3rd Quarter 2081
Shivam Cements Limited (SHIVM)
Fundamental Analysis – 3rd Quarter 2081
Key Takeaways (Simplified)
- Profitability Decline: Net profit has significantly decreased compared to both the previous quarter and the same period last year.
- Revenue Growth: Despite declining profit, revenue from sales has increased quarter-on-quarter and year-on-year.
- Decreased EPS: Earnings Per Share (EPS) has fallen considerably, reflecting the lower net profit.
- Strong Asset Base: The company maintains a robust asset base, with an increase in current assets.
- High Reserves: Reserves and surplus are strong and have increased year-on-year, indicating accumulated profits.
- Increased Liabilities: Total liabilities have risen significantly compared to the previous year.
- Operational Challenges: The report notes challenges like decreased sales volume, increased production costs, and high finance costs.
- Market Competition: High competition and market conditions are affecting sales volume and pricing.
Financial Snapshot (Key Figures – Upto 3rd Quarter)
| Metric | Upto 3rd Quarter 2081 (Current Year) | Upto 3rd Quarter 2080 (Previous Year) | Interpretation |
|---|---|---|---|
| Revenue from Sales | Rs. 8,630,940,320 | Rs. 8,111,260,947 | Revenue is growing year-on-year. |
| Net Profit After Tax | Rs. 405,190,094 | Rs. 709,368,095 | **Significant decrease** in profit year-on-year. |
| Earnings Per Share (EPS) | Rs. 9.17 | Rs. 16.05 | EPS has fallen considerably. |
| Total Assets | Rs. 25,603,639,121 | Rs. 24,946,808,610 | Assets have increased, indicating growth. |
| Total Liabilities | Rs. 12,949,619,102 | Rs. 10,798,642,392 | Liabilities have increased significantly. |
| Share Capital (Paid-up) | Rs. 4,420,000,000 | Rs. 4,420,000,000 | Stable. |
| Reserves & Surplus | Rs. 8,233,184,874 | Rs. 8,024,800,088 | Strong and growing reserves. |
| Book Value Per Share | Rs. 286.04 | Rs. 278.47 | Book value per share has increased. |
Qualitative Factors
- Production & Sales: The company notes a decline in sales volume in the current quarter, despite efforts.
- Cost Increases: Raw material costs (coal, clinker, gypsum) have increased, along with packing material costs.
- Finance Costs: Increased interest rates have led to higher finance costs.
- Market Dynamics: High competition and lower market prices are impacting profitability.
- Management’s Outlook: Management is focused on cost control, increasing market share, and improving sales volume. They anticipate a positive impact from upcoming infrastructure projects.
- Foreign Currency Risk: The company is exposed to foreign currency fluctuations for imported raw materials.
- Legal Disputes: Some ongoing legal cases may pose a risk.
Overall Assessment
Shivam Cements Limited shows mixed signals in its 3rd Quarter 2081 financial report. While revenue growth is positive and the company boasts a strong asset base and increasing reserves, a significant decline in net profit and EPS is concerning. This profitability dip is largely attributed to increased production and finance costs, coupled with challenging market conditions and intense competition. The company’s management is actively working on strategies to mitigate these issues and capitalize on future infrastructure development, which could be a catalyst for improvement.
- Moderate to High Risk: The decline in profitability despite revenue growth, coupled with increasing liabilities and cost pressures, suggests a moderate to high risk.
- Depends on Cost Control & Market: Future performance heavily relies on the company’s ability to control costs, manage finance expenses, and navigate competitive market dynamics effectively.
- Long-Term Growth Potential: For long-term investors, the strong asset base and potential benefits from infrastructure projects offer growth opportunities, provided the company can stabilize profitability.
- Monitor Closely: Close monitoring of future financial reports, cost management initiatives, and market conditions is essential for investors.
Disclaimer
This is a simplified fundamental analysis based on the provided document (3rd Quarter 2081). It is not financial advice. Investors should conduct their own comprehensive research and consult with a financial advisor before making any investment decisions.