shree cement - update-120509

7/28/2019 Shree Cement - Update-120509

1/7

Buy

Target Price: Rs1,004

CMP: Rs811*Upside: 23.7%*as on 11 May 2009

Conservative Accounting; Scope for Upside

Stock valued on conservative parameter: In ourinitiation report on the cement sector (Nadir? Not yet,dated 19 March 2009), we had conservatively valuedShree Cement at US$55/tonne vs. 1.5x FY10E P/BV forpeers as the companys BV and return ratios were notcomparable due to its conservative accounting policy.

Benchmarking valuations after appropriateadjustments: We have benchmarked valuations bymaking appropriate adjustments to arrive at comparableBook Value and return ratio for Shree Cement had thecompany continued with depreciation based on SLM. Wenow value the stock at 1.5X FY10E Adj BV. Accordingly weupgrade EV/ton target to $70/ton.

Assets expensed at high rate of depreciation: TheCompany has been providing depreciation based onWDV/income tax since FY05 as against SLM used by itspeer. This along with accelerated depreciation on Rs17bncapex resulted in depreciation provision of 9-30% ofgross block vs. 5.25% if it had adopted SLM.

Restated profit and BV significantly Higher: Higherdepreciation has made the company report lower profitand BV. As per our reworked financial statements, ShreeCements FY10E and FY11E EPS would be 53% and 82%higher than reported number respectively. Similarly,BV/share would be higher by 57% and 64%, respectively.

Stock still undervalued: Adjusting for difference indepreciation policy, the stock still looks undervalued. AtCMP, it trades at a PE of 5.3x FY10E and 6x FY11E,EV/EBIDTA of 3.9x and 3.7x and P/BV of 1.21x and 1.04xand asset value of US$57/tonne for FY10E andUS$45/tonne on its 10.1mt cement capacity on adjustednumbers. On reported numbers, the stock trades at a PEof 8.1x FY10E and 11x FY11E, EV/EBIDTA of 3 x and 2.7 x,P/BV of 1.91x and 1.71x and EV/ton of US$48 and US$34.

Maintain Buy with revised target price of Rs1, 004: Wemaintain Buy with a revised target price of Rs1, 004valuing the stock on P/BV of 1.5x FY10E adjusted BV ofRs669 and upgrading target EV/ton valuation to $70. Atour target price, the stock would be valued at PE of 6.5xFY10E and EV/EBIDTA of 4.7x FY10E.

Key Data

Bloomberg Code SRCM IN

Reuters Code SHCM.BOCurrent Shares O/S (mn) 34.8

Diluted Shares O/S(mn) 34.8

Mkt Cap (Rsbn/USDmn) 28.3/569.6

52 Wk H / L (Rs) 970/320

Daily Vol. (3M NSE Avg.) 16,019

Face Value (Rs) 10

1 USD = Rs49.2

Shareholding Pattern

Foreign, 14.3

Institutions, 10.1

Non Promoter Corp.

Hold., 4.6

Promoters, 65.4

Public & Others, 5.6

As on 31stMarch 2009

One Year Indexed Stock Performance

20

30

40

50

60

70

80

90

100

110

May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09

SHR EE CEMEN T N SE S& P C NX NI FTY IN DEX

Price Performance (%)

1M 6M 1Yr

Shree C. 12.5 88.3 (11.6)

NIFTY 6.4 24.8 (29.1)

Source: Bloomberg, Centrum Research

*as on 11 May 2009

Update 12 May 2009

Please refer to important disclosures/disclaimers inside

Cement

INDIA

Shree Cement

Rajan [email protected]

+91 22 4215 9640

Y/E Mar (Rsbn) Rev YoY (%) EBITDA EBITDA (%) Adj PAT YoY % Fully DEPS RoE (%) RoCE (%)

FY07 14.1 102.3 5.9 42.1 1.6 899 45.6 42.3 15.2

FY08 21.1 50.1 8.6 40.9 2.9 81.3 82.6 51.1 18.9

FY09A/E 27.2 28.7 9.5 35.0 5.5 92.2 159 58.8 29.1

FY10E 26.2 (3.3) 8.7 33.1 3.5 (36.6) 101 26.1 15.7

FY11E 27.2 3.5 8.3 30.5 2.6 (26.8) 73.7 16.4 11.3

Source: Company, Centrum Research


2/7

2 Shree Cement

Conservative accounting policy understates BV

In our initiating report on the cement sector (Nadir? Not Yet, dated 19 March 2009), we rated ShreeCement a Buy and a assigned it a target price of Rs823 based on EV/tonne of US$55 on its 10.1mtcement assets. We had valued other frontline cement companies at 1.5x FY10E P/BV, assigning theaverage one-year forward P/BV valuation as commanded by Ambuja Cements during FY03. Wehad valued Shree Cements on a conservative parameter of US$55/tonne as the companys BV andreturn ratios were not comparable with peers on account of the conservative accounting policy

adopted by the company since FY05.

In FY05, Shree Cement changed its accounting policy to charge depreciation on fixed assets (otherthan plant and machinery of Unit II) to WDV method at the rates specified in Schedule XIV of theCompanies Act 1956, or in the Income Tax Act, 1961, whichever is higher, while the depreciationon plant and machineries of unit II was changed to new policy during FY07.

Besides, the company has incurred a capex of Rs17.2bn towards expansions and additions ofcaptive power plants leading to near trebling of cement capacity to 10.1mt and 81 MW captivepower plants which has been expensed at an accelerated rate of depreciation. This lead to aprovisioning of higher depreciation of 9 to 30% of gross block vs. 5.25% in case it had adoptedSLM.

This led to reporting of lower profit till date and also led to significant understatement of BVwhich makes the stock look fairly valued on PE and P/BV multiples, even though the companywould be would be able to sustain its FY09 cash earnings during FY10E and FY11E.

Stock still undervalued

The stock touched Rs829 on 15 April 2009 and has given a return of 35% since our initiation vs. the29% return by Nifty and 14.2% by Centrum Cement Index. We believe the stock still remainsundervalued, which is not evident due to conservative accounting policy adopted by thecompany.

Exhibit 1: Shree Cement has Outperformed Nifty and our Cement Index since initiation

Shree Cement -Vs Nifty and Cement Space

-5

0

5

10

15

20

25

30

35

40

45

M

ar-09

M

ar-09

M

ar-09

Apr-09

Apr-09

Apr-09

Apr-09

Apr-09

May-09

May-09

Return (%)

Shree Cement Nifty Centrum Cement Index

Source: Bloomberg, Centrum Research

Post Shree Cements good Q4FY09 results, we tried to get a fresh perspective on valuations bymaking appropriate adjustments in depreciation and arrive at comparative net profit, BV anddeferred tax liability. For this, we have assumed depreciation based on SLM since FY05 withapplicable rate being 5.25% of gross block (excluding revalued part on which we continued to usedepreciation based on residual life of the assets as reported by the company) instead ofaccelerated depreciation used by the company.


3/7

3 Shree Cement

FY10E and FY11E PAT restated upwards by 53% and 82%, respectively

Reworking the income statements based of SLM (since FY05) leads to upward revision in FY10Eearnings by 53% to Rs5.38bn and FY11E earnings by 82% to Rs4.69bn.Similarly, FY10E EPS worksout to Rs154.3 and FY11E EPS to Rs134.5. This implies that at CMP, the stock is trading at a PE of5.3x FY10E and 6.1x FY11E.

Exhibit 2: Income statementReported Income Statement Restated Income statement numbers based on SLM depreciation

(Rsmn) FY05 FY06 FY07 FY08 FY09 FY10E FY11E (Rsmn) FY05 FY06 FY07 FY08 FY09 FY10E FY11E

Net Sales 6,022 6,948 14,055 21,091 27,150 26,244 27,175 Net Sales 6,022 6,948 14,055 21,091 27,150 26,244 27,175

EBIDTA 1,694 2,180 5,922 8,624 9,508 8,691 8,302 EBIDTA 1,694 2,180 5,922 8,624 9,508 8,691 8,302

Depreciation 1,230 1,640 4,331 4,788 2,054 4,310 5,058 Depreciation 653 570 713 951 1,166 1,476 1,846

% of Gross Block 12.5 14.4 29.4 24.9 9.2 15.3 14 % of Gross Block 6.6 5.0 4.8 4.9 5.3 5.3 5.3

PBT 311 271 1,894 3,683 7,229 4,675 3,424 PBT 888 1,341 5,512 7,520 8,117 7,509 6,637

Tax 21 87 124 1,079 1,449 1,169 856 Tax 215 448 1,354 2,383 1,751 2,132 1,948

Current 24 29 852 1,227 1,369 1,169 856 Current 24 29 852 1,227 1,369 1,169 856

Deferred (4) 59 (727) (147) 81 - - Deferred 190 419 503 1,157 382 963 1,092

PAT 291 184 1,770 2,604 5,780 3,506 2,568 PAT 673 894 4,158 5,136 6,366 5,377 4,689

Source: Company, Centrum Research Estimates

FY10E and FY11E BV restated upwards by 53% and 64% respectively

Had the company followed SLM method for calculating depreciation, its BV would have been 57%higher in FY10E and 64% in FY11E at Rs23,317mn and Rs27,191mn, respectively, translating into aBV/share of Rs669 and Rs780. On the restated BV, the stock would trade at a P/BV of 1.22x FY10Eand 1.04x FY11E even though the company would maintain a ROE of 25.6% and 18.6% in FY10Eand FY11E, respectively.

Exhibit 3: Balance SheetReported Balance Sheet Statement Restated Balance Sheet Statement based on SLM depreciation

(Rsmn) FY05 FY06 FY07 FY08 FY09E FY10E FY11E (Rsmn) FY05 FY06 FY07 FY08 FY09E FY10E FY11E

Equity 348 348 348 348 348 348 348 Equity 348 348 348 348 348 348 348

Reserves and Surplus 2,547 2,615 4,197 6,380 11,752 14,443 16,196 Reserves and Surplus 2,985 3,763 7,734 12,449 18,407 22,969 26,843

Networth 2,895 2,963 4,546 6,728 12,100 14,792 16,545 Networth 3,333 4,111 8,082 12,797 18,755 23,317 27,191

Revaluation Reserves 634 547 492 - - - - Revaluation Reserves 634 547 492 - - - -

Debt 2,971 3,727 9,314 13,307 13,720 13,720 13,720 Debt 2,971 3,727 9,314 13,307 13,720 13,720 13,720

Deferred Tax Liabilities 631 690 (38) (185) (104) (104) (104) Deferred Tax Liabilities 856 1,275 1,778 2,935 3,317 4,280 5,372

Capital Employed 7,131 7,927 14,314 19,851 25,717 28,408 30,161 Capital Employed 7,795 9,661 19,666 29,039 35,792 41,317 46,283

Gross Block 9,875 12,932 16,573 21,873 22,560 33,660 36,660 Gross Block 9,875 12,932 16,573 21,873 22,560 33,660 36,660

Accumulated Dep. 5,043 6,632 11,092 14,273 16,327 20,637 25,696 Accumulated Dep. 4,402 4,972 5,684 4,950 6,116 7,592 9,438

Net block 4,832 6,300 5,482 7,600 6,233 13,023 10,964 Net block 5,473 7,960 10,889 16,923 16,444 26,068 27,222

CWIP 1,522 978 3,438 180 4,730 2,230 1,230 CWIP 1,522 978 3,438 180 4,730 2,230 1,230

Investment - - 500 5,910 9,650 9,650 9,650 Investment - - 500 5,910 9,650 9,650 9,650

Net Current Asset 648 459 1,361 1,487 384 870 1,217 Net Current Asset 648 459 1,361 1,487 384 870 1,217

Cash 130 191 3,533 4,674 4,720 2,635 7,100 Cash 130 191 3,533 4,674 4,720 2,635 7,100

Total Assets 7,131 7,927 14,314 19,850 25,717 28,408 30,161 Total Assets 7,773 9,587 19,721 29,174 35,928 41,453 46,419

Adjustments 23 73 (55) (135) (136) (136) (136)


Stock still leaves an upside of 23.7%, Maintain BuyGiven the companys aggressive track record of expansion and current drive to diversify itsearnings stream from sale of merchant power, we believe the stock should command a higherP/BV than the industry average. However, even valuing it at 1.5 x P/BV at Rs1, 004, the stockprovides a further upside of 23.7% from current levels.

We maintain our Buy rating with a target price of Rs1,004 valuing the stock 1.5x FY10 P/BV (Onadjusted BV based on SLM for depreciation @5.25%) and upgrade our target EV/ton valuation forthe stock to $70/ton. At our target price, the stock would be valued at PE of 6.5x and EV/EBIDTA of4.7x FY10E


4/7

4 Shree Cement

Exhibit 4: Return RatiosKey Ratio

Based on reported Numbers Restated numbers based on SLM depreciation

(Rsmn) FY05 FY06 FY07 FY08 FY09E FY10E FY11E (Rsmn) FY05 FY06 FY07 FY08 FY09E FY10E FY11E

EPS (Rs) 8.3 5.3 50.8 74.7 165.9 100.6 73.7 EPS (Rs) 19.3 25.7 119.4 147.4 182.7 154.3 134.5

CPS (Rs) 43.5 54.0 154.2 207.9 227.2 224.4 219.0 CPS (Rs) 43.5 54.0 154.2 207.9 227.2 224.4 219.0

BVPS (Rs) 101.3 100.7 144.6 193.1 347.3 424.6 475 BVPS (Rs) 95.7 118.0 232.0 367.3 538.4 669.3 780.3

ROCE (%) 6.4 3.3 15.2 18.9 29.1 15.7 11.3 ROCE (%) 13.1 10.9 27.9 23.6 22.2 15.8 12.3

ROE (%) 10.6 5.4 42.3 51.1 58.8 26.1 16.4 ROE (%) 22.6 23.4 65.8 51.7 38.8 25.6 18.6

PE (x) 98.9 177.8 17.8 9.8 5.1 8.1 11.0 PE (x) 42.3 32.5 7.0 5.2 4.6 5.3 6.0

EV/EBIDTA (x) 18.4 14.9 5.5 3.9 2.7 3.0 2.7 EV/EBIDTA (x) 18.9 15.2 6.0 3.9 3.3 3.9 3.7

P/BV (x) 8.0 8.1 5.6 4.2 2.3 1.9 1.72 P/BV (x) 8.0 6.9 3.5 2.2 1.5 1.2 1.0

EV/ton ($) 55.3 48.0 34 EV/ton ($) 62.2 56.9 45.1

Debt/Equity (x) 1.2 1.5 2.0 2.0 1.1 0.9 0.8 Debt/Equity (x) 1.1 1.2 1.4 1.3 0.9 0.8 0.7

Net Debt/Equity (x) 1.2 1.4 1.2 0.4 (0.1) 0.1 (0.2) Net Debt/Equity (x) 1.1 1.2 0.9 0.4 0.1 0.2 0.1



5/7

5 Shree Cement

FinancialsExhibit 5: Income Statement

Y/E Mar (Rsmn) FY07 FY08 FY09 FY10E FY11E

Revenues 14,055 21,091 27,150 26,244 27,175

Growth in revenues (%) 102.3 50.1 28.7 (3.3) 3.5

Power and Fuel 2,345 3,672 6,058 4,509 4,493

% of Sales 16.7 17.4 22.3 17.2 16.5

Freight 2,243 3,598 4,593 5,304 5,554

% of Sales 16.0 17.1 16.9 20.2 20.4

Other Expenses 1,343 1,850 2,524 2,580 2,702

% of Sales 9.6 8.8 9.3 9.8 9.9

EBITDA 5,922 8,624 9,508 8,691 8,302

EBITDA Margin 42 41 35 33 31

EBIDTA/Ton (Rs) 1,225 1,360 1,122 1,095 709

Depreciation 4,331 4,788 2,054 4,310 5,058

PBIT 1,592 3,837 7,454 4,381 3,244

nterst expenses 104 497 744 991 991

PBT from operations 1,488 3,339 6,709 3,390 2,252

Other non op. income 212 733 829 1,285 1,172

PBT before extra-ord. items 1,700 4,072 7,538 4,675 3,424

Extra-ord. income/ (exp) 195 (389) 309 - -

PBT 1,894 3,683 7,848 4,675 3,424

Provision for tax 124 1,079 1,449 1,169 856

Effective tax rate 6.6 29.3 18.5 25.0 25.0

PAT 1,770 2,604 6,398 3,506 2,568

Minority Interest - - - - -

PAT after minority int.

Adjusted PAT 1,588 2,879 5,532 3,506 2,568

Growth in PAT (%) 899.0 81.3 92.2 (36.6) (26.8)

PAT margin 11.3 13.6 20.4 13.4 9.5

Cash Profit 5,918 7,666 7,586 7,816 7,627

Growth in Cash Profit (%) 185.5 29.5 (1.0) 3.0 (2.4)

PAT margin 42.1 36.3 27.9 29.8 28.1

Note: * Provisional


Exhibit 6: Balance Sheet

Y/E Mar (Rsmn) FY07 FY08 FY09E FY10E FY11E

Share Capital 348 348 348 348 348

Reserves 4,197 6,380 11,752 14,443 16,196

Shareholders' fund 4,546 6,728 12,100 14,792 16,545

Minority Interest

Debt 9,314 13,307 13,720 13,720 13,720

Deferred Tax Liability (38) (185) (104) (104) (104)

Total Capital Employed 13,822 19,851 25,717 28,408 30,161

Gross Block 16,081 21,873 22,560 33,660 36,660

Accumulated dep. 11,092 14,273 16,327 20,637 25,696

Net Block 4,990 7,600 6,233 13,023 10,964

Capital WIP 3,438 180 4,730 2,230 1,230

Total Fixed Assets 8,427 7,779 10,963 15,253 12,194

nvestments 500 5,910 9,650 9,650 9,650

nventories 1,561 1,766 2,083 2,157 2,606

Debtors 263 494 595 1,079 1,117

Cash & bank balances 3,533 4,674 4,720 2,635 7,100

Loans and Advances 2,384 4,026 4,026 4,026 4,026

Total current assets 7,741 10,960 11,424 9,897 14,849

Current lia & provisions 2,846 4,799 6,320 6,392 6,532

Net current assets 4,895 6,161 5,104 3,505 8,317Misc. Expenditure - - - - -

Total Assets 13,822 19,850 25,717 28,408 30,161


Exhibit 7: Cash flow

Y/E Mar (Rsmn) FY07 FY08 FY09E FY10E FY11E

CF from operating

Profit before tax 1,894 3,683 7,229 4,675 3,424

Depreciation 4,331 4,788 2,054 4,310 5,058

Interest expenses/other (316) 334 (394) (294) (181)

OP profit before WC change 5,909 8,804 8,889 8,691 8,302

Working capital adjustment (380) (539) 1,103 (486) (347)

Gross cash from operations 5,529 8,265 9,992 8,205 7,955

Direct taxes paid (1,133) (1,235) (1,369) (1,169) (856)

Cash from operations 4,395 7,030 8,624 7,036 7,099

Extraordinary (Inc) 212 (389) 309 - -

Cash From Op Ex OI 4,608 6,641 8,933 7,036 7,099

CF from investing

Capex (5,974) (4,234) (5,237) (8,600) (2,000)

Investment (452) (4,768) (3,740) - -

Cash from investment (6,425) (9,002) (8,977) (8,600) (2,000)

CF from financing

Borrowings/ (Repayments) 5,586 3,993 413 - -

Interest paid 13 (476) 85 294 181

Dividend paid (437) - (407) (815) (815)

Cash from financing 5,162 3,517 90 (521) (634)

Net cash increase/ (dec) 3,345 1,157 46 (2,085) 4,465


Exhibit 8: Key Ratios

Y/E Mar FY07 FY08 FY09E FY10E FY11E

Margin Ratios (%)

EBITDA Margin 42.1 40.9 35.0 33.1 30.5

PBIT Margin 11.3 18.2 27.5 16.7 11.9

PBT Margin 12.1 19.3 27.8 17.8 12.6

PAT Margin 11.3 13.6 20.4 13.4 9.5

Growth Ratios (%)

Revenues 102.3 50.1 28.7 (3.3) 3.5

EBITDA 171.6 45.6 10.2 (8.6) (4.5)

Net Profit 899.0 81.3 92.2 (36.6) (26.8)

Cash Earning 185.5 34.8 9.3 (1.2) (2.4)

Return Ratios (%)

ROCE 15.2 18.9 29.1 15.7 11.3

ROIC 17.6 31.5 53.7 24.8 17.3

ROE 42.3 51.1 58.8 26.1 16.4

Turnover Ratios

Asset turnover ratio (x) 1.0 1.1 1.1 0.9 0.9

Working capital cycle (days) (34.0) (46.4) (45.9) (42.7) (37.7)

Avg collection period (days) 8.5 8.0 15.0 15.0 15.0

Avg payment period (days) 83.0 85.0 88.9 87.7 87.7

Inventory holding (days) 40.5 30.6 28.0 30.0 35.0

Per share (Rs)

Fully diluted EPS 45.6 82.6 158.9 100.7 73.7

CEPS 154.2 207.9 227.2 224.4 219.0

Book Value 144.6 193.1 347.3 424.6 474.8

Solvency ratios

Debt/ Equity 2.0 2.0 1.1 0.9 0.8

Net Debt/Equity 1.2 0.4 (0.1) 0.1 (0.2)

Interest coverage 57.1 17.3 12.8 8.8 8.4

Valuation parameters (x)

P/E 17.8 9.8 5.1 8.1 11.0P/BV 5.6 4.2 2.3 1.9 1.7

EV/ EBITDA 5.5 3.9 2.7 3.0 2.7

EV/ Sales 2.4 1.7 1.0 1.1 0.9

M-Cap/ Sales 2.0 1.3 1.0 1.1 1.0

EV/Ton (US$) 55.3 48.0 34.1



6/7

6 Shree Cement

Disclaimer

entrum Broking Pvt. Ltd.(Centrum) is a full-service, Stock Broking Company and a member of The Stock Exchange, Mumbai (BSE) and National Stock Exchange of Indiatd. (NSE). Our holding company, Centrum Capital Ltd, is an investment banker and an underwriter of securities. As a group Centrum has Investment Banking, Advisory andther business relationships with a significant percentage of the companies covered by our Research Group. Our research professionals provide important inputs into theroup's Investment Banking and other business selection processes.

ecipients of this report should assume that our Group is seeking or may seek or will seek Investment Banking, advisory, project finance or other businesses and mayeceive commission, brokerage, fees or other compensation from the company or companies that are the subject of this material/report. Our Company and Group

ompanies and their officers, directors and employees, including the analysts and others involved in the preparation or issuance of this material and their dependants, mayn the date of this report or from, time to time have "long" or "short" positions in, act as principal in, and buy or sell the securities or derivatives thereof of companies

mentioned herein. Our sales people, dealers, traders and other professionals may provide oral or written market commentary or trading strategies to our clients that reflectpinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent

with the recommendations expressed herein. We may have earlier issued or may issue in future reports on the companies covered herein with recommendations/nformation inconsistent or different those made in this report. In reviewing this document, you should be aware that any or all of the foregoing, among other things, mayive rise to or potential conflicts of interest. We and our Group may rely on information barriers, such as "Chinese Walls" to control the flow of information contained in oner more areas within us, or other areas, units, groups or affiliates of Centrum.

his report is for information purposes only and this document/material should not be construed as an offer to sell or the solicitation of an offer to buy, purchase orubscribe to any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract orommitment whatsoever. This document does not solicit any action based on the material contained herein. It is for the general information of the clients of Centrum.hough disseminated to clients simultaneously, not all clients may receive this report at the same time. Centrum will not treat recipients as clients by virtue of theireceiving this report. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individualients. Similarly, this document does not have regard to the specific investment objectives, financial situation/circumstances and the particular needs of any specificerson who may receive this document. The securities discussed in this report may not be suitable for all investors. The securities described herein may not be eligible forale in all jurisdictions or to all categories of investors. The countries in which the companies mentioned in this report are organized may have restrictions on investments,oting rights or dealings in securities by nationals of other countries. The appropriateness of a particular investment or strategy will depend on an investor's individualrcumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particularrcumstances and, if necessary, seek professional/financial advice. Any such person shall be responsible for conducting his/her/their own investigation and analysis of the

nformation contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document.

he projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties andontingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections andorecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecastsescribed in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with aiew toward compliance with published guidelines or generally accented accounting principles. No independent accountants have e xpressed an opinion or any other formf assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or warranty by orn behalf of the Company, Centrum, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For

hese reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including thessumptions underlying such projections and forecasts.

he price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses onny investments. Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. Actual results mayiffer materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. Centrum does notrovide tax advice to its clients, and all investors are strongly advised to consult regarding any potential investment. Centrum and its affiliates accept no liabilities for any

oss or damage of any kind arising out of the use of this report. Foreign currency denominated securities are subject to fluctuations in exchange rates that could have andverse effect on the value or price of or income derived from the investment. In addition, investors in securities such as ADRs, the value of which are influenced by foreignurrencies effectively assume currency risk. Certain transactions including those involving futures, options, and other derivatives as well as non-investment-grade securitiesive rise to substantial risk and are not suitable for all investors. Please ensure that you have read and understood the current risk disclosure documents before entering

nto any derivative transactions.

his report/document has been prepared by Centrum, based upon information available to the public and sources, believed to be reliable. No representation or warranty,xpress or implied is made that it is accurate or complete. Centrum has reviewed the report and, in so far as it includes current or historical information, it is believed to beeliable, although its accuracy and completeness cannot be guaranteed. The opinions expressed in this document/material are subject to change without notice and haveo obligation to tell you when opinions or information in this report change.

his report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media andhould not be reproduced, transmitted or published by the recipient. The report is for the use and consumption of the recipient only. This publication may not beistributed to the public used by the public media without the express written consent of Centrum. This report or any portion hereof may not be printed, sold oristributed without the written consent of Centrum. Neither this document nor any copy of it may be taken or transmitted into the United State (to US persons), Canada, orapan or distributed, directly or indirectly, in the United States or Canada or distributed or redistributed in Japan or to any resident thereof. The distribution of thisocument in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such

estrictions. Neither Centrum nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special oronsequential including lost revenue or lost profits that may arise from or in connection with the use of the information.

his document does not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained hereinhall form the basis of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not beistributed to the press or other media and may not be reproduced or redistributed to any other person. In particular, neither this document nor any copy thereof may be

aken or transmitted into the United States, Canada or Japan or distributed, directly or indirectly, in the United States, Canada or Japan or to any US person.

he distribution of this report in other jurisdictions may be restricted by law and persons into whose possession this report comes should inform themselves about, andbserve any such restrictions. By accepting this report, you agree to be bound by the fore going limitations. No representation is made that this report is accurate oromplete.

he opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of Centrum Broking and are given as ofhis date and are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and there can be no assurancehat future results or events will be consistent with any such opinions, estimate or projection.

his document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directors or anyther person. Information in this document must not be relied upon as having been authorised or approved by the company or its directors or any other person. Anypinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts any liability whatsoever forny loss arising from any use of this document or its contents or otherwise arising in connection therewith.


7/7

7 Shree Cement

Sanjeev Patni Head - Institutional Equities [email protected] 91-22-4215 9699

Research

Harendra Kumar Head - Research Strategy [email protected] 91-22-4215 9620

Dhananjay Sinha Economist Economy & Strategy [email protected] 91-22-4215 9619

Niraj Shah Sr Analyst Metals & Mining, Pipes [email protected] 91-22-4215 9685

Mahantesh Sabarad Sr Analyst Automobiles/Auto Ancillaries [email protected] 91-22-4215 9855

Madanagopal R Sr Analyst Power [email protected] 91-22-4215 9684

Abhishek Anand Analyst Media, Education [email protected] 91-22-4215 9853

Anand Dama Analyst Financial Services [email protected] 91-22-4215 9644

Ankit Kedia Analyst Media [email protected] 91-22-4215 9634

Himani Singh Analyst Hospitality, Healthcare [email protected] 91-22-42159865

Nitin Padmanabhan Analyst Technology [email protected] 91-22-4215 9690

Piyush Choudhary Analyst Telecom [email protected] 91-22-4215 9862

Pranshu Mittal Analyst Sugar, Retail [email protected] 91-22-4215 9854

Rajan Kumar Analyst Cement [email protected] 91-22-4215 9640

Rupesh Sankhe Analyst Real Estate, Infrastructure [email protected] 91-22-4215 9636

Saikiran Pulavarthi Analyst Financial Services [email protected] 91-22-4215 9637

Siddhartha Khemka Analyst Logistics [email protected] 91-22-4215 9857

Sriram Rathi Analyst Pharmaceuticals [email protected] 91-22-4215 9643

Adhidev Chattopadhyay Associate Real Estate [email protected] 91-22-4215 9632

Janhavi Prabhu Associate Sugar, Retail [email protected] 91-22-4215 9864

Jatin Damania Associate Metals & Mining, Pipes [email protected] 91-22-4215 9647

Vijay Nara Associate Automobiles/Auto Ancillaries [email protected] 91-22-42159641

Sales

V. Krishnan +91-22-4215 9658 [email protected] +91 98216 23870

Ashish Tapuriah +91-22-4215 9675 [email protected] +91 99675 44060

Ashvin Patil +91-22-4215 9866 [email protected] +91 98338 92012

Siddharth Batra +91-22-4215 9863 [email protected] +91 99202 63525

Centrum Securities (Europe) Ltd., UK

Dan Harwood CEO +44-7830-134859 [email protected]

Michael Orme Global Strategist +44 (0) 775 145 2198 [email protected]

Nicole Rappel Client Management +44 (0) 798 441 6878 [email protected]

Centrum Securities LLC, USA

Melrick DSouza +1-646-701-4465 [email protected]

Key to Centrum Investment Rankings

Buy: Expected outperform Nifty by>15%, Accumulate: Expected to outperform Nifty by +5 to 15%, Hold: Expected to outperformNifty by -5% to +5%, Reduce: Expected to underperform Nifty by 5 to 15%, Sell: Expected to underperform Nifty by>15%

Centrum Broking Private LimitedMember (NSE, BSE), Depository Participant (CDSL) and SEBI registered Portfolio Manager

Regn Nos

CAPITAL MARKET SEBI REGN. NO.: BSE: INB 011251130, NSE: INB231251134DERIVATIVES SEBI REGN. NO.: NSE: INF 231251134 (TRADING & SELF CLEARING MEMBER)

CDSL DP ID: 12200. SEBI REGISTRATION NO.: IN-DP-CDSL-20-99PMS REGISTRATION NO.: INP000000456

Website: www.centrum.co.inInvestor Grievance Email ID: [email protected]

REGD. OFFICE AddressBombay Mutual Bldg.,2nd Floor, Dr. D. N. Road, Fort,

Mumbai - 400 001

Correspondence AddressCentrum House, 6th Floor, CST Road, Near Vidya Nagari Marg,

Kalina, Santacruz (E), Mumbai 400 098.Tel: (022) 4215 9000

shree cement - update-120509

Documents