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Queryist: Arun Joseph, PuneA leader in the Indian cement industry, India Cements Ltd ICL operates through its facilities located at Sankar...

Queryist: Arun Joseph, Pune

A leader in the Indian cement industry, India Cements Ltd ICL operates through its facilities located at Sankaridurg and Sankarnagar Tamil Nadu and Chilamkur Andhra Pradesh. The company, which has a total cement manufacturing capacity of 2.6 million tpa, is also engaged in the shipping sector and owns five dry-bulk carriers. Prior to 1992, the company has a foundry division which was later converted into a subsidiary called ICL Foundries. Other subsidiaries of the company are ICL Financial Services, ICL International, etc.

The financial performance of the company has been fairly encouraging over the years and for the year that ended in March 1996, its sales and net profit stood at Rs 790.30 crore and Rs 80.90 crore respectively, which yielded an EPS of Rs 12.6. For the year that ended in March 1997, ICL8217;s sales stood at Rs 816.78 crore and net profit at Rs 80.65 crore. The EPS therefrom worked out to Rs 12.5. Recently, the company acquired a unit from CCI located in Yerraguntla, Andhra Pradesh. The company benefits from the fact that the new acquisition possesses its own limestone reserves. Its newly operational plant in Tamil Nadu enhances its total capacity to 3.9 million tpa and on the anvil is the installation of a 100 per cent captive power plant.

RATIONALE:

Although the scenario in the cement industry has been far from promising lately, ICL8217;s track record has remained consistent. Its recent expansion should also prove beneficial for its future prospects and the setting up of the proposed captive power plant would enhance the same. In view of these factors, ICL8217;s long term prospects appear satisfactory.the primary capital markets.

The sustained fall in the secondary market was reversed during the second half of December 1997. The CMIE Overall share price index recorded a 0.8 per cent increase during December as against nine per cent fall in the preceding month. Net FII investement turned negative during November 1997 and are reported to have been negative during the first half of December 1997 as well.