Cement Penny Stocks: Cement is a material that contributes to a country’s and state’s industrial success. Houses, schools, colleges, roads, hospitals, temples, and mosques are all composed of cement. Cement is essential to our daily life and progress. The cement business is an essential portion of the economy that investors frequently overlook in favor of more closely related industries such as infrastructure and transportation. However, by finding and investing in the top cement stocks, you may capitalise on India’s cement industry’s development potential.
IBEF estimates that the market size of the cement segment is expected to reach 5.99 billion tonnes by 2032. Naturally, the best cement stocks on NSE and BSE will also benefit from this expected growth. Jasly can help you identify the best cement stocks to buy in India in the long term.
What is Cement Penny Stock?
Cement penny stocks are shares of minor cement companies that are usually sold at a low price. These stocks represent companies that manufacture, supply, or distribute cement and other building and infrastructure items. These enterprises often operate on a regional scale or specialize in a certain type of cement. They could be small-scale producers, wholesalers, or specialists in certain types of cement or concrete solutions.
Investing in cement penny stocks can be risky, but it can also be rewarding. These companies provide exposure to the construction sector, but they are also hazardous due to their tiny size, cyclical nature, and fierce rivalry.
Best Cement Penny Stocks
The cement penny stocks that we will talk about have the potential to provide high returns. However, since these stocks are penny stocks, there are also risks, so check them out yourself before investing. Investing in some of the top cement stocks in India can provide stable returns and passive income in the form of dividends. Here is a list of the top cement stocks in the country.
1. Oriental Trimex Ltd
Oriental Trimex Limited is a company established in 1996 and is engaged in marble trading and processing and granite mining. Its product portfolio includes white, beige, yellow, red, emperador, black and grey marble series as well as various types of travertine and onyx products. Market capitalization of ₹68.0 crore and a 50.4% sales growth, the company has faced financial challenges.
Oriental Trimex Limited has a ROCE of -6.40% and ROE of -11.4%. The current share price is ₹10.1. Although the company has a debt to equity ratio of 0.13, it has faced significant losses, with a profit after tax of ₹-19.8 crore and a net profit of ₹-8.40 crore. The public holding of the company is 72.4%, and promoters’ holding is 27.2%. This penny stock is not currently giving returns, but has the potential to give high returns in the future.
2. Udaipur Cement Works Ltd
Udaipur Cement Works Limited (UCWL), established on 15 March 1993, is headquartered in Jaipur, Rajasthan and is a subsidiary of JK Lakshmi Cement Limited, a part of the venerable JK Organisation with a rich business heritage of over 135 years. UCWL markets its cement products under the brand name “Platinum Heavy Duty Cement”. The company has a market capitalisation of ₹1,564 crore and a current stock price of ₹28.
Although sales grew by 20.8%, profit growth declined by 72.7% and profit after tax stood at ₹9.95 crore. The company has a ROCE of 7.74% and ROE of 8.78%, while the debt-to-equity ratio is 2.11. The promoter holding is 75.0%, indicating a strong commitment on the part of the parent company.
3. Navkar Urbanstructure Ltd
Navkar UrbanStructural Limited, formerly known as Navkar Builders Limited, was established in 1992 and specializes in construction and infrastructure development projects. The company provides services such as ready mix concrete and reinforced cement concrete (RCC) pipes. Navkar UrbanStructural Limited executes projects for various government departments and private organizations.
The stock has a market capitalization of ₹297 crore and the current stock price is ₹13.2. The company is facing challenges in terms of profitability resulting in a ROCE of less than 1.00% and ROE of 0.64%. Despite a debt-to-equity ratio of 0.04%, the company reported a profit after tax of ₹2.01 crore. The public holding in the company is 65.0%, while the promoters hold 35.0%.
4. Bheema Cements Ltd
Bheema Cements Ltd manufactures and distributes cement products. Its product offerings include white cement, gray cement, PPC cement, and OPC cement. The company’s market capitalization is ₹61.6 Cr, with a current stock price of ₹18.9. Despite increased revenues, the company is facing serious financial issues, with a negative ROCE of -11.8% and ROE of -56.4%.
The company reported a profit after tax of ₹-33.7 Cr and a net loss of ₹-33.7 Cr for the year. Bheema Cements Ltd has a high debt-to-equity ratio of 4.64, with assets totaling ₹265 Cr and debt of ₹199 Cr. The promoter holds 46.5%, while the public holds 50.7%. Despite these losses, the corporation maintains some FII holdings at 2.76%.
5. Binani Industries Ltd
Binani Industries Ltd (BIL) is a holding company for the Braj Binani Group’s manufacturing activities, which include zinc, glass fiber, and downstream composites. The company has a market capitalization of ₹38.6 crore and a current stock price of ₹12.3. BIL has seen serious financial issues, with sales growth of -100% and a profit after tax of ₹-7.08 Cr. Despite the hurdles, profits increased by 95.2%.
The company’s total assets are assessed at ₹15.6 Cr, with a significant debt of ₹173. The corporation pays no dividends and has a debt-to-equity ratio that indicates its excessive leverage. The public holds 45.6%, while the promoters have 52.6%.
Understanding the Risks of Investing in Top Cement Penny Stocks
Investing in top cement penny stocks carries significant risks that investors should carefully examine. The cement industry is extremely cyclical and heavily reliant on the construction and real estate sectors, thus economic downturns can have a significant influence on demand and profitability. Furthermore, the sector is extremely competitive, with both regional and national companies vying for market dominance. Smaller enterprises may struggle to defend their market position and pricing power in the face of larger competition.
Energy cost sensitivity is also a big risk because cement manufacture is energy intensive, and fluctuations in energy prices can cause significant changes in production costs and profit margins. Environmental rules are also tightening, and satisfying tougher emission limits and sustainability criteria can place a hardship on smaller businesses. Finally, full capacity utilization is critical in this capital-intensive business, and during economic downturns, smaller enterprises may experience surplus capacity, resulting in lower earnings.