UltraTech Cement (UTCEM IN) India

Materials

CHA-AM Advisors

An accident waiting to happen - once the Chinese have finished with the cement industry in Southeast Asia, India will be in their sights next. David Scott’s analysis reveals common characteristics of Indian cement companies to be: 1) Surprisingly low Returns On Equity and On Assets. 2) Extraordinarily high valuations. 3) In a more efficient market the EV/Sales would be a fraction of where they are now. 4) Substantial gearing amongst some of the smaller names. 5) Companies in the sector have been serial share issuers. David dreads to think what happens to UTCEM when the Indian cement boom is over, but sees the whole sector as a Sell.

- 09 August, 2024