Analysis: Mangalam Cement Limited

Growth thesis

Mangalam Cement produces PPC cement, clinker, and timber MDF, with cement accounting for 83%+ of operations and MDF scaling to 3,000 tons/month by June 2022. Growth hinges on ₹200-300/ton power-cost cuts from resuming linkage coal (post-June 2022), full MDF profitability by FY23, and waste-heat recovery (WHR) reducing captive power costs. Brown-field expansion plans are pending board approval, with capex funded via internal accruals. Profitability depends on sustaining 96% utilization, where incremental sales directly improve margins due to debt-free fixed-cost structure. Key execution risk: delayed coal linkage resumption or MDF demand shortfall.

Why is Mangalam Cement Limited stock rising?

• Fly ash supply for Aligarh plant secured with new unit operational and additional source starting, ensuring consistent raw material for dispatches.
• Timber MDF division ramping up to full capacity (3,000 tons per month) by June 2022, targeting profitability in current fiscal year.
• Linkage coal supply, pending for 22 months, expected to resume post-June 2022, potentially reducing power and fuel cost by Rs 200-300 per ton and saving Rs 30-40 crores annually.
• Company plans capacity expansion through acquisition, subject to board approval expected soon.

Research report

companyname: Mangalam Cement Limited ticker: MANGLMCEM sector: Cement / Building Materials The Indian cement industry is highly fragmented at the bottom but concentrated at the top. The top 10 players control roughly 60-65% of the market. The rest is split among dozens of regional and mid-sized players like Mangalam Cement. The industry operates on a regional logic: cement is heavy and has a low value-to-weight ratio, so plants serve markets within a 300-500 km radius. A player in Rajasthan com...

Catalysts

margin expansion

Growth guidance

No guidance