Dolly Khanna increases stake in NCL Industries

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Pee Vee
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Dolly Khanna increases stake in NCL Industries

Post by Pee Vee » Fri Oct 08, 2021 11:03 am

Dolly Khanna has increased her stake in NCL Industries, a cement manufacturer, in the 4th Quarter. The stock has doubled in value in the last one year.

The shareholding pattern of NCL Industries for the September quarter reveals that Dolly Khanna owned 8,01,062 shares or 1.77 per cent stake in NCL Industries compared with 7,93,806 shares or 1.75 per cent stake she owned in the company as of June 30. She owned 7,67,806 shares in NCL as of March 31 and entered the scrip in December 2020 quarter with 4,83,580 shares.

Dolly Khanna's stake is worth about Rs 19 crore at the CMP of Rs 231.

The stock is recommended as a buy by CRISIL.

"Net worth and gearing are healthy at around Rs 665 crore and 0.43 time, respectively, as of March 31, 2021. Debt protection metrics are also healthy with interest coverage and net cash accrual to total debt ratios of 13.2 times and 0.62 time, respectively, for fiscal 2021. The company is currently undertaking debt funded capital expenditure of over Rs 250 crore to increase its cement capacity by 1 MTPA which is estimated to take about 18 months’ time after receiving the required approvals. Despite this, the financial risk profile is expected to remain comfortable," Crisil has recommended in a research report.

The stock has delivered 120 per cent return in the last one year and around 326 per cent from March 2020 lows. It was still trading at 52 per cent discount to its 5-year average price-to-sales and 18 per cent discount to its 5-year average trailing PE.

NCL operates in South India and about 80 per cent of its cement business comes from Andhra Pradesh and Telangana. It has clinker and grinding capacity of 2.6 million tonnes and 2.7 million tonnes, respectively.

NCL has cement bonded particles boards capacity of 90,000 tonne per annum and hydro power plants with total capacity of 15.75 MW. The company has also added a plant to manufacture premium doors with a capacity of 1,000 doors per day.

Abundant availability of limestone in captive mines along with availability of captive power adequate helps NCL industries meet 30-35 per cent of its current requirement and its advantageous location results in moderate operating efficiency, Crisil said last month.

The company has diversified its product profile by venturing into other building material such as ready-mix concrete, cement bonded particle boards and doors. The products are marketed under the brands "Nagarjuna Cement”, “Nagarjuna RMC”, “Bison Panels” and “NCLdoors”.

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