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INDIACEM - Fundamental Analysis: Financial Health & Valuation

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Rating: 2.8

Last Updated Time : 02 Feb 26, 01:08 pm

Fundamental Rating: 2.8

Stock Code INDIACEM Market Cap 13,573 Cr. Current Price 438 ₹ High / Low 490 ₹
Book Value 310 ₹ Dividend Yield 0.00 % ROCE -5.85 % ROE -9.32 %
Face Value 10.0 ₹ DMA 50 437 ₹ DMA 200 388 ₹ Chg in FII Hold 0.30 %
Chg in DII Hold 0.55 % PAT Qtr 2.00 Cr. PAT Prev Qtr -6.86 Cr. RSI 46.0
MACD 2.73 Volume 4,73,983 Avg Vol 1Wk 4,86,623 Low price 239 ₹
High price 490 ₹ Debt to equity 0.14 52w Index 79.4 % Qtr Profit Var 101 %
EPS -3.29 ₹ Industry PE 30.0

📊 Core Financials

  • Revenue & Profitability: PAT turned positive at 2 Cr. from a loss of -6.86 Cr. QoQ, but overall profitability remains weak.
  • Margins: ROE at -9.32% and ROCE at -5.85% indicate poor efficiency and shareholder value erosion.
  • Debt: Debt-to-equity ratio of 0.14 is low, reflecting manageable leverage.
  • Cash Flow: Dividend yield of 0.00% shows no shareholder payout, limiting investor reward.

💹 Valuation Indicators

  • P/E Ratio: Not applicable due to negative EPS (-3.29 ₹).
  • P/B Ratio: Current Price (438 ₹) / Book Value (310 ₹) ≈ 1.41, reasonable valuation.
  • PEG Ratio: Not available, limiting growth-adjusted valuation analysis.
  • Intrinsic Value: Current price near DMA 50 (437 ₹) and above DMA 200 (388 ₹), suggesting technical support but fundamentals remain weak.

🏦 Business Model & Competitive Advantage

  • India Cements operates in cement manufacturing, serving construction and infrastructure demand.
  • Competitive advantage lies in established brand and regional presence, but profitability challenges persist.
  • Overall health is weak due to negative returns despite low debt levels.

📈 Entry Zone & Long-Term Guidance

  • Entry Zone: Safer entry between 380 ₹ – 400 ₹, closer to intrinsic value and support levels.
  • Long-Term Holding: Risky for conservative investors due to negative returns. Suitable only for speculative investors betting on sector recovery.

✅ Positive

  • Quarterly PAT turned positive (2 Cr. vs -6.86 Cr.).
  • Low debt-to-equity ratio (0.14) ensures financial stability.
  • Institutional support with FII (+0.30%) and DII (+0.55%) increases.

⚠️ Limitation

  • Negative ROE (-9.32%) and ROCE (-5.85%) show poor efficiency.
  • No dividend yield, limiting investor reward.
  • EPS remains negative (-3.29 ₹).

📉 Company Negative News

  • Persistent weak profitability despite slight improvement in PAT.
  • Stock trading below recent highs (490 ₹), showing limited momentum.

📈 Company Positive News

  • PAT turned positive QoQ, showing early signs of recovery.
  • Institutional holdings increased, reflecting confidence from FII and DII investors.

🏭 Industry

  • Industry PE at 30.0 highlights stronger profitability among peers compared to India Cements.
  • Cement sector growth driven by infrastructure and housing demand.
  • Competition from larger cement players limits pricing power.

🔎 Conclusion

  • India Cements shows slight improvement in profitability but remains fundamentally weak with negative returns.
  • Low debt provides some stability, but valuation is only reasonable if earnings improve.
  • Best suited for speculative investors entering near 380–400 ₹, while conservative investors should avoid until profitability stabilizes.

Would you like me to also prepare a comparative HTML report of India Cements versus peers like UltraTech and Shree Cement to highlight relative valuation and profitability strength?

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