Arihant Capital 's research report on Shree Digvijay Cement Company
Shree Digvijay Cement Company Limited (SDCCL) is an India-based Company incorporated in 1944. The company currently is managed by Private Equity firm named True North Fund VI LLP. Company is engaged in the manufacturing and selling of cement .Company caters to domestic as well as export market. Company has a manufacturing facility at Sikka, Jamnagar. The manufacturing capacity stands at 1.20 Million Tons per Annum housing a Fully Automatic Modern Cement Plant. Company has been unique trendsetter in providing superior quality of ordinary & special Portland cement .Company has high growth potential in cement sector backed by : 1) Strong Brand image; 2) Monopoly in oil well cement brand 3) Better operational efficiency 4) Good Management team.
We estimate SDCCL topline to grow at a CAGR of 10.6% over the period of FY20-22E backed by improved realization with increase in demand for cement as infrastructure and construction activity starts picking up, Moreover low raw material cost and better operational efficiency will aid margin improvement going ahead, We initiate coverage on SDCCL with ‘Buy’ rating having a target price of Rs 75, which gives a potential upside of 27.4%.
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