Cement Players Diversing Towards Realty.

Cement Plant Park
Photo by masck
The Braj Binani Group with a history of138 successful years is a well-diversified industrial house working actively in the core sectors of Cement, Zinc, Glass Fibre and Downstream Composite Products. Binani Cement is growing stronger and stronger and it’s reflected in the financial results as well. Mr. Vinod Juneja, Deputy Managing Director, Binani said,  “Binani Cement has keenly invested in a running virgin cement plant in China.

Now Binani cement which is the flagship company of the Binani Group — is crawling into commercial real estate development. The Binani group is planning to invade the realty sector even. The purpose behind this seems to cash in on its idle land bank and to reduce dependence on the cyclical nature of the cement business.

The Binani group has committed to develop an information technology park. This project will be done with a partner on 56 acres of land it has in Thane near Mumbai. The construction of the project is proposed to get started in a few months and is suppose to complete by next year.

The company’s managing director Vinod Juneja told ET that the company is “exploring many options including a joint venture”. He did not divulge any more details. The over supply of capacities by year-end — cement capacity is likely to go up by 50 mt from 240 mt some Cement analysts said. This will put pressure on prices leading to partial erosion of profitability. “This is why cement players are diversifying and looking for newer markets,” said an analyst.

The current price of Rs 75.60 discounts the company’s Q3 December 2009 annualized EPS of Rs 11.26, by a PE multiple of 6.71. A mid-cap cement maker has an equity capital of Rs 203.10 crore. Face value per share is Rs 10.

Binani Cement’s net profit surged 573.4% to Rs 57.17 crore on a 11.7% rise in sales to Rs 402.33 crore in Q3 Dec 2009 over Q3 Dec 2008.

Binani Cement which is engaged in manufacturing and marketing cement and non-ferrous metal is looking for newer markets. Since the stock had underperformed the market over the past one month till 9 March 2010, gaining 0.69% compared with the Sensex’s 6.30% rise. It outperformed the market in past one quarter, rising 8.72% as against 0.42% decline in the Sensex.