Shree Digvijay is a case of Good management trying to turn around things.
Couple of things which an analyst can do. Try converting all PL line items into per ton basis.
1.So take Net Sales and divide by per ton produced
2. Divide RM Cost by per ton produced
3. Divide Power Cost by per ton produced
4. Divide Other Expenses by per ton produced
Plot all these numbers over 5-6 qtrs and see where is the profit coming from.
- Is a particular line item contributing to profit
- Are volumes als contributing.
In my view , in Shree Digvijay most of the profits are coming from Sales Price increase. Is it sustainable (after Corona)
Also where will next leg of growth come from. Co is operating at 98-99% capacity.
So they are sitting on peak sales price, peak capacity utlisation.
As far as limestone is concerned, if we do google searches, we can clearly observe that their limestone mines havent been approved since 15 odd years, The one which they might win is also very small and hardly will suffice 2 years.
Now good things are
- Very capable management
- Cost levers can be managed and next set of profit growth will come from there.
Disclosure : Not a registered investment advisor