Associated Stone Industries (Kotah) Limited

Transcription

1 Associated Stone Industries (Kotah) Limited Date: 3 rd February, 216 Stock Performance Details Shareholding Details September 215 Current Price : ` 2.45^ Face Value : ` 1 per share 52 wk High / Low : ` / 16.5 Total Traded Volume : 83,917 shares^ Market Cap : ` crore^ Sector : Mining EPS (H1 FY16) : `.62 per share Equity Share Capital : ` 6.6 crore P/E (TTM) : 7.3 (x)^ P/BV (TTM) : 1.31 (x)^ Financial Year End : 1 st April 31 st March BSE Scrip Name : ASSOSTNB BSE Scrip Code : 5215 ^ as on 1 st February, 216 Particulars Shareholding Nos. (%) Promoter & Promoter Group Holding 93,33, Total Institutional Holdings (FIIs & DIIs). Public Holdings 39,23, Total 1,32,56, Background Associated Stone Industries (Kotah) Ltd. (ASI) established in 1945 is engaged in the production of a variety of stone products in various sizes and shapes. The Company has a presence in this industry for more than six decades. It holds the largest quarries in the world spread across 1 square kilometres at Ramganjmandi, situated in Rajasthan, which is the home of the most flawless Kotah Stone. The Company operates in three business segments Stone, Wind Power, and Trading of Steel and Other products. The Company s products include Kota stone and sandstone. Kota stone includes Kota Stone Blue and Kota Stone Brown. Sandstone includes Kandla Grey Sandstone, Rajgreen sandstone, Buff sandstone and White sandstone. Other stones include Oasis Designs, Waterfalls, Ripple, Novara, Versa and Venezzia. ASI has installed machines with a total of 4.75 MW wind power capacity in Tamil Nadu, Karnataka and Maharashtra. These plants contribute to the reduction in Carbon-Di-Oxide emissions to the extent of 4, tonnes per year. Under the Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC), the company has been successful in getting these projects registered under Clean Development Mechanism (CDM) with the Executive Board at Bonn, Germany. The company has been receiving Carbon Credits since April, 211for the next ten years. ASI Global Limited (ASIGL) Mauritius, a Wholly Owned Subsidiary of Associated Stone Industries (Kotah) Ltd. acquired Al-Rawasi Rocks and Aggregate L.L.C., (having Lime Stone Quarry and Stone Crusher unit), Fujairah, United Arab Emirates. ASI produces a staggering 15 Crore Sq. ft. of Kota Stone each year. The Company is equipped with diamond tool units for cutting, sawing and shaping various natural stones and produces some of the finest natural stones. An Initiative of the BSE Investors Protection Fund1

2 Financial Snapshot Particulars Standalone (` Million) Income Statement H1 FY16 H1 FY15 Income from Operations Y-o-Y Growth (%) EBITDA Y-o-Y Growth (%) EBITDA Margin (%) Net Profit 8.2 (17.9) Y-o-Y Growth (%) (145.8) (5.7) NPM (%) 1.1 (2.9) Balance Sheet Fixed Assets 1, ,63.2 Cash and Bank Balances Inventories Net Working Capital Net Worth 1, ,739.7 Balance Sheet Ratios ROCE (%) RONW (%).4 (1.) Source: Capitaline From the Research Desk of LKW s Gurukshetra On a Standalone basis, Revenue from Operations stood at Rs million in H1 FY16, thus increasing by 19.7% y-o-y from Rs million reported in H1 FY15.For H1 FY16, Revenues from the Stone Segment increased by 27.8% y-o-y to Rs million from Rs million in H1 FY15, whereas Revenues from the Wind Power Segment decreased to Rs. 7.3 million in H1 FY16 from Rs. 9.2 million in H1 FY15. Revenues from the Trading Segment increased by 9.3% y-o-y to Rs million from Rs million in H1 FY15. Material Cost increased by 14.9% on a y-o-y basis to Rs million in H1 FY16 from Rs million in H1 FY15.Employee Benefit Expenses stood at Rs million in H1 FY16thus higher by 16.4% y-o-y as compared to Rs million in H1 FY15. Power and Fuel Expenses stood at Rs million in H1 FY16 which is decrease of 4.6% y-o-y from Rs million in H1 FY15. Other Expenses stood at Rs. 19 million in H1 FY16 which is increased by 44.6% on a y-o-y basis as compared to Rs million in H1 FY15. The Company reported an Operating Profit of Rs million in H1 FY16 as compared to Rs million in H1 FY15. Depreciation Cost decreased to Rs million in H1 FY16 from Rs million in H1 FY15. Interest Cost increased to Rs million in H1 FY16 from Rs million in H1 FY15. Other Income increased from Rs million in H1 FY15 to Rs million in H1 FY16. ASI reported a Net Profit for H1 FY6 at Rs. 8.2 million as compared to a Net Loss of Rs million in H1 FY15 on account of higher Other Income. Operating and Net Profit Margins stood at 8.8% and 1.1% respectively in H1 FY16. An Initiative of the BSE Investors Protection Fund2

3 Inventories increased to Rs million in H1FY16 from Rs million reported in H1FY15. Cash and Cash Equivalents of the Company increased to Rs million in H1 FY16from Rs million in H1 FY15. Trade Receivables decreased to Rs million in H1 FY16 from Rs million in H1 FY15. ASI informed the Exchange on 1thAugust, 215 that the Board of Directors of the Company approved the adoption of new set of Articles of Association of the Company and for sub-division of Equity shares from Rs. 5 each to Re. 1 each. The same is subject to the approval of the shareholders of the Company. ASI informed the Exchange on 2 nd June, 215 that the commercial production has been commenced at the Company's Subsidiary named Al Rawasi Rock and Aggregate LLC, having Limestone Quarry and Crusher Unit at Fujairah, UAE with effect from 2 nd June, 215. Performance on the Bourses % Stock Performance Associated Stone Industries (Kotah) as on 21st January, 216 BSE Small Cap Peer Comparison The following table gives a snapshot view of the Company s performance vis-à-vis its closest peers for H1 FY16. (` In millions) Particulars Associated Stone Inani Marbles and Industries (Kotah) Industries Income from Operations EBIDTA Net Profit EBIDTA Margins (%) PAT Margins (%) Book Value Per Share P/E (x) 5.38^ 23.25^ P/BV (x) 4.83^ 2.4^ RONW (%).4 5. Source: Capitaline Financials on Standalone Basis ; ^ On a Standalone Basis as on September, 215 (TTM Basis) An Initiative of the BSE Investors Protection Fund3

4 About the Industry Management Outlook India is the largest producer in the world in the Mining Industry. The sector in India contributes nearly 2% of the country s gross domestic product (GDP) and employs over 6, people. There is a scope for new mining capacities in iron ore, bauxite, and coal. Untapped metal reserves in India are to the tune of 82 BT. Strong long-term demand from the steel industry is expected to further boost the iron ore industry. India s steel production is expected to increase from 1 MTPA to MTPA by FY16 and 3 MTPA by 225. The Government of India allowed 1% Foreign Direct Investment (FDI) in the steel sector under the automatic route. Nearly 31 MoUs have been signed with various states for planned capacity of about MT. According to the data released by Department of Industrial Policy and Promotion (DIPP), the Indian metallurgical industries attracted Foreign Direct Investments (FDI) to the tune of US$ 8.7 billion, respectively, in the period April 2 May 215. India has vast minerals potential with mining leases granted for longer durations of 2 to 3 years. The Government of India has launched a new urban development mission like 1 Smart Cities and 5 cities under AMRUT project, which include cities with a population of more than 1,, and some cities of religious and tourist importance. These programs will encourage construction and infrastructure sector in the next 1 years. New national program are being designed to facilitate investment, foster innovation, enhance skill development, protect intellectual Property and build best-in-class manufacturing and infrastructure. India has also been witnessing significant interest from international investors in the infrastructure space. Many international companies are keen on collaborating with India on infrastructure, high speed trains, renewable energy and developing smart cities. By 22, India is expected to emerge as the world s third-largest construction market with the support of the large infrastructure investments and growing urbanization. ASI expects good demand for Kotah stones in the years to come owing to The Government of India s encouragement to the Industries by way of Make in India initiative. Also due to wide usage and affordability of Kotah stone, its market will remain more or less stable and unaffected by market forces. The Company started using compressors running on GRID power against HSD based DG set to reduce cost. This is an initial effort resulting in cost saving. ASI is also planning to induct more compressors running on electricity in its area of operation. It has taken necessary steps through improved technology, optimum assets utilization and use of GRID power in replacement of DG sets to curb the cost. Advance R&D towards using of quarry waste to produce limestone related products is also in the pipeline. The Company installed electrical lines in Joganhedi and Suket which will result in further reduction in power cost. The Company has also started on line power trading for self - consumption during the peak working hours from Indian Electricity Exchange (IEX) which has also resulted into saving of power cost. All these initiatives will not only reduce the power cost but also curb pollution in the mining area. The Company has been constantly working on innovative mining techniques for mineral recovery, reduction of waste, environment friendly mining and increase in life of mines. High capital expenditure, changes in Government policies for mining and environment, slowdown in the construction and infrastructure sector and any other new restrictions or regulations besides competition from other players in the industry and dependency on the construction sectors, could be a few key points affecting the performance of the Company in the near future. An Initiative of the BSE Investors Protection Fund4

5 Financial Graphs 75 Net Income from Operations ` in Million H1 FY15 H1 FY16 EBIDTA & EBIDTA Margins ` in Million % H1 FY15 H1 FY16 EBIDTA EBIDTA Margins PAT & PAT Margins ` in Million % H1 FY15 H1 FY PAT PAT Margins An Initiative of the BSE Investors Protection Fund5

6 Disclaimer All information contained in the document has been obtained by LKW s Gurukshetra from sources believed to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and LKW s Gurukshetra in particular makes no representation or warranty express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements based on available data, and LKW s Gurukshetra shall not be liable for any losses incurred by users from any use of this document or its contents in any manner. Opinions expressed in this document are not the opinions of our company and should not be construed as any indication of our recommendation to buy, sell or invest in the company under coverage. Disclosure Each member of the team involved in the preparation of this report, hereby affirms that there exists no conflict of interest. The report has been sponsored and published as part of Initiative of BSE s Investors Protection Fund About Us LOTUS KNOWLWEALTH (LKW) commenced business in 1991 and is currently engaged in providing CAPITAL MARKET RESEARCH, INVESTMENT ADVISORY and STRATEGY services. GURUKSHETRA is the Research and Training arm of LKW. LKW Investment Advisers is the SEBI registered Investment Advisory arm of LKW. 5 Contact Us LOTUS KNOWLWEALTH Pvt. Ltd. Regd. Office: B Wing, 55-56, Fairlink Centre, Off Andheri Link Road, Andheri (W), Mumbai enquiry@lotusknowlwealth.com Tel: Website: An Initiative of the BSE Investors Protection Fund6