Expect 30-35% upside in Prism Cement: Shenoy

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Expect 30-35% upside in Prism Cement: Shenoy

Expect 30-35% upside in Prism Cement, says Sandeep Shenoy, Antique Stock Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other Experts & Brokerages are saying about Prism Cement See messages about Prism Cement Prism Cement BSE | NSE 30/05/12 Are Mutual Funds betting on Prism Cement?

Expect 30-35% upside in Prism Cement , says Sandeep Shenoy , Antique Stock Broking.

Shenoy told CNBC-TV18, "I think cement for the last eighteen months or twenty-four months, the markets have been quite negative touting the overcapacity and all. But in the last four quarters, I think the overcapacity concerns have been to a large extent addressed by the players themselves. You get some kind of a sporadic depressions in Andhra and Southern markets which have a bearing on the sentiments rather than on the numbers of the company but Prism Cement is a central Indian player and I think the largest ramp up in cement which happened because of multiple plants in Central India going onstream didn't impact it much and it did impact its OPM or EBITDA per tonne. But this company ofcourse is scaling up its operation, it will be 6 million tonne by the end of this calendar year or probably definitely by the fiscal year."

He further added, "It has also got two other lines of business, which are going to give profits EBITDA as well as bottomline. So prima facie viewing it only as a 6 million tonne cement company, may not be making it a cheap company at the current valuation but if you take the other two businesses, the RMC business as well as the tiling and bathroom business, I think they are coming free for you. So this company leave somewhere close to 30-35% on the table because for the simple reason, it is most of the capex is through and there is a potential of another capex coming up, which could be funded from its own cash flows."