Shree Cement Pulling ahead
SRCM announced the acquisition of JPA´s Panipat grinding unit (1.5 mTPA) for Rs 3.6 bn (US$ 40/t). Given its excess clinker capacity in North, the acquisition is a shot in the arm as it provides a ready grinding capacity at a reasonable valuation. It also brings the company closer to its target of 25 mTPA by 2015. The company may show positive movement in stock valuations given, 1) Unmatched operational excellence, outlined in its lowest cost; and 2) Capital cost leadership, as demonstrated through continued reinvestment at reasonable cost.