I have done a comparison of cement companies in India from an investment perspective. Cement is a major industry in India. With the government focusing on infrastructure growth, cement companies have come in focus. They may see improved demand going forward due to this push from the government. ACC, Ultratech, Ambuja, Shree Cement and Ramco Cement are the major players in the industry. Following is the comparison of the cement stocks. The yellow field highlights the best performer in that parameter.
As can be seen from the above table, Shree cement is the most expensive in PE terms. On the other hand, in terms of performance and recent growth rates, UltraTech scores far better and is much more cheaper to invest in as well. Also, ACC has the best ROCE in the industry and is available at a good valuation as well. Ramco cement on the other hand doesn’t outperform on any of the parameters. Based on the above, the ranking in terms of investments would be UltraTech at the top followed by ACC. Shree cement is able to command high valuations dues to much faster growth rates which it will have to maintain to be able to command the valuation multiples. The above comparison of the cement companies suggest that UltraTech scores better than other companies in this space from a fundamental perspective.
