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India Cements' stock price has more than doubled over the past year

Mark Elliot Kingdon founded Kingdon Capital Management has purchased 15.7 lakh shares of India Cements for Rs.21.51 crore through its Mauritius-based entity Kingdon Holding I. Post the transaction, Kingdon's Holding in India Cements stands at 0.5%.

India Cements has also seen increased interest from domestic fund managers. Their holding has increased from 2.75% at the end of FY14 to 10.12% for the quarter ended June 2016. During this period, Sundaram AMC’s holding has increased by 42.82 lakh shares. Fund houses such as Birla Sun Life and Edelweiss have seen their holdings go up by 10.15 lakh shares and 17.81 lakh shares, respectively. Kotak AMC has added 17.88 lakh shares of the company, while Reliance AMC has 74.2 lakh shares more than its position in September quarter of FY14 as per ACE Equity data.

The cement company’s past has been mired in several controversies. Its Indian Premier League (IPL) franchisee Chennai Super Kings (CSK),was suspended from the competition. India Cements’ vice-chairman and managing director N Srinivasan also had to step down from his perch at the Board for Control of Cricket in India after Srinivasan’s son-in-law Gurunath Meiyappan was indicted in match fixing.

However, with all the controversies now seemingly behind it, the future looks better. In Q1FY17, the company’s results beat several analysts’ estimates. The company’s Ebitda grew 3.3% YoY to Rs.300 crore owing to lower costs. The savings came from higher usage of petcoke and increasing proportion of captive power. It also reported a 12% YoY growth in volume led by improved demand in Andhra Pradesh/Telangana, higher sales in East and West regions and export markets. It also paid down its debt by Rs.55 crore and its consolidated net debt now stands at Rs.3,100 crore.

All this has reflected in the stock staging a super recovery. In 2016, the stock has gained 45% as against the Sensex’s gain of 7%. From its 52-week low of Rs.64, the stock has more than doubled to Rs.140 and has outperformed its peers like ACC, Ambuja and Ultratech.