Comparative Analysis of NEPSE Listed Cement Companies

Feb 26, 2024 10:56 AM Merolagani

The export of cement to India has gradually increased after the government started giving subsidies to exports. Nepal has exported cement and clinkers worth Rs 2.06 billion by the month of Magh of the current FY. the country exported 2,147,000 tons cement and clinkers including 1,788,000 tons of portland cement and 359,000 tons of clinkers to India during the period.

Out of all cement companies, Shivam Cements (SHIVM), Ghorahi Cements and Sonapur Minerals are listed in the Nepal Stock Exchange (NEPSE) while Maruti and Saurya Cements are seeking approval to issue initial public offering (IPO) from the Securities Board of Nepal.

As per the second quarter financial reports published by the companies, only Shivam Cements managed to earn profit while Ghorahi and Sonapur Minerals are in losses. Listed in Manufacturing and Processing Group, these companies issued IPO at premium rate. Shivam Cements issued IPO before COVID-19 pandemic while Ghorahi and Sonapur recently issued IPO. For the last FY, Shivam Cements distributed 14.25 percent stock and 0.75 percent cash dividend for tax purposes while Ghorahi Cements distributed 15 percent stock dividend to its shareholders.

By the second quarter of the current FY, Ghorahi Cements (GCIL) incurred Rs 418.4 million while Sonapur Minerals incurred Rs 147.9 million in losses. Meanwhile, Shivam Cements earned net profit of Rs 148.6 million. Decline in operating income negatively effected profit of the companies. Moreover, the economic recession has slowed down construction projects which has also affected profit of the cement companies.

Out of three cement companies, Shivam Cements has the highest paid-up capial. Shivam Cements has paid-up capital of Rs Rs 5.02 billion, Ghorahi has Rs 4.56 billion and Sonapur (SONA) has Rs 3.07 billion in paid-up capital. In the meantime, Ghorahi Cements has Rs 2.65 billion in share premium, Sonapur has Rs 1.65 billion and Shivam Cements has Rs 956.2 million in premium.

In terms of operating income, Shivam Cements logs Rs 3.51 billion, Sonapur Rs 705.3 million and Ghorahi logged Rs 1.71 billion in operating income. Likewise, the companies penned the cost of sales of Rs 3.01 billion, Rs 610.5 million and Rs 1.51 billion respectively.

comments powered by Disqus