Burnpur Cement Ltd.
CMP: Rs. 7.90
PE Ratio: 24.01
Industry: Cement – Major
Financial Analysis:
* The company is a very small player in the cement space and there is not much to talk about in its financials. The company has recently expanded its equity base and this is for expansion plans which can prop up revenue growth when the economy recovers.Business Analysis:
- 60% of cement usage is in the housing sector in India. So as long as that sector is down the cement demand will remain sublime. So in near term cement players will have nothing exciting to talk about in terms of their financials and growth.
- The long term prospects for this industry is however bright and good companis with efficient management are bound to do well.
Mehul had mentioned in his mail that the company has got good clients and this is surely a big positive for the company. But if I look in the cement space i find many many more great companies coming at even more attractive PE. So from that perspective I would personally not go for Burnpur cement.
Of course it does not mean that the company will not do well. But on a relative basis i believe that there are better players and in the current market scenario when big companies have also been beaten down out of shape its better to buy them then to look for small companies which have still a lot to prove.
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