ContraPick 01 India Cements

Introduction
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India Cements (BSE 530005 NSE INDIACEM )is one of the well known cement companies in south India was set up in the year 1946.
The first plant of India Cements was built in the year 1949 in the province of Sankarnagar in the state of Tamil Nadu. Over the years the number of plants has been increased to seven which are located in two
state i.,  Andhra Pradesh (Yeramguntla, Chilamkur, Vishnupuram, Malkapur) and Tamil Nadu. (Sankar Nagar, Dalavoi, Sankari)
http://www.indiacements.co.in/

It is the largest producer of cement in the southern part of India with installed capacity of 14 MTPA as on 31 March 2010
http://www.indiacements.co.in/areports/pressrelease.pdf
the company has a market share of around 28% in the states of South India. It has aiming to increase the market share to around 35% over the next few years.
the company has vast limestone resource is optimization of the existing plants.
the company has its regional offices in all the states of South India and also in Maharashtra.and  around 10,000 stockists who distribute products throughout india
http://www.indiacements.co.in/Company%20profile.htm
Sankar Sakthi, Raasi Gold and Coromandel King: are the brands of cement have that high strength in them to meet the requirements of the infrastructure and development sector water resistant even in case of the rainy season. The cost of the brand is also affordable which make them very much preferred by the consumers all over the country.

The paid up equity share capital of the Company has increased to Rs.307.18 crore as on 31st March, 2010 comprising of 30.71 crore equity shares of Rs.10/- each and the book value stand at Rs 113.53 per share
The company has commitment to issue 1.1 crore shares to institutional investors which will make an estimated outstanding equity outstanding at 31.82 crore shares

At current market capitalisation at Rs 3627 crore (considering above shares) CMP Rs 114 the share trades at PE of 10 x forward earning(2010-11) of EPS of Rs 11 per share

India cements trading at discount to its net  intrinsic value Rs 6500 crore  as detailed below

Rs 6350 crore for its 14 MTPA cement capacity at replacment price of Rs 525 crore per MTPA accounting for cross holdings

Rs 990 crore for IPL team (based on floor price of 225 million USD for new team) with a committment of Rs 40 crore a year

Rs 750 crore for other business &investments
Which put a gross valuation of Rs 9090 as reduced by Debt Rs 2590 crore and net valuation of Rs 6500 crore
as against this at current market value of Rs 114 the intrinsic value per share is Rs 204 per share which is a discount of 44 percent
 
consider buying stock at lows based not on earnings but a contra pick on value unlocking