Shiva Cement Ltd - Expanding It's Capacity

Symbol (BSE): 532323

Website: https://shivacement.com/

Shiva Cement Ltd was founded in 1986 and it commenced operations in 1986 in Orissa. It is engaged in the business of manufacture and sale of cement, clinker, and trading of allied products.

They are the makers of high strength “Mahabal” cement which consists of both Portland Slag Cement (PSC) and Portland Pozzolana Cement (PPC).

Management

Read the company’s Corporate Governance Report here.

Their Goals

Acquisition By JSW Cement

In 2017, JSW Cement; a part of JSW Group acquired 37% stake in the company from the promoters of Shiva Cement for 97 crores and another 32% stake through open offer at 14 Rs. per share for a total of 87 crores.

Current Capacity

Currently, Shiva Cement owns and operates only 1 cement plant in Sundargarh, Odisha with a cement production capacity of 1,32,000 MT and clinker production capacity of 1,15,500 MT.

Their Advantages

Capex

Owing to ample stock of captive Limestone at Khatkur Bahal Mines, they planned to increase production to 4000 TPD Clinker in 20 acres and expand their territory in the states of Odisha, West Bengal, Jharkhand & Bihar. Investment – 1500 crore and expanding to 1.3 MT. Expected to be commissioned in June 2022.

Financials

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
Sales 25.26 29.38 32.39 28.49 3.47
Sales Growth 15% 16% 10% -12% -88%
Raw Material Cost 7.38 7.2 9.67 8.35 9.83
Change in Inventory 1.28 -4.58 0.87 -0.15 7.16
Power and Fuel 12 11.99 16.73 15.96 3.2
Other Mfr. Exp 3.75 2.64 2.92 4.43
Employee Cost 3.81 3.99 4.22 4.06 2.77
Selling and admin 7.28 5.87 5.91 4.9 1.66
Other Expenses 0.62 0.03 0.72 0.04 17.64
Other Income -9.86 0.35 -1.32 2.7 5.8
Depreciation 7.94 7.63 7.87 7.82 7.06
Interest 13.79 14.85 14.54 14.96 8.79
Profit before tax -39.89 -29.05 -30.64 -29.48 -34.52
Tax Rate 22% 27% 25% 25% 26%
Tax -8.8 -7.8 -7.81 -7.51 -9
Net profit -31.09 -21.26 -22.82 -21.97 -25.52
EPS -1.59 -1.09 -1.17 -1.13 -1.31

Reason For Extremely Low Revenue & Profit:
The new plant is being set up at the same location as the old one, thus currently no significant operations are taking place, so it is not making a Profit and has extremely low Sales.

Competitive Advantage

Distribution Network

Risks

Disclaimer
I have a small tracking position.

4 Likes

Hi valorem what’s ur thoughts on the below mentioned news or any other valuepicker tracking this company.

Disc: Invested. this is Not a buy or sell recommendation

1 Like

Some updates on Shiva Cement’s expansion from their Annual Report:
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Hi valorem
I had also gone through the Latest annual report.
My Doubt is even though company has been embarking on huge capex there
Property, plant and equipment actually decreases to 98 cr from 117 cr
Secondly CWIP is still 460 cr which means plenty of capex still left to be executed.
Thirdly Under Other current Assets there is Indirect tax balances/recoverable/credit which becomes 78 cr from 7 cr. can’t understand what it means

Please share your view on the same.
Disc: Invested. this is Not a buy or sell recommendation

2 Likes

Anybody attended the AGM then please share the notes on the same