>PRISM CEMENT LIMITED (HEM SECURITIES)

Company Snapshot: Prism Cement Limited is an ISO 9001:2000 certified company promoted by Rajan R heja Group which has diverse business interests. The company operates one of the largest single kiln cement plants in the country at Satna, Madhya Pradesh. Equipped with state-of-the-art machinery and technical support from F.L Smidth & Co., A.S Denmark, the world leaders in cement technology, the company has successfully created a niche for itself in the Indian cement industry.

The company manufactures Portland Pozzollana Cement (PPC) with the brand name ‘Champion’ and Ordinary Portland Cement (OPC). ‘Champion’, its largest selling product, is general purpose cement mainly used in housing construction. OPC is used for specialized applications like high rise buildings, bridges, AC sheets, pipes, poles, etc.

The company has the highest quality standards due to modern plant with automated controls. The strength and other characteristics of its cement are much higher than the BIS requirements. This together with brand building exercise has placed it in the premium price segment.

The company caters mainly to markets of UP, MP and Bihar which are within the radius of 340-370 kms of its plant at Satna, MP. The company has strong marketing network with over 2000 dealers serviced from 46 stocking points without any wholesalers.

Highlights/Recent updates: The Scheme of Amalgamation u/s 391-394 of the Companies Act, 1956 to amalgamate H. & R. Johnson (India) Limited and RMC Readymix (India) Private Limited with the Company has been approved with the requisite majority by the shareholders and creditors of the Company. The Scheme is subject to the approval of High Courts of Judicature at Bombay and Andhra Pradesh. The Amalgamation will be accounted from the appointed date of April 01, 2009 on getting necessary approvals.

The all-stock deal will transform the Madhya Pradesh-based company into an integrated building material supplier with a major presence in tiles and sanitary ware and readymix concrete. However, a cause for concern is the poor profitability of the tiles and RMC business, which could pull down the operating margin of the combined entity.

To read the full report: PRISM CEMENT