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Rerating Quarter

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It’s time to revisit mid-cap stock valuations and there are potential target upgrades over the medium to long term, says VAIBHAV AGARWAL of PhillipCapital India.

Ground checks and interactions with various stakeholders in the cement industry suggest that significant potential upsides exist for mid-cap stocks over the medium to long term. Given a favourable demand scenario, we understand cement prices have been raised across pockets by ~10 per cent and further price hikes of 3-5 per cent cannot be ruled out in May 2017.

After the monsoon arrives, cement prices are unlikely to be increased until the end of H1FY18. Even if prices drop, we expect them to remain 5-6 per cent higher than March prices. The Goods and Services (GST) tax regime is unlikely to make an unfavourable impact on cement prices; if it benefits due to GST, the industry may pass on some of those gains. EBITDA may surge in FY18/19 if robust cement price hikes sustain. Rerating of valuations is imminent for mid-cap stocks and we do not rule out potential target upgrades in the medium to long term.

Positive Volume Commentary
Even assuming flat volumes in Q1, this will be a rerating quarter for the sector. We have seen volume commentary turning positive, but volume concerns persist in a few pockets (Tamil Nadu, Kerala and parts of Central India). Despite assuming flat volume growth for the sector, Q1 earnings are likely to surprise quite positively, driven by price hikes. In a conservative scenario (0 to -5 per cent), year-on-year (y-o-y) volume growth and with the current cement prices, Q1 sectoral EBITDA/tonne is likely to improve by 20-40 per cent quarter-on-quarter (q-o-q), 15-20 per cent y-o-y; absolute EBITDA could shoot up by a minimum of 15-20 per cent. With volumes turning favourable and no rollbacks in cement prices over the next two months, the potential is huge.

Mid-cap cash flows are robust and likely to accelerate debt repayments. Mid-cap stock valuations have always had the overhang of higher debt versus large caps. However, debt repayment for most mid-caps is likely to accelerate in Q1 as the sector sees robust cash generation. This will be a key rerating factor and is likely to drive valuations. We expect good sense will prevail in the sector and players will not rush in with fresh capex announcements.

Players are evolving and this makes prices more stable over the long run. Historically, price hikes have always been a call for concern (break in price discipline). We do not rule out intermittent price disturbances, but we understand that players are evolving.

Stable Pricing
Even newcomers to the industry understand the need for stable prices; they are also debt-ridden and cannot afford to operate in an unfavourable price scenario. This gives us confidence that price hikes are more sustainable than in the past. FY18 should be a turnaround year for stock valuations; we do not rule out the possibility of a partial rollback of the recent price hikes. However, even in a conservative scenario (if only 4-5 per cent price hikes sustain in FY18), EBITDA/tonne has the potential to improve by 10-15 per cent or even higher in certain cases.

Valuation gaps
The largest major of the sector trades at a per tonne valuation of $200, while most mid-caps trade at $70-120. As the scenario turns favourable and as mid-caps get rid of debt faster than expected, this valuation gap could narrow, to say, about 25 per cent discount to large-caps. The potential upsides can be huge.

We do not rule out potential target upgrades in the medium to long term; our current price targets for most mid-caps have built-in target valuations of $70-120/tonne. We see the valuation gap between mid-caps and large caps narrowing as sectoral dynamics turn favourable. We see further re-rating of mid-caps over the medium to long term.

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Economy & Market

Fornnax launches world’s biggest secondary/fine shredder for AFR pre-processing

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Fornnax has introduced its latest breakthrough – the R-MAX3300, for handling low-density waste streams, offering a powerful solution for cement AFR plants.

Fornnax Technology has launched its latest breakthrough – the R-MAX3300, the biggest secondary shredder in its class. The unveiling took place on 14th October, 2025 at IFAT India 2025 in Mumbai, one of the most prestigious events for environmental technologies, waste management, and sustainable resource innovation.

The launch ceremony was graced by esteemed industry leaders and dignitaries. The guest list included Md Fahim Sopariwala, CEO, GEPIL India; Sridhar Jagannathan, Vice President, Zigma Global; Priyesh Bhatti, CEO, GEPIL India; Shailendra Singh, Deputy General Manager, Prism Johnson (Cement Division); Ulhas Parlikar, Global Consultant, Waste Management, Circular Economy, Policy Advocacy and Co-processing; Saurabh Palsania, Joint President (Strategic Sourcing), Shree Cement; Rajeev Patel, DGM (Process), Mangalam Cement; and Anumodan Kumar Dubey, Mangalam Cement.

This state-of-the-art equipment represents a significant advancement for India’s recycling and waste processing landscape, offering a powerful solution for cement AFR plants and waste-to-energy facilities.

Building on the proven performance and legacy of the R Series secondary shredder, which has long been trusted for high-density materials like tyres and cables, the newly introduced R-MAX3300 is specifically engineered for handling low-density waste streams. These include Municipal Solid Waste (MSW), Commercial and Industrial (C&I) waste, Bulky waste, Legacy waste, Wood waste, and Construction & Demolition (C&D) waste.

By incorporating advanced shredding technology, the R-MAX3300 enables seamless and highly efficient production of Refuse Derived Fuel (RDF) and Solid Recovered Fuel (SRF) within the ideal particle size range of 30 to 50 mm. Its design prioritises versatility, durability and superior performance, directly supporting industrial operations that demand consistency and scale.

“The R-MAX3300 represents a monumental leap forward in our vision to become a global leader by 2030 in recycling technology through innovation,” said Jignesh Kundaria, Director and CEO, Fornnax Technology. “With the rising challenges of waste management in India and globally, this machine is not just a product; it’s a powerful tool for change. We engineered it to handle the most difficult waste streams with unparalleled efficiency, turning what was once considered unusable waste into a valuable resource. It directly addresses the urgent demand for effective, large-scale shredding technology that can support cement kilns and waste-to-energy facilities in achieving the desired output,” he added.

The launch of the R-MAX3300 arrives at a pivotal moment. India currently generates over 160,000 tons of municipal solid waste daily, while government-led initiatives such as Swachh Bharat Mission and Smart Cities are accelerating the demand for RDF and waste-to-energy solutions. Simultaneously, the global industrial shredder market is expected to grow at a 5–6 per cent CAGR, driven by stricter recycling regulations and increasing waste generation.

Kundaria further emphasised, “Our commitment goes beyond just selling machinery; it’s about empowering our customers to achieve lasting efficiency, sustainability, and growth. We see ourselves as a trusted partner who stands beside them at every step – from technology deployment to ongoing support, ensuring they can rely on Fornnax not only for performance but also for consistency, dependability, and long-term value.”

The R-MAX3300 is equipped to handle high-throughput processing of pre-shredded or coarse materials, making it ideal for SRF/RDF production, composting pre-treatment, and volume reduction for logistics optimisation. It is expected to play a crucial role in Integrated Waste Management Projects (IWMP) and bio-mining operations both within India and globally.

With this grand launch, Fornnax continues to set global benchmark and move decisively towards the vision of becoming global leader in recycling technology by 2030 that is state-of-the-art, innovative, economical, efficient reliable and eco-friendly.

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Concrete

Fornnax wins Top Domestic Sales Award 2024-25 by AIRIA

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Fornnax bags the Excellence in Top Domestic Sales Award 2024–25 by the All India Rubber Industries Association (AIRIA).

The company has been honoured with the Excellence in Top Domestic Sales Award 2024–25 by the All India Rubber Industries Association (AIRIA) under the Rubber Machineries and Equipment category. The award recognises Fornnax’s exceptional market leadership, strong sales performance and continued commitment to sustainable innovation.

With over a decade of specialised expertise, Fornnax has emerged as a transformative force in India’s tyre recycling sector, commanding nearly 90 per cent of the domestic market while steadily expanding across Europe, Australia, the GCC, and other global regions.

Fornnax’s advanced recycling systems—comprising the SR-Series Primary Shredders, R-Series Secondary Shredders, and TR-Series Granulators—are engineered for durability, efficiency, and high-output performance. These technologies are widely deployed in end-of-life tyre (ELT) processing and other waste management applications, reinforcing Fornnax’s reputation as a trusted industry partner.

Expressing his gratitude, Jignesh Kundaria, Director & CEO, Fornnax, said, “We are incredibly proud to receive this recognition from AIRIA. This award validates the trust that our customers and partners have placed in us over the years. I would like to extend my heartfelt gratitude to all our clients and partners who have been an integral part of this journey and our continued success. At Fornnax, our goal has always been to empower the recycling industry with innovative, high-performance solutions that make sustainability both achievable and profitable.”

The award also underscores Fornnax’s pivotal role in promoting circular economy practices by enabling the conversion of end-of-life tyres and rubber waste into reusable raw materials. Through ongoing R&D, new product innovation, and a solutions-driven approach, the company continues to help industries worldwide adopt eco-conscious, scalable recycling models.

As India’s recycling landscape evolves to meet global sustainability benchmarks, Fornnax stands at the forefront with internationally certified technology, a proven track record, and a clear vision for environmentally responsible growth.

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Concrete

Pacific Avenue Completes Acquisition of FLSmidth Cement; Rebrands as Fuller Technologies

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The acquisition of FLSmidth Cement by Pacific Avenue Capital Partners marks a new phase of focused growth and innovation.
Rebranded as Fuller® Technologies, the company will continue delivering world-class solutions with renewed investment and direction.

Pacific Avenue Capital Partners (“Pacific Avenue”), a global private equity firm, has completed its acquisition of FLSmidth Cement following the fulfillment of all customary closing conditions and regulatory approvals. The transaction includes all of FLSmidth Cement’s intellectual property, technology, employees, manufacturing facilities, and global sales and service organizations.

As Fuller Technologies, the company will continue to seamlessly support its customers while advancing its robust portfolio of capital equipment, digital solutions, and service offerings. With a sharpened focus on Pyro and Grinding technologies, alongside core brands such as PFISTER®, Ventomatic®, Pneumatic Conveying, and Automation, Fuller Technologies aims to deliver enhanced value and reliability across the cement and industrial sectors.

Under Pacific Avenue’s ownership, Fuller Technologies will benefit from increased investment in people, products, and innovation. The dedicated management team will work to optimize operations and strengthen customer relationships, ensuring continuity and excellence during this exciting transition.

“We are proud to be the new owner of FLSmidth Cement, now Fuller Technologies, a global leader with a rich history of providing mission-critical equipment and aftermarket solutions in the cement and industrial sectors. We will continue to build upon the Company’s legacy of being at the forefront of technological innovation, service delivery, and product quality as we support our customers’ operations,” says Chris Sznewajs, Managing Partner and Founder of Pacific Avenue Capital Partners.

Pacific Avenue’s deep experience in executing complex industrial carve-outs and guiding standalone businesses into their next growth phase will be instrumental in shaping Fuller Technologies’ future. With a proven track record in building products and capital equipment industries, Pacific Avenue is poised to help Fuller Technologies optimize performance, accelerate growth, and create long-term value for its customers and stakeholders worldwide.

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