SHREECEM : Holding the 1.25% holding. Not adding more into it.
Pros
1. The balance sheet and the cash flow statements are looking pretty good. Debt to equity ratio as well as current ration over the last 5 years are higher than the industry average. Same is the case with free cash flow.
2. When looking into its competitors there is Ambuja and ACC under Adani, Ultratech, Grasim and the likes. So this is a pretty competitive sector with a lot of major players and Shree Cement don't have any special MOAT in this sector.
3. When looking into the shareholding pattern there is nothing suspicious. Promotor has more than 50% shareholding and shows their confidence. FII have more share holding than DIIs. Retailers have almost the same amount of share like FIIs.
Cons
1. The market share of the company is decreasing and the net income is lower than industry average.
2. Valuation is higher that the market average.
3. Growth is also lagging behind the market in financial growth.
Conclusion
At the current levels I don't have much confidence in the stock to increase my holding to 2.5% of the capital, which is the maximum I invest in a stock. So I'm keeping my current position of 1.25% on hold. But I will consider adding on to the position if the price falls to a much better position as mentioned in the chart, which is the low of the parallel channel line.
And if it moves up then will exit my position at around the top of the parallel channel line.
1. The balance sheet and the cash flow statements are looking pretty good. Debt to equity ratio as well as current ration over the last 5 years are higher than the industry average. Same is the case with free cash flow.
2. When looking into its competitors there is Ambuja and ACC under Adani, Ultratech, Grasim and the likes. So this is a pretty competitive sector with a lot of major players and Shree Cement don't have any special MOAT in this sector.
3. When looking into the shareholding pattern there is nothing suspicious. Promotor has more than 50% shareholding and shows their confidence. FII have more share holding than DIIs. Retailers have almost the same amount of share like FIIs.
Cons
1. The market share of the company is decreasing and the net income is lower than industry average.
2. Valuation is higher that the market average.
3. Growth is also lagging behind the market in financial growth.
Conclusion
At the current levels I don't have much confidence in the stock to increase my holding to 2.5% of the capital, which is the maximum I invest in a stock. So I'm keeping my current position of 1.25% on hold. But I will consider adding on to the position if the price falls to a much better position as mentioned in the chart, which is the low of the parallel channel line.
And if it moves up then will exit my position at around the top of the parallel channel line.
Trade active:
1.25% of capital invested at 23985.
Trade closed manually:
The current state of the overall Indian market appears to be somewhat overvalued, with even individual stocks reflecting valuations that exceed their fundamental metrics. In light of this assessment, I have identified more compelling investment opportunities within both the US and Indian markets, ones that I have a higher level of confidence in. As a result, I have made the strategic decision to realize profits from this position and strategically reallocate capital to these identified opportunities.
Closed the position at around 26135.60 INR.
Booked a profit of about 8.97% of the capital allocated.
Closed the position at around 26135.60 INR.
Booked a profit of about 8.97% of the capital allocated.
