Industry Profile: The manufacturing of building materials is an established industry in many countries, and the use of these materials is typically segmented into specific specialty trades, such as carpentry, insulation, plumbing, and roofing work. They provide the make-up of habitats and structures, including homes. India, as a market of building materials, is well developed and a leader in some segments. For example, India was the world’s second-largest producer of cement in the world in 2017.
The housing and real estate sector is the biggest demand driver of cement, accounting for about 65 percent of the total consumption in India. The other significant consumers of cement include public infrastructure at 20 percent and industrial development at 15 percent.
India’s total cement production capacity is nearly 455 million tonnes as of 2017-18. Cement consumption is expected to grow by 4.5 percent in FY19, supported by a pick-up in the housing segment and higher infrastructure spending. The industry is currently producing 280 MT to meet its domestic demand and 5 MT for exports requirement.
The real estate sector is one of the most globally recognized sectors. The real estate sector comprises four sub-sectors – housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the development of the corporate environment and the demand for office space and urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect, and induced effects in all sectors of the economy. It is also expected that this sector will incur more non-resident Indian (NRI) investments in the short and long term. Bengaluru is expected to be the most favored property investment destination for NRIs, followed by Ahmadabad, Pune, Chennai, Goa, Delhi, and Dehradun.
Company Profile: Shankara Building Products Ltd is an Indian-based company engaged in the business of an organized retailer of home and building products. The Company’s business units include retail, processing, and enterprise. The retail unit’s products include cement, scaffolding, steel pipes, roofing solution, plumbing, electrical, paints, tiles, exterior cladding, and solar products. The processing unit’s products include steel tubes, galvanized strips, cold-rolled strips, color-coated roofing sheets, bright rods, and scaffolding. Enterprise unit’s products include steel tubes, cement, and other building products. These principals include JSW, Sintex, Uttam Group, and APL Apollo.
There are 100 retail counters spread across the Shankara geography, which cater to a large customer base. The portfolio includes TMT & steel products, Fabrication items, Cement, Roofing solutions, CP fittings, Sanitary ware, Tiles, Wooden Flooring, Electrical, Plumbing items, and Aluminium Composite Panels, etc., to name a few. The Company was incorporated initially as Shankara Pipes India Private Limited on October 13, 1995
Shareholding Pattern: BSE Filing
Financials and Ratios : [table id=200 /]
Future Prospects: This Company is small and growing but not with speed. Around 10.4%. Some analysts are expecting it to grow earnings at 20%. The ratio, when compared with industry, is sufficiently good, but Future growth is not looking visible. I am writing it after reading the conference call, and the view is not clear. The Company’s debt is not a big issue as cash and other short-term assets are sufficient.
