Shivam Cement : A company Analysis is it worth to invest

Link = nepsedirect.com

Shivam Cement : A company Analysis is it worth to invest

By: Mukunda Bhattarai Jul 20, 2018

 

Shivam Cement : A company Analysis is it worth to invest 

Government of Nepal minister of finance has made policy to encourage manufacturing and production sector for the issuances of shares to the general public. Government has made policy and if a production & manufacturing industry issue at least 10% of total capital to the general public that manufacturing organization will get 10% tax exemption for three years. In the current budget of government , government has made policy and all  companies which have paid-up capital more than 1 arba should issue IPO to general public.   Security board of Nepal is also giving more emphasis to  manufacturing and production sector. Since large portion of capital market is covered by banking and financial sectors market doesn’t seem realistic as per the economy of the country  so SEBON is encouraging manufacturing and production sector to issue IPO.

 Shareholder's Equity of Shivam Cement

The following figure shows the quantitative scenario of shivam cement. The following diagram shows current amount of reserve, share premium and paid up capital.

sales

Shivam cement has paid of capital of rs 3 arba 87 karod and 20 lakha right now. After the issue of 52 lakha 80 thousands IPO to locals and general public paid up capital will be increased by 13.64 % and new paid up capital will be RS. 4 thousands 4 hundred million (4 arba 40 karod ). But reserve won't be changed because of IPO issue. Shivam cement is going to issue IPO in premium price so there will be 1 arba 49 karod 60 lakha share premium amount will be added to the shareholder's equity. After the issue of IPO company's shareholders equity will be stronger than before.

The following diagram shows the condition of sales, expenses, stock and net profit of the shivam cement.

pie

 

The above diagram shows that company has lower operating expenses. The ratio of total operating ratio to sales is just 0.18745 times (18.75%).  The company has also maintained the good stock and this shows that company can earn good amount of profit in near future. Within this 3 rd quarter company has earned 93 karod 66 lakha 64 thousands two hundred 74 net profit. Company has 13.18 % net profit margin.

Key Indicators of Shivam Cement

In this part of the company analysis key indicators of companies are included. The data are shown in the following table:

S.N

Particulars

Amount (Rs)

1

EPS

32.25 ( annualized)

2

Net worth

Current

After IPO

155.91

183.2

3

Profit margin

13.18%

 

The above table shows that company has good earnings per share. After the IPO due to the increase in number of shares outstanding earning per share will be decreased to Rs.28.38. Net worth per share of company is Rs. 155.91 right now and after the IPO net worth will be increased by 17.51 %. 

While looking at the fundamental analysis of the company it can be a better choice to invest. It can be regarded as good option to add in your portfolio because there are few manufacturing companies listed in NEPSE. Government of Nepal is also giving tax exemption facility to manufacturing companies which has issued more than 10 % shares to the general public. So, we can except  more growth in net profit in coming years.

 

Shivam Cement