INDIACEM - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.7
| Stock Code | INDIACEM | Market Cap | 14,365 Cr. | Current Price | 464 ₹ | High / Low | 490 ₹ |
| Book Value | 310 ₹ | Dividend Yield | 0.00 % | ROCE | -5.85 % | ROE | -9.32 % |
| Face Value | 10.0 ₹ | DMA 50 | 440 ₹ | DMA 200 | 390 ₹ | Chg in FII Hold | 0.30 % |
| Chg in DII Hold | 0.55 % | PAT Qtr | 2.00 Cr. | PAT Prev Qtr | -6.86 Cr. | RSI | 55.4 |
| MACD | 4.10 | Volume | 3,22,152 | Avg Vol 1Wk | 5,11,305 | Low price | 239 ₹ |
| High price | 490 ₹ | Debt to equity | 0.14 | 52w Index | 89.8 % | Qtr Profit Var | 101 % |
| EPS | -3.29 ₹ | Industry PE | 30.8 |
📊 India Cements shows weak fundamentals for long-term investment. ROE at -9.32% and ROCE at -5.85% reflect poor efficiency and negative returns. EPS is negative (-3.29 ₹), and dividend yield is 0%, offering no income support. Although quarterly PAT turned positive (2 Cr. vs -6.86 Cr. previously), profitability remains fragile. Debt-to-equity at 0.14 indicates low leverage, which is a positive. Current price (464 ₹) is above DMA 50 (440 ₹) and DMA 200 (390 ₹), showing short-term bullish momentum, but valuations are unclear due to absence of P/E. RSI at 55.4 suggests neutral momentum, while MACD at 4.10 indicates mild bullishness.
💡 Ideal Entry Zone: 390 ₹ – 440 ₹ (aligned with DMA 200 and DMA 50 support levels).
📈 Exit / Holding Strategy: If already holding, consider short- to medium-term holding only if profitability sustains and ROE turns positive. Exit near 480–490 ₹ resistance if earnings do not improve. Long-term holding is risky given negative return ratios and lack of dividend yield.
Positive
- 📌 Debt-to-equity ratio of 0.14 shows low leverage.
- 📌 Quarterly PAT turned positive (2 Cr. vs -6.86 Cr.).
- 📌 Price above DMA 50 and DMA 200 indicates short-term bullishness.
- 📌 Institutional support with FII (+0.30%) and DII (+0.55%) inflows.
Limitation
- ⚠️ ROE at -9.32% and ROCE at -5.85% are negative.
- ⚠️ EPS at -3.29 ₹ reflects weak earnings.
- ⚠️ Dividend yield at 0% offers no income support.
- ⚠️ Valuations unclear due to absence of P/E ratio.
Company Negative News
- ❌ Persistent weak profitability despite recent PAT improvement.
- ❌ Negative return ratios limit long-term attractiveness.
Company Positive News
- ✅ PAT turned positive in the latest quarter.
- ✅ Institutional investors increased holdings (FII and DII).
Industry
- 🏭 Industry PE at 30.8 highlights stronger sector valuations compared to India Cements’ weak earnings profile.
- 🏭 Cement sector supported by infrastructure growth and housing demand, but company-specific fundamentals remain weak.
Conclusion
🔎 India Cements is currently a weak candidate for long-term investment due to negative ROE/ROCE, fragile profitability, and lack of dividend yield. Best suited for speculative investors who can accumulate near 390–440 ₹ and exit near 480–490 ₹ if momentum sustains. Long-term holding is not advisable unless profitability improves significantly.