Outlook Business — December 07, 2017

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My Best Pick

22 December 2017 / Outlook BUSINESS

R

oti, kapda aur makaan still contin-

ue to be the stuff that commoners

in this country are grappling to ful-

fi ll. Against such a backdrop, there

is one such company which is touching the lives of

millions of people across all classes of the society by

providing products and solutions to help them build

their dream homes. Having established its presence

in rural India, Everest Industries, which is into asbes-

tos, boards & panels and pre-engineered buildings,

is now venturing into semi-urban and urban areas.

Its USP lies in catering to diff erent segments of the

real estate market. Everest off ers a complete range of

roofi ng, ceiling, wall, fl ooring and cladding products

and pre-engineered steel buildings, which are distrib-

uted through a large network. The company sells its

products across 100 , 000 villages and 600 cities in In-

dia, and also exports to over 35 countries.

AS GOOD AS IT GETS

As per the 2011 Census, 60 % of Indian houses were

classif ied as pucca [permanent housing], 28 %

semi-pucca [semi-permanent] and 12 % as kutcha

[mud-house].

In India, almost 60 % of rural population uses

thatched roof/tiles for shelter. Thatched roof needs

regular replacement and tiled roof requires continu-

ous maintenance. Therefore, whenever economic con-

ditions improve, the fi rst choice of the rural poor is

to replace the roof over their head with an aff ordable

and relatively durable product such as cement asbes-

tos sheets.

With an increase in the allocation to # 23 , 000 crore

in F Y 18 for the Pradhan Mantri Awas Yojana –

Gramin and proposal to complete 10 million houses

by 2019 , for the homeless people living in ‘kuchha’

houses, rural demand is bound to grow. While there

are 20 players in the industry with 53 manufacturing

plants, Everest, with a focus on R&D, is expected to

introduce better value-added products. The rollout of

Everest Super Colour anti-fungal roofi ng sheets has

received excellent response in strategic markets such

as West Bengal. During its life cycle, asbestos loses

colour and also has issues of fungus formation, which

is a drag on product sales. To overcome this, Ever-

est introduced the anti-fungal roofi ng sheet, which

is expected to change the perception about asbestos.

It is a value-added product that will also fetch high-

er margin. If successful, it can account for a higher

share of revenues in the coming years.

The addressable market for boards and panels is es-

timated at around # 40 , 000 crore, growing at an aver-

age rate of 20 %. There are six players in the industry

producing identical or similar products with an an-

nual capacity of approximately 4. 7 lakh MT. India is

underpenetrated in terms of consumption of fi bre ce-

ment boards. Consumption in India is at 0. 2 kg/per-

son compared with 5 kg/person in Thailand and 3. 4

kg/person in US. Boards and panels are gaining ac-

ceptance in the commercial segment. Demand from

hotels, hospitals, organised retail and offi ce space is

expected to spur growth in this segment.

Everest is also coming up with innovative ideas to

market boards and panels as a complete solution,

such as providing space for concealed wiring inside

the boards and panels so that it can be used for mul-

Note: Market related data as on December 1, 2017; Financials

for FY17; Consolidated fi nancials considered wherever applicable

Data: Ace Equity

Closer home

Everest Industries has a balanced revenue mix

and caters largely to the domestic market

FY17 BUSINESS MIX* FY17 GEOGRAPHICAL MIX*

Building products

Steel products

*Consolidated

63%

37%

Export

Domestic

3%

97%

Source: Company

net sales#1 ,168cr

stock price# 520 M-CAP# 809 cr

ROE 0.36%