At CMP of Rs. 672, Hyderabad Industries‘ shares are quoting at a PE of 5.59 on FY 2010E EPS of Rs. 120.27. The price is cheap and there is a strong demand for the products manufactured by Hyderabad Industries.
Hyderabad Industries Limited was incorporated in 1946 and is the flagship of the C.K. Birla group. Hyderabad Industries is the market leader in asbestos-based roofing industry under the brand name of “CHARMINAR”.
Hyderabad Industries manufactures Building Products (products like Fiber Cement Roofing Sheets Aerocon Panels and AAC Blocks) under the brand name "CHARMINAR" and "AEROCON" and Thermal Insulation Products like Calcium Silicate Insulation Products under the brand name "HYSIL".
| Hyderabad Industries Financials (crs) | ||
| Mkt. Cap | 499.95 | |
| P/E * | 5.56 | |
| Div | 0.00 | |
| EPS (TTM) * | 120.47 | |
| Book Value | 362.69 | |
| Debt Equity Ratio | 0.44 | |
| Return On Networth | 24.36 | |
| Current Ratio | 1.45 | |
| Quick Ratio | 0.59 | |
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* Calculated on adjusted profit after extra-ordinary items |
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Hyderabad Industries is the market leader in asbestos‐based roofing industry with an installed capacity of 8.5 lakh MT and a market share of around 20.5% and is also the largest manufacturer of calcium silicate, insulation blocks, pipe sections.
Hyderabad Industries outperformed fibre cement sheet industry with 7% growth as compared to 4.5% FY09 growth of industry.
Hyderabad Industries’ FY 2010 results
Hyderabad Industries announced strong fourth quarter results. Hyderabad Industries‘s Q4 net profit was up at Rs 26.2 crore versus Rs 8.4 crore. Net sales came in at Rs 206.4 crore versus Rs 183.8 crore.
The Building Products division is high margin business for Hyderabad Industries contributing 95% to sales in FY2010. Hyderabad Industries‘ revenues from Building
products increased by 14% and Thermal Insulation Products increased by 14% on Y-o-Y basis in FY2010. PBIT for Building products increased massively by 79% & thermal insulation product division rose by 15% for FY2010.
Future prospects for Hyderabad Industries:
Abhay Shankar, Managing Director of Hyderabad Industries expects double-digit growth going into next quarter. He also pointed out that Hyderabad Industries was planning capex of Rs 100 crore in FY11 and that the funds for capex would be raised by a combination of debt and internal accruals.
Abhay Shankar also stated that he expected the margins to hold at Q4 levels.
Hyderabad Industries’ Research Report
Outlook for the Industry:
The Cement sheet industry has a market size of around Rs. 40 bn. This is expected to grow at around 7%‐8% in the near future due to the initiatives undertaken by the government for upliftment of the rural population. Hyderabad Industries will be benefited by the growing market. There will be no dearth of demand for the products of Hyderabad Industries.
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