From Prism to Prison: Why Johnson’s Balance Sheet Needs Rehab

📌 At a Glance

Prism Johnson Ltd is a diversified building materials company with interests in cement, ready-mix concrete (RMC), and TBK (tiles, bathware, and kitchen solutions). Despite a decade in the industry and some serious real estate tailwinds, its profits seem allergic to permanence — with ROCEs flatter than a bathroom tile and net profits playing hide and seek.

1. 🧱 The “Three-Legged” Business Model

a) Cement Division

• Brand: “Champion” cement
• Operates in MP, UP, and Bihar
• FY25 Cement revenue: ~₹4,260 Cr
• EBITDA margin? Cement-ary level: 6–7% average over 3 years

b) TBK (Tiles, Bathware, Kitchen)

• Brand: Johnson Tiles
• Competes with Kajaria, Somany
• FY25 Revenue: ~₹2,000 Cr
• Margins? Even Kajaria won’t feel threatened

c) RMC (Ready-Mix Concrete)

• Used in infra projects, commercial real estate
• FY25 revenue: ₹700–800 Cr
• OPM? Mix thoda zyada dilute ho gaya

🔍 None of the 3 legs are industry-leading. Instead of a tripod, Prism’s standing on a wobbly stool.

2. 💸 The “Other Income” Illusion

• FY25 PBT: ₹5 Cr
• Other Income: ₹293 Cr
• You read that right — other income is 58x operating profit
• Without it, Prism would’ve looked like a real estate developer stuck in 2012

🕵️ Most of this is from asset sales, dividends, and investment income.
Not sustainable. Not core. Not cool.

3. 📊 5-Year Financial Snapshot

🎯 Verdict: Cement demand grew. Infra boomed. Prism… yawned.

4. 🚨 The Red Flags Wall

• ❌ Return on Equity (3Y avg): -6%
• ❌ Return on Capital Employed: 2.3%
• ❌ Operating Margins below 7% in 3 of last 5 years
• ❌ No dividend despite stable PATs (when not negative)
• ❌ ₹1,500 Cr+ in borrowings
• ❌ 5-year sales CAGR: 4%, profit CAGR: negative

Even for a commodity play, this is weak cement.

5. 📈 Share Price: Rock Solid… or Just a Rock?

• Price (June 2025): ₹151
• 5-Year High/Low: ₹246 / ₹105
• 5-Year CAGR: ~27% — thanks to FY24 stock rally
• But fundamentals? Nowhere close to justify 5x book value

🤯 P/E ratio: 126 (No joke. Even a meme stock would blush)

6. 🔎 Fair Value Range (FV 🔍)

Let’s value it like a cement company, not a confused combo-pack.

a) EV/EBITDA Method

• Avg Cement EV/EBITDA (ACC, JK, Dalmia): 11x
• Prism FY25 EBITDA: ₹418 Cr
• Enterprise Value: ₹4,598 Cr
• Less: Net Debt (approx): ₹1,300 Cr
• Fair Market Cap: ~₹3,300 Cr

With 50.3 Cr shares:
👉 Fair Value Range = ₹65–₹75 per share

7. 🎯 TL;DR — Prism Johnson Recap

• 🧱 Multi-product building materials company
• 🧾 Cement biz profitable, but low margins
• 🚽 TBK & RMC remain margin-neutral at best
• 📉 ROCE, ROE, Profit — all unstable or negative
• 💸 Other income props up PAT – not business ops
• 🤷 Currently trading far above fair value on any metric

Prism Johnson is like that real estate brochure – glossy outside, empty flat inside.

🔖 Tags:

Prism Johnson, Cement Stocks, Building Materials India, Johnson Tiles, Prism Cement, Construction Materials, Infra Stocks, Stock Analysis India, Prism Johnson IPO, Prism Johnson 2025

✍️ Written by Prashant | 📅 June 18, 2025