Hyderabad based NCL Industries is a diversified company engaged
in Cement, Boards, Prefab and Hydel Energy business. Company had
expanded its cement capacity previous and now reaping benefits of
same. Company has reported excellent nos for Q4 and likely to report
NCL Industries (BSE Code : 502168) (Rs. 36.00)
good nos for FY12.
Hence, the commendation.
Cement : Earlier
NCL had installed capacity
of 6.27 lac
tonnes. Previous year,
it was expanded to
19.47 lac tonnes. Thus,
NCL is nearly 2 million tonne cement capacity company. Additional
capacities created in 2008 and 2009 had put pressure on margins. However,
since Q3 of FY11 margins of cement have improved significantly
and continue to remain robust
Boards : Spread over 2 locations, NCL has been producing Cement
Bonded Particle Boards used for Partition, False ceiling, Door, Wall Cladding,
Flooring, Table Tops etc. This division is profitable but capacity
utilization of this division is low as company faces competition from other/
different Boards of competitors.
Hydel Energy : NCL has two small hydel-power projects with a totalin Cement, Boards, Prefab and Hydel Energy business. Company had
expanded its cement capacity previous and now reaping benefits of
same. Company has reported excellent nos for Q4 and likely to report
NCL Industries (BSE Code : 502168) (Rs. 36.00)
good nos for FY12.
Hence, the commendation.
Cement : Earlier
NCL had installed capacity
of 6.27 lac
tonnes. Previous year,
it was expanded to
19.47 lac tonnes. Thus,
NCL is nearly 2 million tonne cement capacity company. Additional
capacities created in 2008 and 2009 had put pressure on margins. However,
since Q3 of FY11 margins of cement have improved significantly
and continue to remain robust
Boards : Spread over 2 locations, NCL has been producing Cement
Bonded Particle Boards used for Partition, False ceiling, Door, Wall Cladding,
Flooring, Table Tops etc. This division is profitable but capacity
utilization of this division is low as company faces competition from other/
different Boards of competitors.
capacity of 15.75 MW. This division reports decent profit margins
Prefab : NCL is pioneer in manufacture and supply of prefab shelters
widely accepted by both public and private sector undertakings. Prefab hous-ing is light weight structures in various models for
security cabin, Store Sheds, Row houses and temporary
housing (at construction sites). However,
performance of this division is not improving and
has become lacklustre due to unorganised sector
offering lower rates leading to a situation where
DGS&D rates have become unviablefor the company.
For FY11, NCL Ind has achieved Eps of Rs
6.70 which 98% rise over FY10. However, NCL had incurred loss in H1 of
FY11. Profit after tax in H2 of FY11 stands at Rs 33 crores which means Eps
for H2 was more than Rs 9. Segment Revenue for FY11: Cement Division :
470.88 Cr, Boards : 61.45 Cr, Prefab : 17.75 Cr, Energy : 11.41 Cr, Book
Value of NCL Ind on 31st March 2011 is Rs 44/ CMP is cum-dividend Rs
1.50 which provided tax free 4% dividend yield Finally scrip is trading at just
2.10xFY12E Eps. Share price has been lying so low due to bad market
sentiment. If market sentiments become stable and genuine investors can
have patience of 3-6 months, NCL Industries can provide out-performer
returns. Scrip can be Rs 55-60/ in 6-9 months Buying Recommended
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