HEIDELBERGCEMENT INDIA LTD - Quantamental Equity Research

Quantamental Equity Research on HEIDELBERGCEMENT INDIA LTD | Release: 13 Feb 2019 11:39:35 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:HEIDELBERG and BSE CODE:500292
Last Close:  INR 146.45
Fair Value:  INR 145.7
Est. Price by Mar 19:  INR 240.5
Market Capitalization (INR Crs):  3318.75
Industry:  Cement & Cement Products
Rating:  STRONG BUY
Upside:  64%
Company Profile
Heidelberg Cement India is engaged in the manufacturing and selling of Cement and Cement related products. Brand Name: MyCem. Capacity 5.4 MTPA.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 10% -7% 12%  
EBIT % 39% 9% 404%  
Earnings % 75% 124% 332%  
Book Value %  8% 22% 26%  
Stock Total Return %  18% 106% 186%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 69.39  
(B) FII/FPI 11.77  
(C) DII/Insurance Companies 6.54  
(D) Public holding < 2 lakhs of cap. 7.47  
(E) Others 4.83  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 48 42 30 54 39 74 95 130 153 241 283 326 369 434  
Return on Equity 19% 8% 4% 4% -5% 7% 4% 8% 13% 19% 20% 20% 20% 21%  
Price to Earning  8.0 15.1 23.3 39.5 -21.6 28.4 60.6 38.7 26.1 24.2 24.2 24.2 24.2 24.2  
EVTI 1.1 1.1 1.5 2.6 1.8 1.4 1.9 2.1 2.2 2.7 2.7 2.8 2.7 2.9  
EVTIFM 8.0 15.1 23.3 39.5 -21.6 28.4 60.6 38.7 26.1 24.2 24.2 24.2 24.2 24.2  
Price to Book Value 1.5 1.2 0.9 1.5 1.1 2.0 2.4 3.1 3.3 4.6 4.8 4.9 4.9 5.1  
Debt to Equity  0.0 0.0 1.0 1.2 1.7 1.5 1.2 0.7 0.6 0.6 0.5 0.4 0.1 0.0  
Dividend Yield 0% 0% 0% 0% 0% 0% 0% 2% 2% 2% 2% 2% 2% 2%  
Cash Flow to Firm -1% 4% -52% -10% -8% 13% 13% 14% 8% 4% 5% 6% 9% 8%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales       1,865.59       2,208.08       2,539.71       2,836.32       3,072.86       3,226.50  
EBITDA          383.29          535.93          616.42          688.42          745.83          783.12  
EBIT          282.12          416.19          482.60          543.33          593.37          640.73  
PBT          207.67          341.74          401.52          463.30          524.10          616.15  
NPAT          133.18          225.58          265.04          305.83          345.96          406.72  
Price to Earning             26.10            24.16            24.16            24.16            24.16            24.16  
Price to Book Value              3.32              4.63              4.81              4.90              4.89              5.06  
Debt to Equity               0.59              0.57              0.50              0.38              0.12                 -    
Return on Equity              0.13              0.19              0.20              0.20              0.20              0.21  
Enterprise Value to Total Income (EVTI)              2.17              2.74              2.75              2.77              2.75              2.95  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            25.44            24.96            24.85            24.87            24.48            25.52  
Price or Est. Share Prices          153.40          240.50          282.60          326.10          368.90          433.70  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT          341.74          401.52          463.30          524.10          616.15  
Interest            74.45            81.08            80.03            69.27            24.58  
Depreciation          119.74          133.82          145.09          152.46          142.39  
Cash Flow Before Tax          535.93          616.42          688.42          745.83          783.12  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax          353.77          406.90          454.42          492.32          516.94  
Terminal Cash Flow                                                                                    -         4,927.72  
Total Cash Flow          353.77          406.90          454.42          492.32       5,444.65  
Present Value of Cash Flow       3,301.60  
Debt                 -    
Value of Equity       3,301.60  
Fair Value Per Share          145.70  
Equity            3,319
Debt               619
Beta Take from Reuters 2
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                 74
Tax Benefit                 27
Interest Net of Tax                 48
Debt               619
Cost of Debt 8%
Cost of Equity 22%
Debt Weight 16%
Equity Weight 84%
WACC 20%
Cash Flow of Mar-23 E          516.94
Growth 7.6%
Present Value of Terminal Cashflow       4,927.72
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  UltraTech Cem.        3,452.35          94,814          988.65              7.41            12.11              2.86            47.02              3.49            46.43              0.74              0.30              6.45              6.39          37,972            61.69               327            13.99            18.85              4.47          -13.73       1,223.64
   2  Ambuja Cem.           207.45          41,192          106.34              6.88            13.62              1.43            36.96              1.95            25.55                 -                1.74              3.64              2.93          24,402            63.11               201          -11.96            11.87          -45.26            10.40          139.39
   3  ACC        1,374.90          25,819          560.84            43.12            15.51              1.46              7.63              2.45            16.98                 -                1.89            20.32            20.03          15,714            54.53                 37            13.47            11.49          250.22          256.05       1,010.82
   4  Shree Cement      15,821.35          55,122       2,617.84            17.03            18.08              4.67            44.12              6.04            46.87              0.38              0.32            14.89            25.92          11,344            64.79               224              7.50            20.75          510.76            -9.61       4,171.76
   5  Heidelberg Cem.           146.45            3,319            47.63            24.20            16.84              1.89            16.20              3.07            17.93              0.59              1.71            13.90            12.94            1,968            69.39                 76          -10.06            14.08            -2.03            50.48            93.57
   6  Star Cement             86.40            3,622            37.01            28.25            21.01              2.42            11.84              2.33            11.32              0.29              1.16            24.67            25.62            1,670            68.78                 44            14.95            10.33          119.20            -8.43            79.29

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