we see some signs of that in AR.
Few points to be noted from AR -
Container Freight Station Project: The Company is in the process of obtaining necessary approvals for the project. The Company is also exploring the possibility of improving the logistics and connectivity for the container movement between the station and the ports.
READY MIX CONCRETE - During the year the Company undertook Ready Mix Concrete (RMC) business on experimental basis, by hiring the equipment temporarily, as the demand for the product is on the rise. Having gained the expertise, the company is ready to foray into this area by setting up own units, subject to availability of land nearer to the places of demand.
FIVES CAIL KCP - The Company’s sugar vertical performed better during the year under review as compared to the energy vertical. Due to delay in the operationalization of overseas orders, annual turnover has dipped substantially. During the latter half of the year, new orders were booked by the energy vertical which will be executable in the ensuing financial year. Scope for the energy vertical, with the incineration boiler using spent wash from molasses based distilleries as fuel,is expected to generate considerable revenue in the next few years.
Bricks:The Company also has a brick unit in its cement unit at Muktyala. Considering the demand traditional bricks, the unit has not made much progress. However, the unit is ready to meet the demand from upcoming capital of AP in Amaravati.
I invite others to share and let me know if there is any negative you see with this.
Also difficult to find but there was a conference call scheduled this year - I could not find the transcript of the same anywhere - seems company has not published it - so let me know if anyone have notes or find something about it.
I would also like to interact with someone who attended their AGM in recent past.
Disc - Invested
Not - numbers used above may vary a bit if not exact . (cement i later noticed is 2.6 mtpa and expansion will be till 4.3 mtpa )