COMPANY OVERVIEW:
Anjani Portland Cement Limited, formerly known as M/s. Shez Cement Limited was set up in the year 1983 at Chintalapalem Village in Nalgonda District of Andhra Pradesh. The unit was set up in technical collaboration with Nihon Cement Company of Japan.
In the year 1999 Mr. K.V.Vishnu Raju, erstwhile Managing Director of M/s. Raasi Cement Limited along with their associates took over the management of the company.
The Company’s flagship brand ‘Anjani Super Gold’ (PPC) with 53 grade and 43 grade has captured the market and is most popular and a house hold name in the state of Andhra Pradesh. The Company has also acquired license to manufacture 43 Grade Cement for supply to Government and other public works departments.

Capacity:
This 1600 T.P.D. Rotary Kiln plant is running above the rated capacity and is producing approximately 5 Lakh Tons of cement per annum. Anjani is in the process of expansion with an added capacity of 7 Lakh Tons by this year end and the total capacity of Anjani Cement by Jan, 2010 would be 1.2 Million tons per annum.

Industry Scenario:
The present production capacity of Indian Cement Industry is 232 Million Tons and the capacity additions will be 40 million tons every year for the coming next 2 years. At present India is the Second largest Cement Producer in the world. The growth of cement industry for the past 3 years has been excellent, growing at more than 10% per annum and it is expected to continue next one decade. Due to the focus of Government in building of infrastructure (ports, airports, four line highways, power plants, reservoirs, etc.,) and also due to boom in the economy, growth in residential housing will also increase.

INVESTMENT RATIONAL:
Book Value per share is around Rs 36 per share.
Pays 15% dividend.
Company is expanding the capacity and is aiming to have capacity of 1.2 million tons by FY10.
Company also has good land bank whose value could be unlocked.
Cement Industry is expected to grow at 10% annually for next 5 years.
Govt expenditure on infrastructure will benefit the company.
As the fear of recession is easing construction activity will pick and will benefit the company.
Growing urbanization is also a boon for the company.
Management of the company has good track record.
Company’s brand name is household name in Andhra Pradesh.

KEY RISKS:
Any economic slowdown will have adverse impact on the industry and company.
As the company business is concentrated in Andhra Pradesh, so any instability can affect the company.
Competitions from big players are always a concern.

	NO. OF SHARES	% OF TOTAL
PROMOTERS	11298130	61.44%
INSTITUTION	59100	0.32%
GENERAL PUBLIC	7032367	38.24%
GRAND TOTAL	18389597	100%

	31/03/07	31/03/08	31/03/09
TOTAL INCOME	89.14	135.56	129.4
EXPENDITURE	-70.67	-102.92	-90.04
PBDITA	18.47	32.64	39.36
DEPRECIATION	-2.28	-3.13	-3.73
PBIT	16.19	29.51	35.63
INTEREST	-3.64	-6.56	-6.29
PBT	12.55	22.95	29.34
TAX	0.04	-6.74	-8.67
PAT	12.59	16.21	20.67

Key Highlights:
CAGR IN TOTAL INCOME IS 20.4%.
CAGR IN PBDITA IS 46%.
CAGR IN PAT 28%

	31/03/07	31/03/08	31/03/09
EPS	6.879781	8.857923	11.29508
PBDITA MARGIN	20.72022	24.0779	30.41731
NPM	14.12385	11.9578	15.97372
INTEREST COVER	4.447802	4.498476	5.664547

EPS has grown at CAGR of 28% from Rs 6.87 to Rs 11.3.
PBDITA margin improved over a period of 2 years from 20% to 30%.
NPM showed slight improvement of 190 basis points from 14.1% to 16% .
Interest cover remained almost flat.

	Q1FY2009	% CHANGE	Q1FY2010
TOTAL INCOME	34.82	9.90%	38.27
EXPENDITURE	-22.32		-24.65
PBDITA	12.5	9%	13.62
DEPRECIATION	-0.91		-0.96
PBIT	11.59		12.66
INTEREST	-1.33		-2.03
PBT	10.26		10.63
TAX	-3.52		-3.6
PAT	6.74	4.30%	7.03

Key Highlights:
Total Income moved up by 9.9% on YoY basis.
PBDITA increased by 9% on YoY basis.
PAT increased by 4.3% on YoY basis.

VALUATION &OUTLOOK:
At CMP of Rs 34 the stock is trading at 3.5X to trailing twelve month earning. The industry average is 7.5X. We are value the company at 5X, the fair value we arrive at is Rs 55. The stock is real catch at this point.
Company also pays dividend of 15%, the dividend yield is 3.75% annually.
The outlook of the company remains bright. The industry is growing and lots of consolidation happening in the industry will make the company an easy target of biggies in the industry.
Management of the company is also very competent and has lots of experience. They know how to create value for the shareholders.

CONCLUSION:
Investors with investment horizon of 6-8 months could take position on this counter. The downside risk remains low at this level.