EIC AND TECHNICAL ANALYSIS OF CEMENT INDUSTRY

A Project Report submitted in Partial Fulfillment of the Degree of BBS-Finance

Submitted by: Bhuvnesh Prakash 10067234040 Shaheed Sukhdev College of Business Studies

Certificate

This is to certify that the project report entitled EIC and Technical Analysis is the project work carried out by Bhuvnesh Prakash at Shaheed Sukhdev College of Business Studies for partial fulfillment of BBS-Finance. This report has not been submitted to any other organization for the award & any other Degree /Diploma.
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Name & Signature of Student

Name & Signature of the Supervisor

Signature of the Principal Stamp of the College

Abstract
Indian cement industry has seen a tremendous growth over the years. I have done an EIC and Technical analyses of top ten cement companies as per their net sales. It includes analyses of Indian economy, Industry analyses and company financial statement analyses and SWOT analysis of each company. I have also covered the technical analyses moving crossover average to identify the trends. Indian economy is the tenth largest economy in the world in terms of GDP. The GDP in India has expanded as compared to previous years. India Interest Rate averaged 6.56 Percent reaching an all-time high of 14.50 Percent in August of 2000 and a record low of 4.25 Percent in April of 2009. Inflation rate in India has come down. SWOT analysis of Indian economy includes like India has a stable growth even during recession (2008). The banking and credit system were able to survive. Opportunities will be development in rural areas. Threats may be terrorist.
Cement industry has been growing tremendously over the years. India is the second largest cement market and exporter for 30 companies. Leading players in this sector (by market share) are Shree Chem, 2

UltraTech, Ambuja, Binani, ACC, India Cem, Dalmia Cem, Madras Cem, Lafarge, and OCL India. The cement industry is one of the vital industries for economic development in a country. The total utilization of cement in a year is used as an indicator of economic growth. Company analyses is a very important parameter to analyses the cement industry. The top ten companies has been analyzed by analyzing their profit and loss account, cash flow statement and their related ratios and the trends. ACC cement limited efficiency has improved. The profitability has also improved from 2008 to 2012. Cash flow from operating has reduced of ACC cement limited. It has bullish market trend more in period 2008 to 2012. Ambuja cement has an upward graph of net sales. The net sales are continuously rising from 2008 to 2012. Net cash flow from operating activities are high in 2010 and then it again fall in 2011 and rise in 2012. From 2009 to 2011 there is bullish market trend and a perfect time to buy stock of it. UltraTech cements has a good brand image in the market. There is a 226.71% increase in sales turnover of UltraTech from 2008 to 2012. Net cash from operating activities are continuously rising. The company has declared less dividend in 2012 as compared to previous years. Net sales of India Cement limited keep on fluctuating year by year. It has highest sales turnover in 2008 to 2012 this year. Total income has increase by 138% in 2012 as of in previous years. Net cash from operating activities is highest in 2011 and it came down in 2012. Efficiency has get weaker. Birla Cement is growing very slowly as compared to other companies. It has only 31.81% rise in total income in 2012 as compared to 2008. Expenses has increased by 55.32% Barak Vally cements has performed very outstanding in 2010. It has only 30.42% rise in total income in 2012 as compared to 2008. J.K Cements limited efficiency has improved a lot. It has performed well in 2012 as compared to previous years. Total income increase by 61.67%. Prism cement also perform well in 2012 as of in previous years. Total income rise by 414.52%. In 2009 to 2011 there is bullish market trend and a time to buy. Madras cements total income rise by 61.48%. It has performed better in 2012. 2012 saw a bullish trend and the stock must be bought in this period.

CONTENTS

REFERENCES
1. www.moneycontrol.com 2. www.yahoofinance.com 3. www.tadingeconomics.com 4. www.ibef.com 5. www.acclimited.com 6. www.ultratechcement.com 7. www.ambujacement.com 8. www.prismcement.com 9. www.indiacement.co.in 10. www.jkcement.com 11. www.ramcocement.com 12. www.adityabirla.com 13. www.shreecement.com 14. www.barakcement.com

Acknowledgement
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The satisfaction and joy that accompanies the successful completion of a task is incomplete without mentioning the name of the person who extended her help and support in making it a success.

I am greatly indebted to Dr. Rohini Singh, My Project Guide and Mentor for devoting her valuable time and efforts towards my project. I thank her for being a constant source of knowledge, inspiration and help during this period of making project.

INDIAN ECONOMY ANALYSIS

India is the tenth largest economy in the world in terms of GDP. The Indian Economy due to its peculiar trends has been a subject of interest for the world. After independence, the Indian economy was more like a socialist economy: democratic, large public sectors and heavy regulations on private sectors. Around the 1990s the economy reached a point of stagnation. Then, in 1991, India saw the largest economic reforms pioneered by Dr. Manmohan Singh, the then finance minister. These changes improve the rate of economic growth and social development. Economists predict that the Indian economy will be the third largest by 2025, after the USA and China. Inflation, as measured by the Wholesale Price Index (WPI), has remained above 7per cent since December 2009. Food inflation has been particularly elevated over this period, contributing to an average of one third of total inflation. Consumer price inflation, with higher weights on food, have been generally higher than the headline WPI inflation. A moderation in WPI inflation is now clearly visible, but the moderation has largely been due to deceleration in the rate of inflation of nonfood manufactured products. Inflation pressures have eased globally. Global consumer prices rose at a 3.7 percent annualized rate at the end of 2012. Inflation for developing countries also moderated to a 5.4 percent annualized rate in the three months through November 2012, from an average 7.2 percent in 2011. Benign inflation in global commodity prices, with inflation for energy and nonenergy commodities in base line scenario expected to be around (-) 2.6 per cent and (-) 2.0 per cent respectively in 2013, will check the inflation of tradable commodities even in India. Apart from monetary policy attempting to control demand, supply side responses will be necessary to bring down inflation in a sustained way, and ongoing policy initiatives need to be pursued.

INDIA GDP GROWTH RATE

The Gross Domestic Product (GDP) in India expanded 1.30 percent in the fourth quarter of 2012 over the previous quarter. GDP Growth Rate in India is reported by the OECD. Historically, from 1996 until 2012, India GDP Growth Rate averaged 1.63 Percent reaching an all-time high of 5.80 Percent in December of 2003 and a record low of -1.70 Percent in March of 2009. In India, the growth rate in GDP measures the change in the seasonally adjusted value of the goods and services produced by the Indian economy during the quarter. India is the worlds tenth largest economy and the second most populous. The most important and the 6

fastest growing sector of Indian economy are services. Trade, hotels, transport and communication; financing, insurance, real estate and business services and community, social and personal services account for more than 60 percent of GDP. Agriculture, forestry and fishing constitute around 12 percent of the output, but employs more than 50 percent of the labor force. Manufacturing accounts for 15 percent of GDP, construction for another 8 percent and mining, quarrying, electricity, gas and water supply for the remaining 5 percent.

INDIA INTEREST RATE

The benchmark interest rate in India was last recorded at 7.50 percent. Interest Rate in India is reported by the Reserve Bank of India. Historically, from 2000 until 2013, India Interest Rate averaged 6.56 Percent reaching an all-time high of 14.50 Percent in August of 2000 and a record low of 4.25 Percent in April of 2009. In India, interest rate decisions are taken by the Reserve Bank of India's Central Board of Directors. The official interest rate is the benchmark repurchase rate.

INDIA INFLATION RATE

The inflation rate in India was recorded at 6.84 percent in February of 2013. Inflation Rate in India is reported by the Ministry of Commerce and Industry. Historically, from 1969 until 2013, India Inflation Rate averaged 7.74 Percent reaching an all-time high of 34.68 Percent in September of 1974 and a record low of -11.31 Percent in May of 1976. In India, the wholesale price index (WPI) is the main measure of inflation. The WPI measures the price of a representative basket of wholesale goods. In India, wholesale price index is divided into three groups: Primary Articles (20.1 percent of total weight), Fuel and Power (14.9 percent) and Manufactured Products (65 percent). Food Articles from the Primary Articles Group account for 14.3 percent of the total weight. The most important components of the Manufactured Products Group are Chemicals and Chemical products (12 percent of the total weight); Basic Metals, Alloys and Metal Products (10.8 percent); Machinery and Machine Tools (8.9 percent); Textiles (7.3 percent) and Transport, Equipment and Parts (5.2 percent).

SWOT Analysis of Indian Economy

Strength: The strength of the Indian economy lies in its robust nature, which is evident from its constant growth even during times of recession (2008-09). The banking and credit system has been able to survive the downturn due to heavy regulations imposed by the RBI. This brought more transparency to the system. Another important factor that forms the spine of the Indian economy is agriculture, because it employs nearly 50% of the total population. Although agriculture shares only 18.5% of GDP, it makes India self-reliant in terms of food supply. Today, India is a leading producer of a number of agricultural products that give a boost to the export value. The youth of India, which makes a large part of the population is an advantage as it constitutes a huge work force. Weaknesses: Primary weakness of the Indian economy is its excessive dependence on agriculture. Since agriculture is monsoon dependent trade, production can vary by large margins and cause turbulence in the economy. India also lags behind in social development. A large part of the population is still living below the poverty line. Another weakness is the literacy rate. Although we have achieved high progress rates in terms of GDP, more than a third of the population remains illiterate, thus, easily exploitable. Opportunities: India has ample opportunities for growth. The agriculture sector and SMEs need to be encouraged and assisted as they have high potential. Indian government should focus on defining and properly implementing the policies for rural development, as most of the population resides in rural India. Also, there is a scope for large-scale infrastructure development and a need to properly carry out the MNREGA, JNNURM and other schemes, so that the benefits penetrate to the lower level of the population. Tourism is a thriving industry in India and we need to harness its potential. It will help raise our foreign reserves and create employment opportunities. Threats: Terrorism and corruption are the greatest threats that India faces. It is because both hamper the growth of people and trade, which is a must for overall economic growth. The rising inflation, hording and black-marketing, also pose a threat to economic development. Economic growth, mainly the exports, has seen a downward trend due to the worldwide economic downturn and has become a cause of concern. The Indian government needs to redefine its policies and bring more stringent reforms to steer out of this turbulence.

INDUSTRY ANALYSIS

Responsible for 7-8 percent of global cement production, India is the second largest cement market in the world, and also an exporter to 30 countries. The cement industry in India is divided into five geographical segments, wherein the North and South regions are the leading suppliers of cement. The East, West and Central regions face deficit of cement, thereby relying on purchases from the North and South. According to the Cement Manufacturers Association (CMA), there are 139 large cement plants and 365 mini and white cement plants in the country.

Overview
According to the Cement Manufacturers Association (CMA), cement sales for May 2012 were registered at 16.26 million Tonnes (MT), which signifies a 14 percent growth over the same period in 2011. Although India is one of the largest cement markets in the world, its per capita consumption is only around 170 kg, much lower than the global average consumption of about 430 kg. According to the latest report from the working group on the industry for the 12th five-year Plan (2012-17), India would require overall cement capacity of around 480 million Tonnes. This would mean the industry will have to add another 150 million Tonnes of capacity during the period. Leading players in this sector (by market share) are Shree Cem, UltraTech, Ambuja, Binani, ACC, India Cem, Dalmia Cem, Madras Cem, Lafarge, and OCL India. Factors that will drive growth in this sector Housing segment growth is leading to higher demand for cement for homebuilding. Governments 12th Five Year Plan focuses on increasing infrastructure (upgraded airports, ports, railway expansion, etc.) to drive construction activity. Rise in commercial and retail spaces, along with hotels in near future, will account for increased demand for cement.

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Use of alternate fuels will help reduce low production costs and emissions and further drive this sector. There is an increase in the sale of blended varieties of cement - Portland Pozzolana Cement (PPC) and Portland Blast Furnace Slag Cement (PBFC)

Road ahead Though cement is the most preferred construction material in both housing and industrial works, its demand is directly linked to the development and growth of others industry domains, such as construction, infrastructure, finance, etc. The housing segment that accounts for a major portion of domestic demand for cement in India is expected to witness a demand of 4.3 million housing units between 2010 and 2014. Government initiatives to boost infrastructure development and ease transportation costs should keep the demand for cement on a consistent rise. Furthermore, there are unexplored markets in the country, like the under-supplied North-east region, that are currently experiencing increasing demand for cement. The cement industry is one of the vital industries for economic development in a country. The total utilization of cement in a year is used as an indicator of economic growth.

Cement is a necessary constituent of infrastructure development and a key raw material for the construction industry, especially in the governments infrastructure development plans in the context of the nations socio-Economic development.

SWOT ANALYSIS of Cement industry

Strengths: 1. The industry is likely to maintain its growth momentum

and continue growing at about 9 10% in the foreseeable future. 2. Government initiative in the infrastructure sector such as the commencement of the second phase of the National Highway Development project, freight carriers, rural roads and development of the housing sector (Bharat Nirman Yojana) are likely to be the main drivers of growth. 3. In the coming few years the demand for the cement will increase which will be booming news for cement manufactures. As capacity utilization is over 90% now. 4. Huge potential for export.

Weakness: 1. Cement Industry is highly fragmented & regionalized. 11

2. Low value commodity makes transportation over long distances un-economical. 3. High capital cost and investment cost for each and every project. 4. The complex Excise Duty structure based on the category of buyer and end use of the

cement has caused a lot of confusion in the industry.

5. The recent ban on export of cement clinker would increase the availability of cement in

the domestic market, which in turn would put pressure on cement prices. Opportunities
1. Substantially low per capita cement consumption as compared to developing countries

(1/3rd of world average) Per capita cement consumption in India is 82 kgs against a global average of 255 kgs and Asian average of 200 kgs.
2. Despite slightly lower economic growth, the construction and infrastructure sector is

expected to record healthy growth, which augurs well for cement industry.
3. Additional capacity of 20 million tons per annum will be required to match the demand.

Threats: -

1. The recent moves by the Central Government in making the import of the cement total

duty free, is a cause of worry for the Indian cement industry.

2. Further recent changes in the Central Excise Duty structure by way of introduction of

multiple slabs of Excise Duty is also a cause of worry for the industry.
3. Almost all the major players in the industry have announced substantial increase in the

capacity and the possibility of oversupply situation cannot be ruled out.

4. Increased railway freight, coal prices and dispatch bottlenecks on account of truck

Loading restrictions imposed by various State Governments

5.

Scarcity of good quality Coal is some other factors which are cause of concern for the industry.

ECONOMIC OVERVIEW
Against the backdrop of the Eurozone crisis, turmoil in West Asia and spike in crude prices, the fiscal year 2011-12 was a year of "recovery interrupted" for the Indian economy. India's GDP growth is estimated at 6.9% in 2011-12 - a sharp fall from 8.4% in the last year. While the estimated growth of 6.9% in the fiscal year 2011-12 can be considered reasonably
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healthy in view of the adverse global developments mentioned above, it would be unwise to ignore the fact that domestic factors like high inflation, depressed investment climate and unaddressed manufacturing bottlenecks also slowed down industrial activity. India's slowdown in 2011-12 can be attributed almost entirely too weak industrial growth with the good performance of the services and agricultural sectors. In 2011-12 the growth is estimated to be 2.5% in agriculture, 3.9% in industry and 9.4% in services. INDUSTRIAL OUTPUT Industrial growth however witnessed a sharp fall to 4.1% in February 2012 as against 6.7% growth in the corresponding month of the previous fiscal. The disappointing growth was mainly due to rather poor performance of the manufacturing sector especially consumer goods. As per the revised IIP data, the industrial production grew only by a marginal 1.1% during the year under review that too driven by the 4.1% growth in February 2012. The marginal uptrend in the growth towards the end of the year was witnessed due to increase in the consumption of processed foods in the food and beverages sector. EXPORTS / IMPORTS Owing to buoyant demand from diversified overseas markets, exports, according to provisional figures released by the Industry, Chemicals & Textiles Ministry, exceeded the targeted US$ 300 billion for the fiscal year 2011-12. The sectors that posted impressive growth included engineering, gems & jewelry, textiles and pharmaceuticals. Imports during 2011-12 clocked a high of US$ 485 billion mainly on account of rising global oil prices with oil imports touching US$ 150 billion. The trade deficit widened to US$ 185 billion and the Government faces a stiff challenge to keep it under control in the current fiscal. During the period April-December 2011, the Current Account Deficit (CAD) - an indication of the gap between foreign exchange inflows and outflows, surged to US$ 53.7 billion (4% of the GDP) from 3.30% of GDP in the same period last year - reflecting higher trade deficit on account of imports of petrol, oil, lubricants, gold and silver. INFLATION Inflation which had raged at double digit levels over the last two years is now lower. The decline in inflation has provided some relief and the time is ripe therefore to boost investment in the economy. The Prime Minister's Economic Advisory Council has opined that inflation would drop further and hover around 5% to 6% in the current fiscal 2012-13. INDUSTRY SCENARIO Demand for cement in the country improved during the current year under review, registering a 6.60% growth better than 4.70% registered in the previous year. Given the long term nature of business and also since it takes, of late, 24-30 months to set up capacity, Industry created capacity much ahead of demand and this led to lower capacity utilization - more so in South, where substantial capacity came into play - Capacity utilization in South was 63% as against All India Capacity utilization of 75%. It is expected that capacity utilization will improve steadily in line with growth in demand in the coming years. Demand growth was healthy in regions where Infrastructure and Housing activities were brisk on the back of progressive policy of State Government. Western region registered significant growth of 13.80% followed by North of 11%, Central of 9.30% and East of 2.90%. However, in Southern region, growth was flat primarily due to lack of infra and housing projects in Andhra Pradesh and Karnataka. It is heartening to note that during January - March '12 quarter, demand has grown sharply at 10% as opposed to 5.60% in the preceding 9 months. South has shown a remarkable growth of 9.40% as compared to negative growth of 3% in the preceding three quarters.
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Southern cement industry which has the highest capacity in the country, have been striving hard to access Northern & Eastern markets in the interest of improving the capacity utilization, but is constrained due to Rail Rakes availability. Given that supply-demand imbalance in South is relatively higher, it is expected that demand will catch up with supply by 2014-15. With a pronounced GDP growth of around 7.50% next year, the industry can expect a reasonable growth rate of 8% - 9% in the coming years which should enable the industry to operate at around 80% of its capacity. In addition to the supply overhang, the industry had also to bear the substantial cost push in the form of increase in the price of coal, diesel price revision, increase in the Sales Tax on cement by 2% in Tamil Nadu, heavy depreciation of Rupee against Dollar of more than 13% from Rs.45 to Rs.51 impacting coal prices, revision in power tariff in Andhra Pradesh and continued power cut and load shedding in the States of Tamil Nadu and Andhra Pradesh necessitating usage of high cost DG and purchased power. In addition, the Union Budget 2012 proposes to increase the Excise Duty from 10% to 12% and steep increase in railway freight on inward and outward movement of materials ranging from 20% to 30% and a steep 35% increase in power tariff in Tamil Nadu from 1/4/2012. Given all these adverse factors your Company's main challenge during the year under review was to manage volumes and cost of production on the one hand and optimize selling prices on the other to improve the bottom line. The overall production was impacted due to the negative / practically nil growth in the markets served by the Company's plants. The Andhra Pradesh markets witnessed a further drop of around 8% in demand over and above the 17% negative growth recorded in the previous year and with the bunch of new capacities arising in that region, the severe competition for market space resulted in the lower capacity utilization of the Andhra Pradesh plants including that of your Company. Towards the end of the year the power scenario further worsened in both Tamil Nadu and Andhra Pradesh resulting in power holidays besides zero power during peak hours which curtailed the availability of clinker despite higher generation through captive power sets. The situation is likely to improve as the 48 MW power plant at Sankarnagar has since been commissioned and is expected to go on full stream during the financial year 2012-13. Towards the close of the financial year your Company has commissioned railway sidings at its two grinding units at Chennai and Parli and the consequent reduction in the transportation cost of clinker by rail (instead of road as hitherto) will have its full impact during FY 13. The depreciation in the value of Rupee and increase in the ocean freights coupled with the volatility in the FOB price of imported coal resulted in higher cost of fuel. The expanded capacity of Chilamakur Cement Plant and the second line at Malkapur has stabilized and it is expected that the overall operating efficiencies would improve further with the stabilized run of these plants. ENERGY EFFICIENCY AND COST REDUCTION Despite the lower capacity utilization caused by lower demand in the market, sustained efforts made by your company resulted in marginal reduction in power consumption per Ton of cement and maintaining the fuel consumption/ Ton of clinker on par with the previous year. The ever increasing cost of fuel and increase in power tariff by State Electricity Boards imposed additional burden which could however be controlled through fuller utilization of the power from the Company's gas based power plant at Ramanathapuram and also from the low cost power availed from Andhra Pradesh Gas Power Corporation Limited (APGPCL) in Andhra Pradesh. The Company also utilized the wind power generated by its wind farms of a total of 279 Lakh Units (315 Lakh units) and power from its Waste Heat Recovery System at Vishnupuram which accounted for 539 Lakh units (475 Lakh units). Towards the end of the last quarter the Company's captive power plant of 48 MW at Sankarnagar has been commissioned.

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DEVELOPMENT ACTIVITIES During the year, your Company obtained ISO 9001 certification for quality assurance for its Sankari Plant in addition to its already certified plants at Sankarnagar, Dalavoi, Chilamakur and Vishnupuram. The ISO certification for its Yerraguntla Cement Plant is in progress. Your Company has also implemented Total Productive Management (TPM) for productivity improvement in its plants at Sankarnagar, Dalavoi, Chilamakur, Yerraguntla, Vishnupuram and Malkapur. CLEAN DEVELOPMENT MECHANISM (CDM) Waste Heat Recovery System at Vishnupuram continues to earn certified emission reductions as a CDM project. OPPORTUNITIES, THREATS, RISKS AND CONCERNS The demand supply mismatch arising out of burst of new capacity additions (and not majorly out of lack of normal demand growth) has constricted the capacity utilization levels of the industry for the last two years in particular. Given the resilient nature of the economy, India has been able to achieve reasonable GDP growth of 6.9% in FY 12 which is expected to increase to 7.5% to 8% in FY 13 is expected to translate into a demand growth of 8% to 10% over the next few years. While demand for cement grew by 6.6% in FY 12, there are already encouraging signs of a pick-up in demand with demand spurting by over 10% in the last quarter of FY 12. It is therefore expected capacity utilization to gradually increase over the next 3 years with parity between supply and demand being restored by then. While this being the overall scenario, there are still pockets of high demand growth in certain regions of the country and your Company is already moving significant quantities of cement to the Eastern markets as far as Assam & Nepal to optimize capacity utilization, given the overall surplus. Your Company's attempts in the short run will be towards striking an optimum balance between volumes and profitability and achieve best results. The availability of power from the State Electricity Boards is another area of concern with acute shortages in power availability in Tamil Nadu and Andhra Pradesh. Your Company has already addressed this concern by putting a 48 MW thermal power plant at Sankarnagar to take care of the full requirements of power of all the cement plants and grinding unit in Tamil Nadu and this power plant has been commissioned towards the end of FY 12 and has started supplying power. Work has already been commenced on the installation of 48 MW thermal power plant at Vishnupuram which is expected to be commissioned towards the end of FY 13 and will thereafter fully meet the power requirements of the cement plants in Andhra Pradesh. With its share of power available from the gas based power plants of APGPCL and Coromandel Electric Company Limited, Company's own windmills, diesel generating sets, waste heat recovery system at Vishnupuram, the Company has ensured that it will be fully self-sufficient in meeting its power requirements. Availability of indigenous coal from the nationalized coal companies and the quality of supplies is another area of concern. This problem has however been mitigated to a large extent due to the coal linkages obtained during the last two years to cater to the requirements of the recent capacity expansions in Andhra Pradesh. The Company imports coal to meet its cement plants' requirements thereby adequately addressing the quantity, quality and cost aspects. Mining rights obtained in Indonesia should fructify with infrastructure of roads and bridges under completion to ensure timely coal supplies. The ever rising cost of energy in the form of petroleum products will also have its impact on the power and transportation costs, which it is hoped to be neutralized by increasing the selling prices.
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OUTLOOK The Prime Minister's Economic Advisory Council (PMEAC) has projected a 7.5% to 8% growth for the fiscal year 2012-13. Economic experts are banking on the domestic market to sustain growth through a Government led initiative to boost private sector infrastructure investments. With industrial growth exhibiting signs of a revival and given the Government's intention to boost agriculture development and give a fillip to infrastructural growth, the clocking of a GDP growth of 7.5% in 2012-13 could well be achievable. Both the Central and State Governments have plans to boost investments in housing for the lower income groups which could help drive cement demand together with proposed investments on roads and other infrastructural projects. The recent proposals of the Reserve Bank of India in its Credit Policy to reduce Repo and Reverse Repo rates by 50 basis points is expected to soften housing loan interest rates thereby giving a fillip to demand for housing for the middle income sector. Given all these positive factors, it is reasonably expected an 8% to 10% annual growth in cement demand over the next few years and an early restoration of parity between cement demand and supply which should augur well for the cement industry.

COMPANY ANALYSIS

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The top ten companies as per their net sales are considered for company analysis.
1. ACC Limited 2. Ultra Tech 3. Birla cements 4. J.K Cements limited 5. Ambuja cements 6. India cements limited 7. Prism cements 8. Madras cements 9. Shree cements limited 10. Barak Vally cements

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ACC LIMITED

ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations are spread throughout the country with 17 modern cement factories, more than 40 Ready mix concrete plants, 21 sales offices, and several zonal offices. It has a workforce of about 9,000 persons and a countrywide distribution network of over 9,000 dealers. Since inception in 1936, the company has been a trendsetter and important benchmark for the cement industry in many areas of cement and concrete technology. ACC has a unique track record of innovative research, product development and specialized consultancy services. The company's various manufacturing units are backed by a central technology support services center - the only one of its kind in the Indian cement industry. ACC has rich experience in mining, being the largest user of limestone. As the largest cement producer in India, it is one of the biggest customers of the domestic coal industry, of Indian Railways, and a considerable user of the countrys road transport network services for inward and outward movement of materials and products. Among the first companies in India to include commitment to environmental protection as one of its corporate objectives, the company installed sophisticated pollution control equipment as far back as 1966, long before pollution control laws came into existence. Today each of its cement plants has state-of-the art pollution control equipment and devices. ACC plants, mines and townships visibly demonstrate successful endeavors in quarry rehabilitation, water management techniques and greening activities. The company actively promotes the use of alternative fuels and raw materials and offers total solutions for waste management including testing, suggestions for reuse, recycling and co-processing. ACC has taken purposeful steps in knowledge building. We run two institutes that offer professional technical courses for engineering graduates and diploma holders which are relevant to manufacturing sectors such as cement. The main beneficiaries are youth from remote and backward areas of the country. ACC has made significant contributions to the nation building process by way of quality products, services and sharing expertise. Its commitment to sustainable development, its high ethical standards in business dealings and its on-going efforts in community welfare programmes have won it acclaim as a responsible corporate citizen. ACCs brand name is synonymous with cement and enjoys a high level of equity in the Indian market. It is the only cement company that figures in the list of Consumer Super Brands of India. ACC manufactures the following types of cement, in addition to which, it provides Bulk Cement and Ready Mix Concrete. Ordinary Portland Cements and Blended Cements.
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VISION OF ACC LIMITED

SWOT ANALYSIS OF ACC LIMITED

STRENGTHS. 1. It is having a good image and brand loyalty among consumers. 2. Service is good 3. They have same price prevailing for wholesale at dealers/stockiest retailers end. WEAKNESS. 1. The competitors are doing much promotional activity rather than ACC Limited that is why it facing more problems in selling of product in the market. 2. Lack of awareness program for consumers. OPPORTUNITY. 1. Rapid growth is taking place in Bihar and Madhya Pradesh. 2. People are opting for more stable structures and intensive use of cement is taking place, even government is spending heavily on infrastructure projects. Thus, this is the right time to fully tap these markets. 3. As Indian core industry is also growing at rate of nearly 10% per annum, it is having a good future. 4. Foreign direct investment in infrastructure sector going to increase in coming years, which will increase the demand of cement. 5. Roads are undergoing through the transformation process through which the traditional method of road building will be replaced by modern concrete roads. THREATS: 1. Large number of players in cement industry makes it more competitive for ACC to carefully price its product and at the same time satisfy its dealers and customers. 2. Players such as Jaypee Cement, Prism Cement, and Birla Samrat are eating up considerable market share. 3. Due to Indias exponential growth many new international cement companies are expected in coming years which will bring a tide of change and can start price war.
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4. The emergence of small players in this market may increase the competition and start the

malpractices, and heavy discounts to retailers. They can also influence many retailers by giving better profit margin, and other Benefits.

Profit and loss account of ACC Limited (2008 to 2012)

Profit & Loss account of ACC ------------------- in Rs. Cr. -------------------

Dec '12 Dec '11 Dec '10 Dec '09 Dec '08 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 12,639.44 1,281.48 11,357.96 -70.56 -20.02 11,267.38 2,178.83 2,382.26 616.65 424.64 2,233.36 1,306.62 0.00 9,142.36 12 mths 10,491.93 1,143.67 9,348.26 289.72 94.39 9,732.37 1,955.95 2,183.19 525.69 522.14 2,069.77 463.69 0.00 7,720.43 12 mths 8,609.29 961.52 7,647.77 169.99 56.58 7,874.34 1,520.68 1,598.67 461.89 538.24 1,632.90 313.33 0.00 6,065.71 12 mths 8,803.17 781.58 8,021.59 137.40 28.74 8,187.73 1,233.42 1,539.65 367.71 421.69 1,658.79 262.72 0.00 5,483.98 12 mths 8,300.18 1,070.21 7,229.97 252.84 0.33 7,483.14 1,180.48 1,598.96 413.04 362.90 1,620.65 270.99 0.00 5,447.02

Interpretations: Particulars 2008 2012 Absolut e change Percentage (Increase decrease) 52.2791072 19.74098541 57.09553428 -127.9069767 -6166.666667 change or

Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments

8,300.1 8 1,070.2 1 7,229.9 7 252.84 0.33

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12,639.44 4,339.26 1,281.48 211.27

11,357.96 4,127.99 -70.56 -20.02 -323.40 -20.35

Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

7,483.1 4

11,267.38 3,784.24

50.57021518

1,180.4 8 1,598.9 6 413.04 362.9 1,620.6 5 270.99 0 5,447.0 2

2,178.83 2,382.26 616.65 424.64 2,233.36 1,306.62 0 9,142.36

998.35 783.30 203.61 61.74 612.71 1,035.63 0.00 3,695.34

84.57153022 48.98809226 49.29546775 17.01295123 37.80643569 382.1653936

67.84149865

Sales turnover has increased by 52.29% from 2008 to 2012. It has steady growth from 2008 to 2010. Net Sales has got raise by 57% from 2008 to 2012. Total income increase by 50.57% from 2008 to 2012. In spite of increase in Total income, total expenses also increases by 67.84% Change in Total expenses > Change in total expenses. 20.92 7.79 19.85 0.14 19.88 13.74 18.79 0.67 15.37 15.72 17.37 0.69 16.32 9.83 19.05 0.99

Profit & Loss Account Ratios Material Cost Composition 19.18 Imported Composition of Raw Materials 10.32 Consumed Selling Distribution Cost Composition 19.66 Expenses as Composition of Total Sales--

21

Cash Flow of ACC

------------------- in Rs. Cr. -------------------

Dec '12 Dec '11 Dec '10 Dec '09 Dec '08 12 mths Net Profit Before Tax 1451.49 Net Cash From Operating Activities 1577.00 Net Cash (used in)/from -310.65 Investing Activities Net Cash (used in)/from Financing -1066.02 Activities Net (decrease)/increase In Cash and 200.33 Cash Equivalents Opening Cash & Cash Equivalents 2834.72 Closing Cash & Cash Equivalents 3035.05 12 mths 1540.42 1571.38 -264.24 -768.32 544.82 2287.59 2832.41 12 mths 1461.45 1935.72 -802.25 -636.73 511.74 1875.85 2387.59 12 mths 2294.39 2397.94 -2181.22 -454.58 -237.86 984.24 746.38 12 mths 1687.74 1708.33 -1170.44 -297.13 240.76 743.48 984.24

Interpretations:

22

 Net cash from operations has shown an upward trend from 2008 to 2009 and then

downward from 2009 to 2012. It has a high peak at 2009. It may be because company has a Profit on sale of its asset of 3.24 crore and company has less interest dividend.

NET CASH GENERATED FROM INVESTING ACTIVITIES

Cash generated from investing activities has a negative flow. It has more outflow than

inflows.

Net Cash generated from financing activities

It can be noticed from the graph that negative cash flow is decreasing and getting improving

from 2008 to 2012.

23

Net (decrease)/increase In Cash and Cash Equivalents

It can be noticed from the graph that the net decrease in cash is negative in 2011 in last five

years. The Reason for such net decrease are as follows:

1. Increase in Raw material consumption 2. Decrease in operating income 3. Significant Increase in coal prices by 23% 4. Increase in Power tariff by 21%

Profitability Ratios Operating Profit Margin (%)

2008 19.33 18.42 12.97 13.33 15.03 15.03 13.78 13.78 19.60 18.42 13.48 383.09 383.09 19.60

2009

2010 21.42 15.86 16.29 17.36 17.36 14.26 14.26 20.75 17.31 15.00 344.59 344.59 20.78

2011 31.95 27.22 27.68 23.61 23.61 19.69 19.69 35.80 26.70 26.32 320.45 320.45 35.80

2012 24.66 20.01 20.59 19.22 19.22 16.29 16.29 31.43 24.61 23.05 262.56 262.56 31.43

Profit Before Interest And Tax Margin 14.08 (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Revaluations Return on Revaluations Assets Assets 14.41 17.04 17.04 9.13 9.13 25.46 14.37 19.25

Excluding 393.2 3 Including 393.2 3 25.46

Return on Long Term Funds (%)

24

Interpretations: Gross profit Margin has both upward and downward trends. A high margin shows low cost of goods sold. In 2012 the gross profit margin has decrease by 7.09 crore because of increase in COGS.
1.

Return to capital employed has been decreasing from 2008 to 2010 and then a highest peak at 2011 but then face a sudden decline in 2012 which state that the overall performance of it is not stable.
2.

The overall profitability ratio shows that the profit of an organization is not stable it keep on fluctuating may be because of changes in price of raw material and change in investment patterns.
3.

Liquidity and Solvency Ratios Current Ratio 0.72 0.87 Quick Ratio 0.46 0.58 Debt Equity Ratio 0.01 0.07 Long Term Debt Equity Ratio 0.01 0.07 Debt Coverage Ratios Interest Cover 16.59 15.58 Total Debt to Owners Fund 0.01 0.07 Financial Charges Coverage Ratio 21.46 20.49 Financial Charges Coverage Ratio Post 15.13 19.58 Tax Management Efficiency Ratios Inventory Turnover Ratio 11.15 18.59 Debtors Turnover Ratio 40.29 42.62 Investments Turnover Ratio 11.15 18.59 Fixed Assets Turnover Ratio 1.12 0.97 Total Assets Turnover Ratio 1.53 1.22 Asset Turnover Ratio 1.50 1.27 Interpretation:
1.

0.68 0.43 0.08 0.08 25.57 0.08 32.48 27.64 19.04 40.04 19.04 0.96 1.11 1.13

0.67 0.42 0.09 0.09 27.96 0.09 32.02 24.12 25.22 31.22 25.22 1.19 1.23 1.34

0.89 0.61 0.10 0.10 42.56 0.10 49.92 38.71 27.51 24.12 27.51 1.25 1.35 1.25

The ideal ratio is 2:1. The current ratio has increased in 2012 in comparison to 2012, it shows the idealness of funds is increasing. The reason may be the current asset as current investment and inventory are high in 2012 as in 2011. The lower the Debt equity ratio higher the degree of protection enjoyed by lenders. The ratio has increased to a great extent which shows that the degree of protection has been affected. The debt by the firm has raise. The interest coverage ratio has been raising continuously every year which means firm is getting financially strong and are in a position to pay interest.

2.

3.

25

4.The debtor turnover ratio is high in 2008 and 2009 which means firm is able to manage its debtor but it decline in 2012 we can say that the efficiency of management of debtors of the firm is growing low in comparison to the previous years. 5. The efficiency of the organization has also got improved a lot because of higher growth rate, increase in net sale, and increase in an investment.

Technical Analysis A crossover is the most basic type of signal and is favored among many traders because it removes all emotion. The most basic type of crossover is when the price of an asset moves from one side of a moving average and closes on the other. Price crossovers are used by traders to identify shifts in momentum and can be used as a basic entry or exit strategy. A cross below a moving average can signal the beginning of a downtrend and would likely be used by traders as a signal to close out any existing long positions. Conversely, a close above a moving average from below may suggest the beginning of a new uptrend. The second type of crossover occurs when a short-term average crosses through a long-term average. This signal is used by traders to identify that momentum is shifting in one direction and that a strong move is likely approaching. A buy signal is generated when the short-term average crosses above the long-term average, while a sell signal is triggered by a short-term average crossing below a long-term average.

Moving average crossover of ACC Limited

26

1. In the early 2008 there is a bearish crossing trend till mid-2009. 2. In mid-2009 bearish crossing reversed and there is a bullish crossing, a time to buy

and continue till end-2010.

3. In end-2011 there is a bearish trend exits for small period of time. 4. A bullish trend exits after this till 2012 end and a perfect time to buy it.

AMBUJA CEMENT

Ambuja Cements Ltd. (ACL) is one of the leading cement manufacturing companies in India and commenced cement production in 1986. Initially called Gujarat Ambuja Cements Ltd, the Company later became Ambuja Cements Ltd. In 2006, global cement major Holcim, acquired management Control of the Company. Today, Holcim holds a little over 50% equity in ACL. ACL has grown manifold over the past decade. Its current cement capacity is 27.25 million Tonnes. The Company has 5 integrated cement manufacturing plants and 8 cement grinding units across the country. ACL enjoys a reputation of being one of the most efficient cement manufacturers in the world. Its environment protection measures are considered to be on par with the finest in the country. It is also one of the most profitable and innovative cement companies in India. ACL is the first Indian cement manufacturer to build a captive port with three terminals along the country's western coastline to facilitate timely, cost effective and environmentally cleaner Shipments of bulk cement to its customers. The Company has its own fleet of ships. ACL has also pioneered the development of the multiple, bio-mass, co-fired technology for generating greener power in its captive plants.
27

SWOT ANALYSIS of Ambuja Cement

Strengths Third largest cement producer in India. Lowest cost cement producer in India as well as in world AMBUJA cement profit is highest and most deleveraged balance sheet in industry. Logistic management Market leader in northern India as AMBUJA BRAND. Presence in prime market Pioneer in sea transport

First cement company to receive the ISO 9002 quality certification & the only to be awarded, the National Quality Award
28

well diversified fuel mix and efficient operation. Largest cement exporter in India.

Geographically positioned, which gives flexibility to choose both domestic as well as export market. No#1 in northern and no #2 in western market.

It has strong presence in high growth market like west, east, north, which does not suffer from oversupply. It has extensive dealership network of 7000 dealers and 25000 retailers network. Captive logistic and transport management for efficient delivery and optimal cost.

Weaknesses Its cyclical industry High transport cost. Highly regionalized and localized market. Limited presence in southern market. Capacity constraints to limit sales. Lack of timely capacity addition to restrict sales. Dependent on govt. for license of mines. High excise duty creates cost high. Levy of royalty over and above the technical services fees.

Opportunities Huge govt. expenditure in infrastructure development to boosts the cement demand high. Low cost housing loan increased the real estate and individual housing also. rising population works as a catalyst for housing boom.

29

as per govt. budget, tax free income increased to Rs. 200000/- which create saving and boost up the housing. Low per capita consumption as 176kg whereas 256kg on developed country. Long term growth for cement industries are favorable and it may grow at the rate of 7% to 8% Threats

Rising input cost of material like limestone, gypsum, and mart. Due to high duty and high mining cost. Gypsum are imported, due to low quality of gypsum in India, which impact on price of production by paying the import duty. Rising cost of logistics. Rising cost of power. Shortage of fly ash. Currency risk Increasing diesel price are another threat which increase the transportation cost, which may create a material effect in freight and forwarding cost. Penalty threats of cartel by competition commission of India. New entrant threats due to high potential market.

30

PROFIT AND LOSS ACCOUNT OF AMBUJA CEMENT (2008 to 2012)

------------------- in Rs. Cr. ------------------Dec '12 Dec '11 Dec '10 Dec '09 Dec '08

12 mths

12 mths

12 mths

12 mths

12 mths

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 1,337.38 2,329.07 478.51 136.40 2,275.85 907.66 -6.71 7,458.16 1,652.18 2,006.34 425.46 254.06 1,865.09 256.20 -6.74 6,452.59 1,475.20 1,697.34 344.91 227.03 1,633.14 199.42 -11.36 5,565.68 1,642.09 1,422.75 274.29 161.66 1,426.15 202.19 -19.33 5,109.80 1,251.08 1,325.69 266.94 145.61 1,276.80 215.64 -21.19 4,460.57 10,995.04 9,601.42 1,264.74 9,730.30 69.74 200.83 1,128.28 8,473.14 234.38 -57.00 8,286.20 914.68 7,371.52 214.58 54.28 7,640.38 7,763.93 680.72 7,083.21 180.41 -49.44 7,214.18 7,089.89 907.80 6,182.09 468.18 62.62 6,712.89

10,000.87 8,650.52

Interpretations: Income Sales Turnover 2008 2012 10,995.0 7,089.89 4 Absolute change 3,905.15
31

Percent(increase decrease) 55.08054

or

Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturin g Expenses Selling and Admin Expenses Miscellaneou s Expenses Preoperative Exp Capitalised Total Expenses

907.8 468.18 62.62

1,264.74 69.74 200.83

6,182.09 9,730.30

356.94 3,548.21 -398.44 138.21 3,287.98 86.30 1,003.38 211.57

39.31923 57.39499 -85.104 220.7122 48.9801 6.89804 75.68738 79.25751

10,000.8 6,712.89 7 1,251.08 1,337.38 1,325.69 2,329.07 266.94 145.61 478.51 136.4

-9.21 1,276.80 2,275.85 999.05 215.64 -21.19 907.66 -6.71 14.48 4,460.57 7,458.16 2,997.59 692.02

-6.32512

78.2464 320.9145

-68.3341 67.20195

1. In the span of five years the sales turnover has increased by 55.08% 2. There is an upward trend in net sales. The firm is continuously rising and it has not

shown any downward trend.

3. Raw material expenses is lower than in 2012 as compared to 2011 on other side net

sales is increasing and other expenses are also increasing.

Profit & Loss Account Ratios 2009 Material Cost Composition 13.74 19.49 Imported Composition of Raw Materials 14.46 12.18 Consumed
32

2010 20.01 9.16

2011 23.18 31.66

2012 20.23 8.41

Selling Distribution Cost Composition 23.38 19.85 Expenses as Composition of Total Sales0.33 0.94

20.25 1.33

18.58 2.60

19.20 3.69

Total income of Ambuja Cement Year 2008 2009 2010 2011 2012 Total income 6,712.89 7,214.18 7,640.38 8,650.52 10,000.87

There is an upward trend in a total income. It is continuously rising from 2008 to 2012. The demand has risen and to meet that the firm has increase its investment nearly by 70%.

Total expenses Year 2008 2009 2010 2011 2012 Total Expenses 4,460.57 5,109.80 5,565.68 6,452.59 7,458.16

33

Year 2008 2009 2010 2011 2012

Total liabilities 5,961.54 6,636.60 7,395.13 8,118.80 8,839.69

Percent increase decrease 675.06 758.53 723.67 720.89

or

11.323 58 11.429 5 9.7857 64 8.8792 68

1. Total liabilities has increased but the percent change in the liabilities has decreased as

compared to previous years. In 2012 percent increase is nearly 8.89% but the percent increase in 2011 is 9.78%.

CASH FLOW STATEMENT of AMBUJA CEMENT

Cash Flow of Ambuja Cements ------------------- in Rs. Cr. ------------------Dec '12 Dec '11 Dec '10 Dec '09 Dec '08 12 mths Net Profit Before Tax 1901.83 Net Cash From Operating Activities 1857.74 Net Cash (used in)/from -392.92 Investing Activities Net Cash (used in)/from Financing -504.43 Activities Net (decrease)/increase In Cash and 960.39 Cash Equivalents Opening Cash & Cash Equivalents 2899.37 Closing Cash & Cash Equivalents 3859.76 12 mths 1702.87 1617.12 -531.88 -474.78 610.46 2288.91 2899.37 12 mths 1661.87 1874.27 -527.29 -473.54 873.44 1415.47 2288.91 12 mths 1803.30 2129.15 -1196.13 -466.66 466.36 949.11 1415.47 12 mths 1969.84 966.22 -274.90 -482.06 209.26 642.58 851.84

Interpretations:
1. Net cash from operating activities has increase nearly 110% in 2009 ant hen increase in

2012 as compared to 2011.

34

Cash Flow Indicator Ratios 2012 Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times

2011 49.71 34.62 59.05 69.87 0.02 46.40 34.06 48.55 63.30 0.03

2010 36.60 28.00 58.47 69.20 0.04

2009 35.10 28.19 63.97 71.21 0.11

2008 27.94 23.55 63.75 70.81 0.22

Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends. The dividend payout ratio has been increasing constantly which shows that as the firm is getting mature it is paying more dividend to the shareholders. Cash Earning Retention Ratio is the percent of earnings credited to retained earnings. The cash earnings retention by the firm is averagely maintain by the firm 69% in last five years.

Profitability Ratios 2011 2012 Operating Profit Margin (%) 25.41 22.92 Profit Before Interest And Tax Margin 18.92 17.25 (%) Gross Profit Margin (%) 19.60 17.67 Cash Profit Margin (%) 21.22 17.90 Adjusted Cash Margin (%) 21.22 17.90 Net Profit Margin (%) 12.86 14.16 Adjusted Net Profit Margin (%) 12.86 14.16 Return On Capital Employed (%) 25.52 20.96 Return On Net Worth (%) 14.73 15.28 Adjusted Return on Net Worth (%) 17.87 13.79 Return on Assets Excluding 57.09 52.38 Revaluations Return on Assets Including 57.09 52.38 Revaluations Return on Long Term Funds (%) 25.52 21.05

2010 25.18 19.59 19.93 20.01 20.01 16.84 16.84 21.60 17.24 15.19 47.90 47.90 21.63

2009 27.07 22.32 22.87 20.46 20.46 16.78 16.78 27.04 18.83 18.35 42.45 42.45 27.04

2008 28.85 24.04 24.65 21.17 21.17 22.11 22.11 28.19 24.73 19.07 37.23 37.23 28.19

1. Operating ratio has decline from 2008 to 2011 and then it rise in 2012 after three years. It

shows that the efficiency of the firm is not stable in last four years, it get improved in 2012.
35

2. Return on capital employed is declining from 2008 to 2011 and it get improved in 2012. 3. All overall ratios indicate that the profitability of the firm is getting decline in 2008 to 2011.

The efficiency has get improved in 2012.

Liquidity And Solvency Ratios Current Ratio 1.22 Quick Ratio 0.95 Debt Equity Ratio -Long Term Debt Equity Ratio -Debt Coverage Ratios Interest Cover 29.83 Total Debt to Owners Fund 0.00 Financial Charges Coverage Ratio 37.30 Financial Charges Coverage Ratio 25.61 Post Tax Management Efficiency Ratios Inventory Turnover Ratio 11.17 Debtors Turnover Ratio 42.84 Investments Turnover Ratio 11.17 Fixed Assets Turnover Ratio 0.96 Total Assets Turnover Ratio 1.11 Asset Turnover Ratio 1.15

1.14 0.85 0.01 0.01 32.35 0.01 40.81 32.81 10.38 45.92 10.38 0.88 1.05 1.09

1.07 0.75 0.01 0.01 32.82 0.01 40.78 34.92 9.19 52.58 9.19 0.85 1.01 1.05

0.89 0.57 0.03 0.03 80.15 0.03 93.32 68.63 11.36 37.60 11.36 1.15 1.08 1.12

1.26 0.74 0.05 0.05 52.66 0.05 60.58 52.89 7.54 33.39 7.54 1.10 1.05 1.10

Interpretations:
1. The ideal current ratio is 2:1. The ratio has been increasing. It means that the idealness of

the fund has improved a lot. The funds are utilized efficiently.
2. The debt of the firm is constant in last years. It shows that the firm has not focus on the debt

funds.
3. The debt equity ratio is below 1 which shows that reflects companys dependence on the

debt finance, is very low. The main reason behind decrease in ratio is, increase in total shareholders funds. The majority of financing of the company is done by equity, and at the same time risk factor is also reducing because they dont have to pay interest to the debenture holders.
4. In 2012 debtor management has also been affected but not to a great extent. 36

5. The inventory turnover ratio has increased which shows that the demand of the product has

decline.
6. This ratio indicates the companys ability to generate net sales revenue from fixed assets of

the company, such as property, building and other equipments. A higher fixed asset turnover ratio shows that the company has been more effective in utilizing the revenue invested in fixed assets for generating net sales. The ratio has decline in 2010 which shows that the asset has not utilized effectively. It increase in 2012 but not a lot.

7. The interest cover of the firm has seen a great decline in 2010. It shows that the financial

position of the firm has been affected a lot. It also seen a decline in 2012 as compared to 2011. Conclusion The profitability of the Ambuja LTD. Has got improved in 2012 after 2008. IT has seen a growth and the current assets of the firm with investment has also got improved. But the debt has reduced and the interest coverage ratio has also decrease.

37

Moving Average crossover of Ambuja Cements

1. There is a bearish trend at the early of 2008, i.e. the time to sell it off and continue till mid-

2009.
2. From 2009 to mid - 2011 there is a bullish trend i.e. a perfect time to buy the stock. 3. From 2011 the trend keep on fluctuating and it is not stable.

38

Ultra Tech cement limited

UltraTech Cement 'The Engineer's Choice' is India's largest and the Worlds 10th largest manufacturer of cement with an installed capacity of 52 Million Tonnes Per Annum and an expected increase of 10 Million Tonnes Per Annum by FY 13. UltraTech is part of the US $40 billion Aditya Birla Group.

SWOT Analysis of Ultra Tech

STRENGTHS: Cement demand has grown in tandem with strong economic growth derived from: Growth in housing sector (over 30%) key demand driver. Infrastructure projects like ports, airports, power projects, dam & irrigation Projects. National Highway Development Programme. Bharat Nirman Yojana for rural infrastructure and rise in industrial projects. Production The companys production facilities are spread across 11 integrated plants, one white cement plant, 12 grinding units and 5 terminals, 4 in India and one in Sri Lanka. High quality cement production is increasing annually. Annual production capacity is 23.10 million tones. Use of high-end equipment such as the Gamma Metrics Machine and the X-ray Analyzer ensures that each product passing out of company. There is manufacturing facility adheres to global standards of quality and performance.
39

Logistics: Ultra Tech can directly deal with the limestone tenders and thus the middle man do not affect its cost. Company use the local transporters which provide the efficient transportation cost. Thereby reducing the extra expense and making cement more economical for the local man to afford. Plantation: Ultra techs manufacturing plant uses ultra-modern technology and imported machinery. Companys Unit at Koala is the only Unit in this sector in India to have a desalination plant. It is used for meeting the water needs of the plant and the colony. The waste gases from the cooler are used in the desalination plant. That makes the product recyclable and environmental friendly thereby contributing to the environment. The Ultra Tech cement manufacturing the greenbelt at companys Units is simply awesome and is surrounded by trees all around. At some points, company is advancing to achieve the skyline. Only the leaves and the flowers and hear the cacophony of the birds. Companys CSR (corporate social responsibility) activities extend to 127 villages, in proximity to its plants, across the country. Brand Positioning: In the world, Aditya Birla Group is the eighth largest cement player. Ultra Techs products include Ordinary Portland cement, Portland Pozzolana cement and Portland blast furnace slag cement. The company exports over 2.5 million tons per annum, which is about 30 per cent to the countrys total exports. Ordinary There is cement is the most commonly used cement for a wide range of process. Applications cover dry-lean mixes, general-purpose ready-mixes, and even high strength pre-cast and pre-stressed concrete. OPC (ordinary Portland cement) is used for applications, such as commercial buildings, industrial constructions, Multi storied complexes, cement concrete roads and heavy duty floors. PPC (Portland Pozzolana cement) cement is used for big construction like dam and thermal power plant. Distribution Channels: Ultra Techs distribution network is very widely spread out in the country with over 5,500 dealers and 30,000 retailers with its strong distribution channels currently UltraTech is starting to acquire a strong positioning in the market giving head on competition to its rivals. Quality: All the plants of Ultra tech are ISO 14001 Environment Management Systems certified sustain to OHSAS 18001 standards. Clean technologies and processes that combine economic progress and sustainable environment are adopted by the company for better performance. There is plants at Awarpur and Ratnagiri in Maharashtra; There is Jafrabad and Magdalla in Gujarat; Hirmi in Chhattisgarh; Arakkonam in Tamil Nadu; Tadipatri in Andhra Pradesh; Jharsuguda in Orissa and Durgapur in West Bengal. They have won the Capexil Certificate of Export Recognition Top Exporter Cement,
40

Clinker, Asbestos and Cement Products for the years 2000, 2002 and2003. Bhartiya Udyog Ratan Award presented to Sh. KYP Kulkarni by Indian Economic Development & Research Association (IEDRA) for good quality of cement to customer, New Delhi in 2004. (Narayanan, 2007)

WEAKNESSESS: Cement Industry is highly fragmented and it is also highly regionalized and Low value commodity makes transportation over long distances uneconomical. Not available in all the places: Ultra tech is not available at all the places as it is not manufactured at all places and all plants are not available everywhere due to which people cannot find it everywhere hence the profit margins are affected to a greater extend. Human Resource: Due to openness in the Ultra techs work culture which is very informal that does not suit for better management in corporate. The environment being very informal affects the management a lot as being the management they have to maintain a distance and discipline but due to the openness there is no such thing and they face a lot difficulty to control. And Ultra tech has insufficient man power due to its easy recruiting and selection method. Marketing: Lack of awareness program for consumers due to low promotion mix: the company faces the problem of proper promotion due to which the customers doesnt know much about the product resulting into less sales of the product instead of being a good product. Lack of marketing mix: the company suffers with the problem of proper marketing mix which in return results into the whole confusion state and the product does not reach to the customers properly and in fact a lot of them dont know about it also. Delay in supply: the company being situated in the outer parts of the city and its plant not being located in every city causes delay in the supply of the product. (Porter, 1988) Health: Highly dusty environment at the time of dumping the cement is hazardous for health. It affects humans respiratory system adversely. Ultra tech is therefore not contributing to society as its corporate social responsibility remains unfulfilled due to many hazards. Others: Cement industry is highly fragmented and regionalized as Low value commodity makes. As transportation over long distances is uneconomical for value sector, so cost of transporting cement is high and this keeps cement from being profitable over long distances. In other talks, shipping cement costs more than the profit from selling it. OPPORTUNITIES:
41

With the low per capita consumption of cement in India 102 kg compared to the global average of 260 kg and the emphasis on infrastructure development, Ultra tech has ample opportunity to ride the growth curve. UltraTech can develop new marketing area. It can sign MOUs (memorandum of understanding) with government regarding supply of cement for government work. UltraTech can also maintain the position of competition in the market. Institutional market like corporate and offices, school society complexes are growing in large scale, which will increase the requirement. People are opting for more stable structures and good future, so large use of cement is taking place, so government is spending heavily on infrastructure project as Indian industry base is growing rapidly Thus, this is the right time to fully invest in these market. There is regular demand of cement which in turn will increase foreign investment in this sector. As roads transformation process is going on through which the traditional method of road building will be convert by modern concrete roads. Substantially lower per capita cement consumption as compared to developing countries (1/3 rd of world average) Per capita cement consumption in India is 82 kgs against a global average of 255 kgs and Asian average of 200 kgs. For green field capacity 20 million tons per annum will be required to match the demand in pipeline for other two years leading to favorable demand supply scenario. THREATS: As huge cement industry emerge there is more competition for ACC (Associated Cement Companies) to carefully enhance its price, product and at the same time satisfy its dealers and customers. Cheap priced brand are capturing like a mushroom to lower income customer base. Players such as Jaypee Cement, Prism Cement, and Birla cement. ACC cement are eating up considerable market share. Due to India satisfy growth many new international cement companies are expected in coming years which will bring enormous change and can start price war. Government intervention to adjust cement prices Transportation cost is upgrading. Due to loading restriction there is overloading industrialist shows increase in costs due to the shortage in coal industry. Many retailers are influence by better profit margin, and other Benefits because of small industries increase competition among them, which in turn give heavy discount to customer and start malpractices. Timber is also being considered as one of the substitutes of cement, which is cheap and long lasting. Due to continuous attack of earthquake, many countries like Japan, Indonesia, and Singapore etc. are now using timber in construction since those areas are high earthquake affected.

42

Profit and loss account of Ultra Tech Cements

Profit & Loss account of UltraTech------------------- in Rs. Cr. ------------------Cement 2012 2011 2010 2009 2008

12 mths

12 mths

12 mths

12 mths

12 mths

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost 3,600.47 4,303.97 3,079.65 3,122.59
43

20,538.33 14,858.60 2,267.64 1,652.96

7,729.13 686.31 7,042.82 122.71 4.59 7,170.12

7,160.42 774.92 6,385.50 75.35 86.34 6,547.19

6,286.24 773.81 5,512.43 98.67 23.42 5,634.52

18,270.69 13,205.64 371.87 -20.33 286.63 66.11

18,622.23 13,558.38

1,593.03 1,430.91

1,280.31 1,712.98

1,032.34 1,253.26

Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

855.21 185.09 4,665.67 573.15 -39.11

690.64 179.97 3,565.77 90.44 -10.51

250.28 97.42 1,653.57 48.58 -4.02 5,069.77

216.76 92.58 1,405.51 28.88 -8.38 4,728.64

171.55 61.52 1,267.57 35.48 -13.37 3,808.35

14,144.45 10,718.55

Interpretations: Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power Cost & Fuel 3,600.47 4,303.97 855.21 185.09 1,032.34 2,568.13 1,253.26 171.55 61.52 123.57 1,267.57 3,398.10
44

2012 20,538.33 2,267.64 18,270.69 371.87 -20.33 18,622.23

2008 773.81 98.67 23.42

Absolute change

Percent increase decrease 226.7188335 193.0486812 231.4452973 276.8825378 -186.8061486 230.5025095 248.7678478 243.4219555 398.5193821

or

6,286.24 14,252.09 1,493.83 5,512.43 12,758.26 273.20 -43.75

5,634.52 12,987.71

3,050.71 683.66

Employee Cost Other Manufacturing Expenses

200.8615085

Selling and Admin 4,665.67 Expenses

268.0798694

Miscellaneous Expenses

573.15

35.48 -13.37

537.67

1515.417136

Preoperative Exp -39.11 Capitalized Total Expenses 14,144.45

-25.74 3,808.35 10,336.10

192.5205684 271.4062521

11. There is an upward trend in total income. 12. Total income in 2012 has risen by 230.5% as compared to 2008. 13. Sales turnover has also increase by approx. 226.67% which is a big number. 14. With the increase in sales turnover the selling and admin expenses has also increase

by 268.07%

TOTAL INCOME OF ULTRA TECH CEMENT

Year 2008 2009 2010 2011 2012

Total Income 5,634.52 6,547.19 7,170.12 13,558.38 18,622.23

1. Total income remain nearly constant from 2008 to 2010 and then it shows an upward

trend in 2011 and 2012.

45

Profit & Loss Account Ratios 2011 2012 Material Cost Composition 19.70 23.32 Imported Composition of Raw 8.22 7.16 Materials Consumed Selling Distribution Cost Composition 24.18 23.99 Expenses as Composition of Total 2.27 3.13 Sales

2010 22.61 3.01 20.98 6.83

2009 20.05 0.72 19.67 9.70

2008 18.72 1.53 20.73 9.45

1. Material cost composition has shown a downward trend as compared to previous years. 2. The firm expenses as composition of total expenses has also reduced in previous years.

3. Cash Flow of UltraTech Cement

------------------- in Rs. Cr. ------------------2008 12 mths 1786.19 2074.26 -1648.91 -430.85 -5.50 150.29 144.79 12 mths 1588.16 1571.93 -851.66 -741.03 -20.76 104.49 83.73 12 mths 1361.46 1457.57 -1645.43 191.66 3.80 100.69 104.49 12 mths 1507.01 1375.26 -1441.79 77.63 11.10 89.59 100.69

2012

2011

2010

2009

12 mths Net Profit Before Tax 3392.87 Net Cash From Operating Activities 3443.40 Net Cash (used in)/from -2926.04 Investing Activities Net Cash (used in)/from Financing -473.96 Activities Net (decrease)/increase In Cash and 43.40 Cash Equivalents Opening Cash & Cash Equivalents 144.79 Closing Cash & Cash Equivalents 188.19

Year 2008 2009 2010 2011 2012

Net cash from operating activities 1375.26 1457.57 1571.93 2074.26 3443.4

46

Net cash from operating expenses has been rising continuously from 2008. It is approx. 50 %more as compared to 2008.

Cash Flow Indicator 2012 Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times

Ratios 10.41 7.60 88.12 91.64 1.25

2011 13.60 8.80 84.66 90.50 2.06

2010 7.96 5.87 91.88 94.04 1.10

2009 7.45 5.60 92.73 94.50 1.62

2008 7.22 5.84 92.70 94.10 1.41

1. Dividend payout ratio has been nearly constant from 2008 to 2010. It has decline in 2012 as

compared to 2011 which state that the dividend payout to shareholders has decline.
2. Earning retention has risen in 2012 3. It can be inferred from the above table that the firm has chosen to retain the profit in spite of

distributing them as a dividend.

Liquidity And Solvency Ratios 2011 2012 Current Ratio 0.67 0.67 Quick Ratio 0.36 0.34 Debt Equity Ratio 0.30 0.39 Long Term Debt Equity Ratio 0.28 0.36 Debt Coverage Ratios Interest Cover 14.85 7.53 Total Debt to Owners Fund 0.30 0.39 Financial Charges Coverage Ratio 18.88 9.75 Financial Charges Coverage Ratio 15.96 8.54 Post Tax
47

2010 0.67 0.30 0.35 0.34 14.97 0.35 16.75 12.94

2009 0.59 0.34 0.59 0.51 12.75 0.59 13.74 10.70

2008 0.58 0.38 0.65 0.53 20.85 0.65 22.15 16.19

Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital

15.73 26.71 15.73 0.97 1.10 1.16

17.69 32.28 17.69 0.74 0.89 1.26

22.65 35.04 22.65 0.87 1.14 1.18 29.94 7.29 -33.61

22.89 31.71 22.89 0.86 1.11 1.25 28.87 6.35 -34.05

31.16 27.55 31.16 1.11 1.24 1.11 23.23 6.82 -33.77

36.89 32.00 7.37 9.60 -37.80 -38.85

Interpretations
1. The ideal current ratio is 2:1. There is no such change in it from 2010. It is constant. 2. The debt equity ratio has decline .It shows that the debt financed from the equity has

reduced. It is low of 1 which state firm is not so dependent on debt.

3. The interest coverage ratio has got doubled in 2012 as compared to 2011. It shows the

financial position of the firm has got improved.

4. Investment turnover ratio has decline it shows that the investment made by the firm has also

decline as compared to previous years.

5. Inventory turnover ratio has also reduced which state that the demand has also reduced.

48

Moving average crossovers of UltraTech cement

1. A bearish trend follows in early-2008 and continue till mid-2009. 2. A bullish trend follows in mid- 2009 which indicate a favorable situation to buy a

stock and continue till mid-2010.

3. A 2011 is a period of instability of stock with various fluctuations 4. 2012 is a perfect period and example of bullish trend and a time to buy a stock.

INDIA CEMENT LIMITED

49

The India Cements Ltd was established in 1946 and the first plant was setup at Sankarnagar in Tamilnadu in 1949. Since then it has grown in stature to seven plants spread over Tamilnadu and Andhra Pradesh. The capacities as on March 2010 have reached 14.05 mtpa. Company Highlights The Company is the largest producer of cement in South India. The Company's plants are well spread with three in Tamilnadu and four in Andhra Pradesh which cater to all major markets in South India and Maharashtra. The Company is the market leader with a market share of 28% in the South. It aims to achieve a 35% market share in the near future. The Company has access to huge limestone resources and plans to expand capacity by de-bottlenecking and optimization of existing plants as well as by acquisitions. The Company has a strong distribution network with over 10,000 stockiest of whom 25% are dedicated. The Company has well established brands- Sankar Super Power, Coromandel Super Power and Raasi Super Power. Regional offices in all southern states and Maharashtra offices/representative in every district. The Vision The new millennium will bring with it new challenges and greater opportunities. The 21st century will most certainly see the unfolding of a period of extraordinary possibilities and incredible developments bringing about more fundamental changes in the global economy than the last 200 years. The successful corporates will be those who equip themselves to meet the challenges and convert opportunities into winning strategies. If we are to keep pace, it is imperative that we learn to successfully tread the global pathway. In this journey, clarity of vision, a readiness to cultivate a global mindset, effectiveness, harnessing of human resources to enhance job and knowledge skills of employees, a strong accent on R & D and innovation and a move away from selling, to innovative marketing in recognition of the fact that the Customer is truly King, are some of the strategies that will help corporates to survive and succeed. However it must be remembered that it is not enough to adopt a set of values and just leave them in place. In order to move with the changing times, values and ideas must be ceaselessly reexamined so as to ensure that they are in tune with the organizations goals. The India Cements Limited is committed to contribute its might in making the 21st century an "Indian Century".

Profit and loss account of India Cements (2008 to 2012)

Profit & Loss account of India Cements 2012 2011 2010 2009 ------------------- in Rs. Cr. ------------------2008

12 mths

12 mths
50

12 mths

12 mths

12 mths

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 586.86 1,094.69 302.63 87.02 1,023.31 202.37 0.00 3,296.88 Interpretations: 565.84 1,020.08 265.44 56.07 1,022.47 144.48 0.00 3,074.38 540.62 999.85 276.81 47.18 953.30 127.07 0.00 2,944.83 406.38 891.60 218.74 49.99 769.93 96.50 0.00 2,433.14 340.90 690.75 186.61 30.87 664.35 68.50 0.00 1,981.98 4,722.53 519.12 4,203.41 15.65 -3.16 4,215.90 3,888.07 474.78 3,413.29 125.32 11.40 3,550.01 4,100.70 413.64 3,687.06 163.34 15.24 3,865.64 3,839.12 480.78 3,358.34 35.32 13.41 3,407.07 3,554.47 510.22 3,044.25 0.37 30.32 3,074.94

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure

2012 4,722.5 3 519.12 4,203.4 1 15.65 -3.16 4,215.9 0

2008 3,554.47 510.22 3,044.25 0.37 30.32 3,074.94

Absolute Change 1,168.06 8.90 1,159.16 15.28 -33.48 1,140.96

Percent Increase or Decrease 32.86172 1.744346 38.07703 4129.73 -110.422 37.10511

51

Raw Materials Power & Fuel Cost Employee Cost Other Manufacturin g Expenses Selling and Admin Expenses Miscellaneou s Expenses Preoperative Exp Capitalised Total Expenses

586.86 1,094.6 9 302.63 87.02 1,023.3 1 202.37 0 3,296.8 8

340.9 690.75 186.61 30.87

245.96 403.94 116.02

72.15019 58.47847 62.17245

56.15 664.35 358.96 68.5 0 0.00 1,981.98 1,314.90 133.87

181.8918

54.03176 195.4307

0 66.34275

1. Net sales has got improved by 38.077 percent in 2012 as compared to 2008. 2. Stock adjustment has got a negative value in 2012. 3. Total income also has got increased in 2012 by 37 %. There is an upward trend till

2010 then it shows a negative trend and finally got improved in 2012.
4. Percent change in expenses are more than percent change in total income. 5. It can be interpret that the company is not able to focus on controlling its expenses

Profit & Loss Account Ratios 2012 Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times

2011 13.96 9.07 24.16 0.06 24.37 13.11 75.93 86.97 4.14
52

2010 14.66 6.96 23.78 0.03 20.21 11.91 75.96 86.86 3.91 6.11

2009 12.10 10.02 20.41 7.40 15.29 10.23 87.09 90.89 2.74

2008 11.19 4.17 20.96 0.55 10.47 8.60 90.15 91.82 2.22

16.57 28.25 0.04 78.89 17.21 -38.05 81.02 8.68

1. Selling and distribution expenses are increasing at a large rate from 2008 to 2011 but it get

control to some extent in 2012 and get low.

2. Dividend payout ratio has reduced by nearly 70% which state the dividend payment to

shareholders has got reduced by the firm.

3. Company has decided to retain its profit in spite of distributing them as a dividend.

CASH FLOW STATEMENT OF INDIA CEMENT LTD (2008 to 2012)

Cash Flow of India Cements 2012 2011 2010 2009 ------------------- in Rs. Cr. ------------------2008

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents
53

380.98

89.87 531.32 648.30

892.78

825.90 280.63 208.75 706.13 1016.87 -545.87 -354.47 -461.68 -941.82 -1017.31 -310.24 53.12 221.55 -104.76 -31.38 -340.44 85.20 425.64 195.90 195.46 230.18

-30.21 -20.72 33.09 53.81

Closing Cash & Cash Equivalents

2.88

33.09

53.81

85.20

425.64

Year 2008 2009 2010 2011 2012

Net Cash From Operating Activities 1016.87 706.13 208.75 280.63 825.9

1. The cash flow from operating activities in 2010 and 2011 is very low as compared to

previous years and 2012

Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios

2012 2011 21.49 15.44 15.51 12.97 12.97 6.93 6.93 10.59 7.21 7.30 132.13 132.13 12.06 0.95 1.35 0.56 0.37
54

10.26 3.02 3.11 8.06 8.06 1.94 1.94 3.37 1.92 1.09 115.23 133.14 3.74 1.28 1.69 0.69 0.53

2010 20.54 13.82 14.22 14.36 14.36 9.33 9.33 10.90 10.04 8.44 114.86 134.64 11.66 1.46 1.54 0.60 0.50

2009 27.94 21.16 21.89 20.88 20.88 12.44 12.44 16.95 14.64 17.33 104.52 128.10 17.84 1.13 1.23 0.67 0.59

2008 35.88 31.26 31.68 26.46 26.46 20.66 20.66 22.57 24.77 26.34 91.28 116.98 23.34 1.43 1.49 0.70 0.64

Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio

2.34 0.56 3.22 2.90 8.98 18.11 8.98 0.69 0.71 0.65

1.51 0.69 3.15 3.20 23.24 9.23 23.24 0.62 0.61 0.53

4.58 0.60 6.06 5.21 25.93 8.79 25.93 0.69 0.70 0.62

8.03 0.67 9.40 6.76 26.36 10.10 26.36 0.68 0.73 0.62

9.63 0.70 10.31 8.06 27.47 10.66 27.47 0.70 0.75 0.70

Interpretations:
1. Operating profit has got doubled in 2012 as compared to 2011. 2. Gross profit margin has got 5 times in 2012. 3. Net profit has got 6 times in 2012 as compared to previous years. 4. Debt- equity ratio has reduced. It indicates that the debt financed from equity has reduced. 5. Ideal ratio is 2:1 but the current ratio of the firm has reduced which shows that the funds are

not utilized properly.

6. Inventory turnover ratio has reduced which is a favorable sign indicating that the demand

has improved and making the company to make profits.

7. Debtors turnover ratio has got doubled. 8. All overall ratios are indicating that the efficiency of the firm has improved a lot.

Total Assets of India cement

Year 2008 2009 2010 2011

55

Total Assets 5,132.59 5,619.41 6,268.54 6,545.83

2012

6,336.20

Total Assets in 2012 has decline as compared to previous years. This may be because company have sold its assets.

Moving Average Crossovers of India Cement Limited.

Interpretations
1. From 2008 to mid-2009 there is a bearish trend in the market. Stock must be sold in this

period.
2. In June 2009there is a crossover indicating a bullish trend and a stock must be buy at this

time.
3. Year 2010 see many crossover and changes in trend 4. From November 20 5. 2011 to march 2012 there is bearish trend in the market.

56

Shree cement Limited

Shree Cement has earned the recognition of being one of the most efficient and sustainable organizations, friendly and loyal to all its stakeholders. Its continued thrust on realizing higher efficiencies has enabled the delivery of strong operational performances year after year while high standards of corporate governance and emphasis on transparency and timely reporting have made it a globally admired company. Shree has successfully created and sustained a culture which encourages innovation and rewards risk taking which in turn has led to high engagement levels amongst its people who perform and outperform at work every single day.

Vision of SCL To register a strong consumer surplus through a superior cement quality at affordable prices.

Philosophy of SCL Shree Cement is guided by the philosophy that productivity will lead to profitability which ultimately will lead to the prosperity of the region and all concerned with SCL. Strengths of SCL 1.) Low Cost Producer: SCL is one of the lowest cost producers of cement in India. The prime reasons behind this are captive power plants, use of pet coke in both captive power plant and kiln and proximity to the markets.

2.) Limestone Reserve: SCL has a total of 700 MN tones of limestone reserve which would be sufficient to meet its requirements for the next 40 years. Shree Cement's third unit is located at the
57

pithead of limestone reserve unlike the other two units in Beware, Rajasthan. Unit IV, which is expected to be commissioned in FY08, would also be located at the pithead of company's limestone reserve. As the new plants are located at the pithead of limestone reserve, the raw material cost per ton of cement is expected to go down as the company would be saving in cost of transportation.

3.) Captive Power Plants: During FY05, the company sourced 99% of power requirement from its captive power plant. The company has existing power plant capacity of 42 MW. The company is installing additional power plant of 18 MW capacities, which would supply power to its new cement units, thereby ensuring continuation of self-sufficiency in terms of power requirement. Shree Cement's power usages per ton of cement at 75 Kwh is amongst the lowest in the industry. The company uses low cost pet coke in both its power plants and kiln. Pet coke is not only cheaper compared to the imported coke but also has high calorific values thereby reducing the overall cost.

4.) Strong sales network of 28 sales offices, 1200 dealers and 4000 retailers. 5.) Progressive Management: Shree Cement supplemented its attractively low capital investment per ton with one of the lowest manufacturing costs in the Indian cement industry. 6.) Mining: Limestone being the predominant raw material, Shree Cement plants are situated near limestone quarry fields. To minimize the transportation cost, Shree Cements has leased two mines one at Beware and other at Ras with reserves that will last for a long time. The Ras mines give a limestone of very good quality which is easier to process. Profit and Loss Account of Shree Cements Limited (2008 to 2012) Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost 2012 6,577.37 710.86 5,866.51 150.44 -18.69 5,998.26 923.04 1,499.87 319.49
58

2011 3,937.79 438.90 3,498.89 70.84 34.81 3,604.54 811.93 912.32 199.14

2010 4,014.09 385.89 3,628.20 61.72 23.58 3,713.50 646.64 610.48 159.21

2009 3,097.17 380.70 2,716.47 45.22 -11.08 2,750.61 502.34 605.81 104.38

2008 2,440.32 332.11 2,108.21 32.35 -8.13 2,132.43 376.37 367.23 74.02

Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

68.11 0.00 1,391.55 0.00 4,202.06

50.33 659.54 12.63 0.00 2,645.89

41.79 670.73 18.88 0.00 2,147.73

36.44 481.40 21.32 0.00 1,751.69

22.19 380.04 14.89 0.00 1,234.74

Interpretations Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturin g Expenses Selling and Admin Expenses Miscellaneou s Expenses Preoperative Exp Capitalised Total Expenses 923.04 1,499.8 7 319.49 68.11 376.37 367.23 74.02 22.19 45.92 0 1,391.5 5 0 4,202.0 6 380.04 -380.04 14.89 0 0.00 1,234.74 2,967.32 240.3194 1,376.66 -100 9245.534 206.9401 546.67 1,132.64 245.47 145.248 308.428 331.6266 2012 6,577.3 7 710.86 5,866.5 1 150.44 -18.69 5,998.2 6 Absolute 2008 Change 2,440.32 332.11 2,108.21 32.35 -8.13 2,132.43 4,137.05 378.75 3,758.30 118.09 -10.56 3,865.83 Percent Increase or Decrease 169.529 114.0435 178.2697 365.0386 129.8893 181.2875

59

1. Sales turnover has got triple in 2012 as compared to 2008 2. Net Sales has increase by 178% in 2012 as compared to 2008 3. Total income has increase by 138% in 2012. 4. It shows that the financial position of the firm has got improved so much in last five years. 5. There is no selling and administrative expenses in 2012. 6. Total expenses has increased so much as compared to total income.

Profit & Loss Account Ratios 2012 Material Cost Composition 23.20 Imported Composition of Raw Materials 2.67 Consumed Selling Distribution Cost Composition 17.55 Expenses as Composition of Total Sales 0.89

2011 17.82 0.90 17.35 0.31

2010 18.49 -16.90 0.68

2009 17.85 -17.06 0.81

2008 18.42 -15.98 --

2. Raw material consumption has got increased in 2012. 3. Selling distribution expenses are same nearly in 2012 and 2011

Cash Flow of Shree Cements 2012 2011 2010 2009

------------------- in Rs. Cr. ------------------2008

12 mths

12 mths

12 mths

12 mths

12 mths

Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities

110.35 1074.43 -636.07

60

867.91 1253.98 -1688.45

722.91 802.01 -854.50

368.31 662.57 -900.17

189.45 460.52 -642.53

Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

-393.93 44.43 416.37 460.81

378.58 -55.89 472.26 416.37

57.31 4.83 467.43 472.26

351.73 114.13 353.31 467.43

516.25 334.24 19.07 353.31

Net Income from operating activities Net Cash From Operating Activities 2008 2009 2010 2011 2012 460.52 662.57 802.01 1253.98 1074.43

Year

There is an upward trend from 2008 to 2011 but there is a decline in 2012. Cash Flow Indicator Ratios 2012 Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times 2011 27.06 6.41 63.42 93.17 2.22 7.82 4.24 91.98 95.71 1.63 2010 7.05 5.20 93.08 94.87 1.81 2009 12.52 4.41 89.48 95.87 1.61 2008 13.46 3.90 84.86 95.97 1.49

Interpretations:
1. Dividend Payout ratio has nearly four times in 2012 as compared to 2011 2. Being declaring higher dividend the earning retention ratio has got down in 2011.

61

Profitability Ratios 2012 Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Interpretations:

2011 25.37 5.92 6.06 23.22 23.22 5.86 5.86 7.57 10.55 7.81 570.13 570.13 7.94 1.06 0.96 0.93 0.84 1.70 0.93 5.51 6.05 17.49 36.71 17.49 0.87 0.92 0.87 41.45 25.30 25.73 33.32 33.32 18.32 18.32 25.91 36.88 35.96 526.23 526.23 27.13 1.13 1.10 1.09 1.00 8.40 1.09 12.13 10.66 17.50 51.56 17.50 1.23 0.95 1.23

2010 35.10 26.93 27.54 28.56 28.56 20.80 20.80 30.64 47.76 48.61 347.33 347.33 32.66 1.34 1.71 1.19 1.05 10.89 1.19 13.16 11.15 63.70 50.44 63.70 1.21 1.03 1.21

2009 41.04 17.76 18.33 36.23 36.23 11.96 11.96 23.37 38.69 46.03 193.13 193.13 23.78 1.84 1.70 1.89 1.84 9.13 1.89 17.93 15.21 28.34 55.73 28.34 0.96 1.09 0.96

2008 42.33 11.29 42.45 42.84 41.46 12.43 11.04 13.62 38.94 34.61 130.48 144.61 13.62 2.30 1.82 1.94 1.94 17.53 1.94 51.07 51.67 9.12 63.01 15.74 1.85 1.05 0.85

1. Operating and gross profit ratio has decline which shows that the there is a decline in the

profit of the firm.

2. Ideal ratio is 2:1, but the current ratio is 1.06, it is satisfactory but not ideal one. 3. There is no such change in inventory turnover ratio which indicate there is no change in

demand.
62

4. Interest coverage ratio has got down by 7 times. 5. Debtor turnover ratio has got down 6. Debt equity ratio has got down, it shows a favorable position. 7. So we can conclude that the efficiency of the firm has got decline in 2012.

TOTAL ASSETS OF SHREEE CEMENT LIMITED Year Total Assets 1,942.92 2008 2009 2010 2011 2012 2,644.31 3,840.48 3,830.46 3,695.00

Moving average crossovers of Shree cement limited (2008 to 2012)

1. In March 2009 there is a crossover and indicate that there is bullish trend and a perfect

time to buy the stock and it continue till end- 2010.

63

2. In 2011 there is a slightly crossover for limited time period indicating bearish trend. 3. In end -2011 there is crossover of bullish trend and a time to buy a stock and continue till

2013.

Aditya Birla Corporation

A US $40 billion corporation, the Aditya Birla Group is in the League of Fortune 500. It is anchored by an extraordinary force of over 136,000 employees, belonging to 42 different nationalities. The Group has been ranked Number 4 in the Global 'Top Companies for Leaders' survey and ranked Number 1 in Asia Pacific for 2011. 'Top Companies for Leaders' is the most comprehensive study of organizational leadership in the world conducted by Aon Hewitt, Fortune Magazine and RBL (a strategic HR and Leadership Advisory firm). Over 53 per cent of its revenues flow from its overseas operations. The Group operates in 36 countries Australia, Austria, Bangladesh, Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Indonesia, Italy, Ivory Coast, Japan, Korea, Laos, Luxembourg, Malaysia, Myanmar, Philippines, Poland, Russia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Turkey, UAE, UK, USA and Vietnam.

SWOT ANALYSIS of Aditya Birla Cements STRENGTHS. 1. It is having a good image and brand loyalty among consumers. 2. Service is good 3. They have same price prevailing for wholesale at dealers/stockiest retailers end.

64

Its cyclical industry High transport cost. Highly regionalized and localized market. Limited presence in southern market. Capacity constraints to limit sales. Lack of timely capacity addition to restrict sales. Dependent on govt. for license of mines. High excise duty creates cost high. Levy of royalty over and above the technical services fees.

Opportunities Huge govt. expenditure in infrastructure development to boosts the cement demand high. Low cost housing loan increased the real estate and individual housing also. Rising population works as a catalyst for housing boom.

Threats

Increasing Competition from the Competitors. Competition from the global market too.

Profit and Loss Account of Aditya Birla Cement

2012 2011 2010 2009 12 mths Income Sales Turnover Excise Duty Net Sales 2,596.82 307.36 2,289.46 12 mths 2,435.37 289.00 2,146.37
65

2008 12 mths 2,401.77 237.33 2,164.44 12 mths 2,049.04 246.23 1,802.81 12 mths 1,996.86 271.95 1,724.91

Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

108.42 -40.37 2,357.51 641.16 532.57 213.80 77.71 378.28 43.14 -56.01 1,830.65

111.80 36.04 2,294.21 634.64 459.87 174.26 81.34 356.81 36.57 -9.32 1,734.17

108.56 34.42 2,307.42 508.16 382.10 146.27 87.08 326.51 27.61 0.00 1,477.73

50.54 -15.36 1,837.99 440.15 368.21 148.59 64.54 295.12 25.26 0.00 1,341.87

34.03 29.57 1,788.51 344.26 328.32 141.45 93.01 248.19 23.40 0.00 1,178.63

Interpretation: Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturin g Expenses Selling and Admin Expenses Miscellaneou s Expenses Preoperative Exp Capitalised 2012 Absolute 2008 Change 599.96 35.41 564.55 74.39 -69.94 569.00 0.00 641.16 532.57 213.8 77.71 344.26 328.32 141.45 93.01 296.90 204.25 72.35 -15.30 86.2429559 62.2106481 51.1488158 -16.4498441 Percent increase or decrease 30.0451709 13.0207759 32.7292438 218.601234 -236.523504 31.8141917

2,596.82 1,996.86 307.36 108.42 -40.37 271.95 34.03 29.57

2,289.46 1,724.91

2,357.51 1,788.51

378.28 43.14 -56.01

248.19 23.4 0
66

130.09 19.74 -56.01

52.4154881 84.3589744

Total Expenses

1,830.65 1,178.63

652.02

55.3201598

1. Sales turnover has increased by 30.04% in 2012 as compared to 2008. 2. Total Income has increased by 31.23% in 2012 as compared to 2008 3. Raw material expenses has increased by a large number of 86.24% 4. Total expenses are greater than the total income .Total expenses has increased by

55.320%

Profit & Loss Account Ratios Material Cost Composition 28.00 Imported Composition of Raw Materials 8.47 Consumed Selling Distribution Cost Composition 15.28 Expenses as Composition of Total 3.36 Sales

29.56 15.83 15.22 4.63

23.47 33.31 13.32 3.28

24.41 5.34 14.34 5.01

CASH FLOW STATEMENT OF BIRLA CORPORATION

Cash Flow of Birla Corporation

2012 2011 2010 2009 12 mths Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 346.05 167.70 -174.02 12.93 6.61 27.39 34.00

------------------- in Rs. Cr. ------------------2008 12 mths 437.66 267.88 -436.02 199.92 31.79 339.27 371.06 12 mths 760.81 449.33 -778.34 348.57 19.55 319.72 339.27 12 mths 436.46 404.75 -75.03 -55.03 288.21 31.51 319.72 12 mths 551.18 394.09 -334.41 -62.71 -3.04 34.39 31.36

67

NET CASH FLOW FROM OPERATING ACTIVITES

YEAR 2008 2009 2010 2011 2012

Net Cash From Operating Activities 394.09 404.75 449.33 267.88 167.7

1. 2012 has lowest of cash flow from operating activities in last 5 years. 2. It keeps on fluctuating. 3. 2010 face a highest flow of cash from operating activities an s compared to others years.

Cash Flow Indicator Ratios 2012 Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times

2011 22.44 16.82 75.37 81.98 3.77 16.81 13.97 82.18 85.33 2.58

2010 9.68 8.80 89.39 90.44 1.15

2009 12.53 11.04 86.18 87.96 0.68

2008 9.15 8.28 90.61 91.53 0.54

1. Dividend payment has increased in 2012 as compared to 2011. 2. Earning retention has come down.

Profitability Ratios Operating Profit Margin (%)

2012 2011 18.227

20.88
68

2010 33.31

2009 24.71

2008 33.38

Profit Before Interest And Tax Margin 14.19 (%) Gross Profit Margin (%) 14.78 Cash Profit Margin (%) 12.49 Adjusted Cash Margin (%) 12.49 Net Profit Margin (%) 10.03 Adjusted Net Profit Margin (%) 10.03 Return On Capital Employed (%) 12.88 Return On Net Worth (%) 10.69 Adjusted Return on Net Worth (%) 9.74 Return on Assets Excluding 290.34 Revaluations Return on Assets Including 291.36 Revaluations Return on Long Term Funds (%) 14.48 Liquidity And Solvency Ratios Current Ratio 0.94 Quick Ratio 1.00 Debt Equity Ratio 0.50 Long Term Debt Equity Ratio 0.34 Debt Coverage Ratios Interest Cover 4.04 Total Debt to Owners Fund 0.50 Financial Charges Coverage Ratio 4.75 Financial Charges Coverage Ratio Post 3.95 Tax Management Efficiency Ratios Inventory Turnover Ratio 19.77 Debtors Turnover Ratio 56.18 Investments Turnover Ratio 19.77 Fixed Assets Turnover Ratio 1.04 Total Assets Turnover Ratio 0.68 Asset Turnover Ratio 0.72

17.08 17.86 16.32 16.32 14.25 14.25 16.06 15.60 14.71 266.23 267.24 18.08 0.90 0.96 0.46 0.30 8.00 0.46 8.82 7.21 15.87 64.65 15.87 1.23 0.72 0.79

29.74 30.74 25.19 25.19 24.90 24.90 30.35 31.24 28.49 231.57 232.61 33.66 0.92 0.93 0.36 0.23 28.35 0.36 29.45 23.72 18.37 102.72 18.37 1.51 0.89 1.09

21.99 22.30 18.40 18.40 17.68 17.68 28.40 25.28 22.91 166.16 167.22 30.24 0.98 0.90 0.18 0.11 20.68 0.18 21.39 17.64 26.19 69.73 26.19 1.33 1.20 1.31

30.48 30.98 24.25 24.25 22.45 22.45 45.94 39.49 38.50 129.41 130.51 51.08 0.73 0.65 0.23 0.10 26.71 0.23 28.68 21.66 20.17 58.53 20.17 1.47 1.41 1.47

Interpretations:

1. Gross profit and net profit margin has got reduced in 2012 as compared to 2011. 2. Current ratio is 0.94, it is satisfactory but not ideal one. 69

3. Debt equity ratio has increased which shows a more dependence on lenders. 4. Inventory turnover ratio has increased in 2012 after 3 years there is such an increase. 5. Debtor turnover ratio has reduced. The debtors turnover ratio explains the number of

times the debtors turned over a period of a financial year. So in FY 2012 it has reduced.
6. Interest cover ratio has come down by 50% it signifies that the firm is not paying

enough interests on its debts.

7. Fixed assets turnover ratio is showing a downward trend from 2010 onwards.

Moving Average crossover of Birla Corporation.

1. 2008 is a period of bearish trend. 2. In 2010 - March there is crossover of bullish trend and stock must be buy at this time. It is a

perfect time.
3. In 2011 the stock must be sold out as there is a bearish crossover and continue till end

2012.
4. In end 2012 there is a bullish crossover.

70

Barak Valley Cements Limited

History and background Barak Valley Cements Limited was incorporated as a Public Limited Company in the year 1999, under the Companies Act, 1956. The Company was promoted by Mr. Prahlad Rai Chamaria, Mr. Bijay Kumar Garodia and Mr. Santosh Kumar Bajaj. The promoters of the company are born and brought up in the North East Region. All the promoters of the Company are well known and reputed businessmen in North East and are having a vast experience in different segments like plywood, Timber, Cement, and Concrete Sleepers etc. Presently the Company is engaged in the business of manufacturing of cement of different grades and is marketing its product under the brand name "Valley Strong Cement". The company started its commercial production in April 2001. The company started its commercial production at the capacity of the plant at 300 TPD initially. The capacity of the plant was further enhanced from 300 TPD to 460 TPD. The technology that is used in manufacturing our product is Dry Process Rotary Kiln Technology with 4 stage Suspension Pre Heater technology. The company is located in Assam and all the operations of the company are concentrated in the North Eastern region. The manufacturing unit of the company is at Joom Basti, Devendranagar, Badarpurghat, District Karimganj, and Assam. Our sales are also concentrated in the North Eastern region. Our operations include raw material procurement, crushing, blending, grinding and packaging of cement. Our product portfolio includes both Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC). Our Company is ISO 9001: 2008 certified company and our products confirm to BIS (Bureau of Indian Standards) specifications. Being located in Assam, we are entitled to get various benefits like Excise duty exemption, Central Sales tax/VAT exemption, Income-tax exemption, Working capital interest subsidy and Insurance subsidy.

71

PROFIT AND LOSS ACCOUNT OF BARAK VALLEY CEMENTS

Year Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 2012 99.78 2.55 97.23 0.37 -2.77 94.83 26.94 28.16 8.61 0.66 0.00 24.85 0.00 89.22 2011 97.00 1.88 95.12 0.16 1.54 96.82 25.61 21.07 7.10 2.21 0.00 30.53 0.00 86.52 2010 115.55 2.61 112.94 0.07 0.27 113.28 33.67 24.37 7.94 1.52 22.26 0.79 0.00 90.55 2009 90.69 1.43 89.26 0.43 -1.79 87.90 21.48 24.23 6.57 2.23 14.92 0.83 0.00 70.26 2008 71.33 0.88 70.45 0.30 1.96 72.71 21.44 13.21 5.00 1.71 10.26 0.79 0.00 52.41

Interpretations: Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials 26.94 21.44 5.5
72

2012 99.78 2.55 97.23 0.37 -2.77

2008 71.33

Absolute change

Percent increase or decrease

28.45 0.88 70.45 0.3 1.96 -4.73 94.83 72.71 22.12 0 1.67 26.78 0.07

39.885 189.773 38.0128 23.3333

-241.33

30.4222

25.653

Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

28.16 8.61

13.21 14.95 5 3.61 113.172 72.2

0.66

1.71 -1.05 -61.404 -100 3045.57

0 24.85 0 89.22

10.26 -10.26 0.79 0 52.41 36.81 70.2347 24.06 0

1. Sales turnover has increased by 39.88% in 2012 as compared to 2008. 2. Excise duty has increased by 189% in 2012 as compared to 2008. 3. Net Income has increased by 38% in 2012 as compared to 2008. 4. Raw material expenses has also increase in 2012 as of in 2008. 5. Total expenses has increased by 70.23% in 2012 as compared to 2008.

Profit & Loss Account Ratios 2011 2012 Material Cost Composition 27.70 Imported Composition of Raw Materials -Consumed Selling Distribution Cost Composition -Expenses as Composition of Total Sales -Cash flow statement

2010 26.92 ---29.81 -17.15 --

2009 24.06 -14.83 --

2008 30.43 -11.91 --

Cash Flow of Barak Valley Cements 2012 2011 2010 2009

------------------- in Rs. Cr. ------------------2008

73

12 mths

12 mths

12 mths

12 mths

12 mths

Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

-6.69 -5.25 -3.82 8.03 -1.05 4.22 3.17

0.23 -0.58 -15.33 14.72 -1.19 5.41 4.22

13.35 22.65 -21.85 1.20 2.00 3.41 5.41

8.44 15.40 -7.24 -6.19 1.97 1.44 3.41

12.95 8.77 -17.56 8.55 -0.23 1.67 1.44

NET CASH FLOW FROM OPERATIONS

YEAR 2008 2009 2010 2011 2012

Net Cash From Operating Activities 8.77 15.4 22.65 -0.58 -5.25

74

Net cash flow from operating activities has become negative in 2011 and 2012. It means efficiency of firm has got fluctuate. Cash Flow Indicator Ratios 2012 Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times 2011 -------100.00 100.00 10.19 2010 19.67 13.27 80.68 86.89 1.88 2009 31.74 18.08 68.26 81.92 2.13 2008 47.12 32.85 53.10 67.26 1.97

1. Dividend payout ratio is showing a negative trend from 2008 to 2012. 2. Earning retention ratio is 100% and thats the reason of paying no dividend.

Profitability Ratios 2012 Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including

2011 5.40 0.29 0.29 -1.90 -1.90 -6.88 -6.88 0.32 -8.06 -8.19 37.56 37.56
75

2010 10.66 5.06 5.07 5.83 5.83 0.60 0.60 3.39 0.64 0.26 40.58 40.58 20.06 14.51 14.52 17.49 17.49 11.66 11.66 12.94 14.76 15.03 40.28 40.28

2009 19.27 12.41 12.46 15.98 15.98 9.10 9.10 10.48 10.39 10.39 35.46 35.46

2008 28.38 21.62 21.73 22.36 22.36 15.53 15.53 14.92 15.08 15.16 32.91 32.91

Revaluations Return on Long Term Funds (%) 0.32 Liquidity And Solvency Ratios Current Ratio 3.10 Quick Ratio 2.78 Debt Equity Ratio 0.80 Long Term Debt Equity Ratio 0.80 Debt Coverage Ratios Interest Cover 0.07 Total Debt to Owners Fund 0.80 Financial Charges Coverage Ratio 0.76 Financial Charges Coverage Ratio Post 0.76 Tax Management Efficiency Ratios Inventory Turnover Ratio 13.22 Debtors Turnover Ratio 10.89 Investments Turnover Ratio 13.22 Fixed Assets Turnover Ratio 1.00 Total Assets Turnover Ratio 0.65 Asset Turnover Ratio 0.66

3.39 4.39 3.65 0.63 0.63 1.05 0.63 2.17 2.24 9.91 14.83 9.91 1.07 0.65 0.70

17.90 0.60 2.49 0.42 0.02 5.48 0.42 7.51 7.46 43.25 20.12 43.25 1.32 0.89 0.96

13.48 0.76 2.88 0.39 0.08 3.83 0.39 5.82 5.74 44.21 16.79 44.21 1.08 0.82 0.84

18.01 0.88 2.41 0.43 0.18 6.20 0.43 7.91 7.14 13.58 17.99 13.58 0.93 0.68 0.93

Interpretations:
1. Profit is showing a negative trend from 2012 to 2008. 2. Debtors turnover ratio has reduced in 2012. 3. Interest coverage ratio has also reduced which means firm is not in a position to pay

interest on dividends.
4. Ideal ratio is 2:1 and the current ratio is 3.10 which state the funds are utilized very

efficiently.
5. Debt equity ratio has increased which state the firm dependences has also increased. 6. It can be interpreted that the efficiency of the firm has decline and the profit is decline.

Moving Average Crossover of Barak Valley Cements

76

1. The current position (2012 2013) is of bearish trend. A stock must be sold here. 2. There is a crossover in mid-2009 i.e. a bullish trend, a stock must be buy.

J.K CEMENTS LIMITED

JK Lakshmi Cement, member of the JK Organization is a blue chip cement company operating in India. Launched in 1982, Lakshmi Cement, an ISO9001:2000 company, is built over an area of about 8 square kilometers at Jakaypuram in the Sirohi District of Rajasthan (24.690N 73.003E). It is a public company listed on the Bombay Stock Exchange.
77

As one of the large manufacturers in the Indian cement industry, JK Lakshmi Cement has acquired the ultra-modern equipment from Fuller International of the United States of America, and electronic packers from Ventomatic in Italy. The annual installed plant capacity was 3.4 million Tonnes per annum in 2007, but was being expanded to 5 million Tonnes per annum during 2008-9. JK Lakshmi Cement has offices in Rajasthan, Gujrat, Maharashtra, Punjab, Haryana, Delhi, Uttarakhand, Uttar Pradesh, Himachal Pradesh and J&K, along with stock dumps at various places in every state to ensure uninterrupted supply to customers. JK Lakshmi Cement produces Portland cement at grades 43 & 53 and Blended cement. It also produces Plaster of Paris in brand name of JKLAKSHMIPLAST and Ready mixed concrete. J K Lakshmi Cement claims to be the only cement in India that comes with the unique Mazbooti (Strength) Guarantee. SWOT ANALYSIS OF JK CEMENTS Strengths
1. Good brand image in the existing market. 2. Good plant having 10,000 Tonnes per day production capacity. 3. Location has been an important factor extensive Rajasthan

Weakness
1. Low sales as compared to market potential. 2. High complaints of quality deterioration in jk cements. 3. Monopoly of dealers is affecting the sales. 4. Less advertisement and negligible sales promotion schemes as compared to other brands.

Opportunities
1. More advertisement. 2. Competitive price. 3. Exposure of quality, which is already good but not displayed in the market.

Threats
1. Other companies advertising policies. 2. Price fluctuations and price war. 3. Increasing competition from global market.

78

Profit and loss Account of J.K Cements

Profit & Loss account of J. K. Cement 2012 2011 2010 2009 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 2,892.45 347.50 2,544.95 36.62 6.88 2,588.45 496.69 654.74 140.44 39.98 643.29 57.52 0.00 2,032.66 12 mths 2,652.09 290.74 2,361.35 21.97 16.84 2,400.16 440.20 554.33 127.48 40.76 881.25 67.22 0.00 2,111.24 12 mths 2,248.07 194.91 2,053.16 17.30 30.65 2,101.11 319.67 411.39 99.43 31.74 724.26 54.86 0.00 1,641.35 12 mths 1,876.45 212.03 1,664.42 16.75 5.23 1,686.40 254.99 376.23 87.30 21.44 564.95 40.33 0.00 1,345.24 ------------------- in Rs. Cr. ------------------2008 12 mths 1,812.85 217.28 1,595.57 22.73 -17.27 1,601.03 235.07 329.69 67.64 16.90 479.41 33.02 0.00 1,161.73

Interpretation: Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost 2012 2,892.45 347.5 2,544.95 36.62 6.88 2,588.45 496.69 654.74 140.44 Absolute 2008 change 1,812.85 217.28 1,595.57 22.73 -17.27 1,601.03 235.07 329.69 67.64
79

Percent increase or decrease 59.55264 59.93189 59.50099 61.10867 -139.838 61.67405 111.2945 98.59262 107.6286

1,079.60 130.22 949.38 13.89 24.15 987.42 0.00 261.62 325.05 72.80

Other Manufacturin g Expenses Selling and Admin Expenses Miscellaneou s Expenses Preoperative Exp Capitalised Total Expenses

39.98

16.9 23.08 136.568

643.29 57.52 0 2,032.66

479.41 163.88 33.02 0 0.00 1,161.73 870.93 74.96837 24.50 34.18368 74.19746

1. Net sales has increased by 59% in 2012 as compared to 2008. 2. Total income has increased by 61% (approx.) 3. Employee cost has increased by a large number 107.28% 4. Percent change in total expenses are more than the percent change in total income.

Profit & Loss Account Ratios 2012 Material Cost Composition 19.51 Imported Composition of Raw Materials 20.28 Consumed Selling Distribution Cost Composition 23.24 Expenses as Composition of Total Sales 1.07

2011 18.64 16.70 35.81 0.80

2010 15.56 16.82 33.46 0.99

2009 15.32 9.96 31.97 0.89

2008 14.73 -28.62 0.82

1. Expenses have increased in 2012 as compared to previous years.

Cash Flow of J. K. Cement

------------------- in Rs. Cr. ------------------80

2012

2011

2010

2009

2008

12 mths

12 mths

12 mths

12 mths

12 mths

Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

285.79 521.76 -144.53 -265.82 111.41 321.08 432.49

83.78 256.43 -280.04 213.01 189.41 131.67 321.08

311.26 258.00 -192.38 -79.57 -13.95 145.62 131.67

233.96 241.21 -82.35 -179.11 -20.24 145.44 125.20

346.57 380.46 -171.68 -255.88 -47.09 192.54 145.44

Net cash flow from operating activities

Year 2008 2009 2010 2011 2012

Net Cash From Operating Activities 380.46 241.21 258 256.43 521.76

81

Net cash flow from operating activities has increased in 2012 as compared to 2011. In 2010 and 2011 there is a constant rate of cash flow

Cash Flow Indicator Ratios 2012 Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times

2011 22.91 13.41 80.42 87.81 3.24 25.37 9.19 58.40 89.30 8.69

2010 21.67 15.72 78.00 84.10 3.32

2009 20.11 14.70 79.58 85.14 2.74

2008 15.42 13.35 84.58 86.65 1.56

1. Dividend payout ratio has reduced in 2012 as compared to 2011. 2. Earning retention ratio has increased in 2012. 3. It all indicated that the firm has decided to retain profit this year as compared to

previous years.

Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%)

20.40 15.18 15.46 12.85 12.85 6.84

82

11.30 6.46 6.53 6.36 6.36 2.68

21.55 17.21 17.38 14.85 14.85 10.89

19.49 16.20 16.34 11.47 11.47 8.47

26.10 23.20 23.53 18.92 18.92 16.38

Adjusted Net Profit Margin (%) 6.84 Return On Capital Employed (%) 18.59 Return On Net Worth (%) 13.75 Adjusted Return on Net Worth (%) 16.10 Return on Assets Excluding 184.32 Revaluations Return on Assets Including 218.66 Revaluations Return on Long Term Funds (%) 19.27 Liquidity And Solvency Ratios Current Ratio 1.03 Quick Ratio 0.81 Debt Equity Ratio 0.84 Long Term Debt Equity Ratio 0.77 Debt Coverage Ratios Interest Cover 3.05 Total Debt to Owners Fund 0.84 Financial Charges Coverage Ratio 3.92 Financial Charges Coverage Ratio Post 3.10 Tax Management Efficiency Ratios Inventory Turnover Ratio 20.35 Debtors Turnover Ratio 35.23 Investments Turnover Ratio 20.35 Fixed Assets Turnover Ratio 0.88 Total Assets Turnover Ratio 1.08 Asset Turnover Ratio 0.96

2.68 7.25 5.62 3.43 162.80 198.94 7.43 1.17 0.88 1.15 1.10 1.56 1.15 2.55 2.54 17.59 33.11 17.59 0.87 0.96 0.93

10.89 17.86 20.81 20.50 155.28 193.21 18.39 0.96 0.72 0.94 0.88 5.44 0.94 6.67 5.49 26.21 30.44 26.21 0.87 0.98 1.00

8.47 19.95 15.71 15.47 129.53 169.26 20.50 1.69 1.64 0.58 0.54 5.24 0.58 6.20 4.56 37.68 30.18 37.68 1.16 1.17 1.03

16.38 32.11 34.87 34.88 108.72 150.35 34.12 1.28 1.43 0.63 0.53 7.78 0.63 8.52 6.94 49.34 26.72 49.34 1.28 1.29 1.28

Interpretations:
1. Gross profit and net profit has increased in 2012 as compared to 2011. It shows the

efficiency of the firm has increased.

2. Return on capital employed has also increased in 2012 nearly 60 % as compared to

previous year.
3. Ideal current ratio is 2:1. But the current ratio has decline it is 1.03 as compared to 1.17 in

2011.
4. Company has made a huge profit this year and has paid more interest on its debt this year

as compared to previous years.

5. Inventory turnover ratio has also increased which indicate the demand for the product has

risen.

Moving average crossover of J.K Cement limited

83

Interpretations:
1. There is a crossover in mid-2009 and a stock must be buy this time. 2. There is a crossover again in end-2010 a bearish trend and exits till beginning-2012 and

continue till date. A stock must be buy this time.

PRISM CEMENT LIMITED

84

Prism Cement Limited is an ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, SA 8000:2008 & ISO 50001:2011 Certified Company. It operates one of the largest single kiln cement plants in the country at Satan, Madhya Pradesh. Equipped with state-of-the-art machinery and technical support from F.L Smidth & Co A.S Denmark, the world leaders in cement technology, Prism Cement has successfully created a niche for itself in the Indian cement industry. The Company is managed by a focused Board comprising of eminent experts from diverse fields ably supported by a professional management team. The Management team ensures high levels of transparency, accountability and equity in all facets of the companys operations. Vision To be acknowledged as a leading with the highest level of integrity. player in the industry

Mission

State of the art cement plants Transparent dealings with all stakeholders Committed to the principles of good corporate governance

Profit and Loss Account of prism Cements limited

Profit & Loss account of Prism Cement 2012 2011 2010 2009 ------------------- in Rs. Cr. ------------------2008

12 mths

12 mths
85

12 mths

9 mths

12 mths

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 2,175.78 719.03 222.99 160.60 865.05 113.82 0.00 4,257.27 Interpretations: Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost 2012 4,845.6 1 342.5 4,503.11 -7.64 33.49 4,528.9 6 2,175.7 8 719.03 222.99 2008 Absolute change 1,021.5 1 3,824.10 143.41 199.09 878.1 3,625.01 13.53 -21.17 -11.4 880.23 139.22 201.28 35.43 44.89 3,648.73 0.00 2,036.56 517.75 187.56
86

4,845.61 342.50 4,503.11 -7.64 33.49 4,528.96

3,564.45 200.18 3,364.27 26.40 25.01 3,415.68

2,992.89 157.51 2,835.38 -3.73 27.92 2,859.57

722.65 93.45 629.20 8.45 -3.73 633.92

1,021.51 143.41 878.10 13.53 -11.40 880.23

1,676.59 428.20 172.80 101.76 602.21 84.43 0.00 3,065.99

1,293.61 308.54 134.88 97.10 473.18 51.64 0.00 2,358.95

124.61 174.58 27.42 24.45 92.43 10.60 0.00 454.09

139.22 201.28 35.43 29.61 102.39 19.99 0.00 527.92

Percent increase or decrease 374.3576 138.8257 412.8243 -156.467 -393.772 414.5201 1462.836 257.2287 529.3819

Other Manufacturin g Expenses Selling and Admin Expenses Miscellaneou s Expenses Preoperative Exp Capitalised Total Expenses

160.6 865.05 113.82 0 4,257.2 7

29.61 130.99 102.39 762.66 19.99 0 0.00 527.92 3,729.35 706.4233 93.83 744.8579 469.3847 442.3843

1. Net sales has increased by 412.82% in 2012 as compared to 2008. 2. Total income has also increased by 414.82% in 2012 as compared to 2008. 3. Employee cost and selling and administrative expenses has also increases. 4. Total expenses are more as compared to total income in 2012 and in other years.

Profit & Loss Account Ratios Material Cost Composition 48.31 Imported Composition of Raw Materials 4.44 Consumed Selling Distribution Cost Composition 16.86 Expenses as Composition of Total Sales 0.64

49.83 2.13 15.20 0.60

45.62 1.98 13.73 0.62

19.80 -11.79 0.61

15.85 -9.07 0.55

Cash Flow of Prism Cement 2012 2011 2010 2009

------------------- in Rs. Cr. ------------------2008

12 mths

12 mths

12 mths

9 mths

12 mths

Net Profit Before Tax Net Cash From Operating Activities

-45.99 248.55
87

130.66 253.76

358.25 367.34

151.98 104.86

316.73 248.32

Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

-215.22 -37.71 -4.38 59.89 55.51

-435.76 189.62 7.62 52.28 59.90

-556.56 195.63 6.41 45.87 52.28

-60.34 -36.55 7.97 12.89 20.86

-174.50 -71.89 1.93 11.04 12.97

NET CASH FLOW FROM OPERATING EXPENSES Year 2008 2009 2010 2011 2012 Net Cash From Operating Activities 248.32 104.86 367.34 253.76 248.55

Net cash flow from operating activities are more in 2010(highest). In 2011 and 2012 net cash flow from operating activities are same. Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times 2012 -24.94 -77.47 8.00 2011 59.98 27.48 40.56 72.64 5.57 2010 49.12 36.17 54.51 65.84 2.22 2009 54.40 43.42 45.43 56.47 -2008 14.44 12.75 85.56 87.25 --

1. In 2009 there is a huge increase in dividend payout ratio as compared to 2008. 2. Earning retention ratio is highest in 2008.

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Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio

6.20 2.92 2.93 2.87 2.87 -0.66 -0.66 6.25 -2.61 -1.52 22.82 22.82 6.60 0.77 0.54 0.90 0.81 0.84 0.90 1.67 1.69 13.90 14.74 13.90 1.55 2.08 1.97

9.60 6.19 6.24 6.19 6.19 2.82 2.82 9.97 7.93 8.00 24.00 24.00 10.33 0.93 0.63 0.97 0.90 2.35 0.97 3.32 2.98 12.95 14.14 12.95 1.22 1.43 1.55

17.78 14.53 14.61 12.65 12.65 8.80 8.80 21.85 21.46 23.17 23.23 23.23 22.64 0.87 0.61 0.69 0.63 8.92 0.69 9.91 7.49 14.81 13.43 14.81 1.61 1.45 2.15

27.23 23.07 23.37 18.86 18.86 15.09 15.09 23.45 14.54 14.49 22.18 22.18 23.45 0.80 0.42 --102.79 -50.71 35.05 26.28 372.31 26.28 0.86 0.96 0.98

38.58 34.40 34.94 30.67 30.67 27.09 27.09 51.88 39.11 39.10 20.71 20.71 51.88 0.79 0.35 --218.05 -92.03 72.43 31.66 252.69 31.66 1.25 1.44 1.25

1. The overall ratio indicate the performance of the firm has reduced. 2. The gross profit and net profit has been reducing in 2012 as compared to

previous years.
3. Inventory turnover ratio has increased which shows that the demand for the

product has risen.

89

4. Debt equity ratio has reduced in 2012 as compared to 2011. 5. Return on capital employed has been reducing from 2008 to 2012. 6. Current ratio is also decreasing. It means the funds are not been utilized

properly.

Moving average crossover of Prism Cements

1. There is a crossover in the beginning -2008 indicating bearish trend and a

time to sell the stock.

2. A crossover happens again in mid-2009 indicating a bullish trend and a time

to buy a stock.
3. In 2011 a bearish trend exits and stock must be sold in it. 4. In beginning 2012 a crossover happens and a time to buy the stocks. 5. In 2013 beginning crossover happens and a bearish trend and stock must be

sold.

90

Madras Cements Limited

Company Overview Madras Cements Ltd is the flagship company of the Ramco Group, a well-known business group of South India. It is headquartered at Chennai. The main product of the company is Portland cement, manufactured in five state-of-the art production facilities spread over South India, with a current total production capacity of 13.0 MTPA. The company is the fifth largest cement producer in the country. Madras cement is the most popular cement brand in South India. The company also produces Ready Mix Concrete and Dry Mortar products, and operates one of the largest wind farms in the country.

91

Profit and Loss Account Of Madras Cement Limited (2008 to 2012)

Profit & Loss account of Madras Cements 2012 2011 2010 2009 ------------------- in Rs. Cr. ------------------2008

12 mths

12 mths

12 mths

12 mths

12 mths

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 626.82 730.38 200.55 36.33 691.98 21.36 0.00 2,307.42 579.39 660.74 169.64 32.27 561.06 2.89 0.00 2,005.99 595.75 596.25 165.24 27.72 547.73 14.57 0.00 1,947.26 553.00 602.18 138.66 15.07 458.62 8.81 0.00 1,776.34 390.63 407.91 113.43 9.73 340.97 4.91 0.00 1,267.58 3,703.51 429.94 3,273.57 4.27 0.46 3,278.30 2,971.56 350.85 2,620.71 25.70 17.44 2,663.85 3,115.21 308.03 2,807.18 10.95 7.20 2,825.33 2,905.58 376.34 2,529.24 15.88 25.07 2,570.19 2,335.67 330.35 2,005.32 15.16 9.58 2,030.06

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Interpretations Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturin g Expenses Selling and Admin Expenses Miscellaneou s Expenses Preoperative Exp Capitalised Total Expenses 2012 Absolute 2008 change 1,367.84 99.59 1,268.25 -10.89 -9.12 1,248.24 0.00 236.19 322.47 87.12 Percent increase or decrease 58.56307 30.14681 63.24427 -71.8338 -95.1983 61.48784 60.46387 79.0542 76.80508

3,703.5 2,335.67 1 429.94 330.35 3,273.5 2,005.32 7 4.27 0.46 15.16 9.58

3,278.3 2,030.06 0 626.82 730.38 200.55 36.33 390.63 407.91 113.43 9.73

26.60 691.98 21.36 0 340.97 351.01 4.91 0 0.00 2,307.4 1,267.58 2 Interpretations:
93

273.3813

102.9445 335.0305

16.45

1,039.84

82.03348

1. Total income has increased by 61.48% in 2012 as compared to 2008. 2. Total Expenses has increase by 82.03% 3. Sales turnover are showing a positive trend, it only came down in 2011. 4. Net sales are increased by 64%

Profit & Loss Account Ratios 2012 2011 Material Cost Composition 19.14 Imported Composition of Raw Materials 2.15 Consumed Selling Distribution Cost Composition 19.02 Expenses as Composition of Total Sales 0.42

22.10 1.43 18.91 0.07

2010 21.22 4.33 17.94 0.16

2009 21.86 4.08 16.19 --

2008 19.47 2.50 15.34 --

Cash Flow of Madras Cements 2012 2011 2010 2009

------------------- in Rs. Cr. ------------------2008

12 mths

12 mths

12 mths

12 mths

12 mths

Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

557.52 863.79 -552.24 -329.22 -17.67 37.28 19.61

297.18 626.31 -693.37 71.48 4.42 35.60 40.02

530.33 681.35 -566.83 -117.52 -3.01 38.61 35.60

545.77 639.34 -1284.29 660.62 15.67 22.94 38.61

616.79 475.76 -1310.51 801.12 -33.63 56.57 22.94

NET CASH FLOW FROM OPERATING ACTIVITES

94

Year 2008 2009 2010 2011 2012

Net Cash From Operating Activities 475.76 639.34 681.35 626.31 863.79

Net cash flow from operation is highest in 2012 as compared to previous years.

Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times Interpretations:

2012 2011 17.97 10.83 82.47 89.33 3.26

16.41 8.01 83.42 91.94 6.50

2010 15.75 10.13 84.25 89.87 4.67

2009 15.33 11.12 84.70 88.90 4.91

2008 13.76 11.20 86.21 88.78 3.27

1. A firm has more dividend in 2012 as compared to previous years.

2. Earning retention ratio has decrease in 2012 because firm opted to pay more dividend. Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio 29.52 21.68 21.77 19.73 19.73 11.71 11.71 17.44 18.78 19.26 86.16 86.16 20.45 0.38 0.34 1.03
95

24.12 15.55 15.69 16.24 16.24 7.97 7.97 9.60 12.36 12.22 71.73 71.73 10.13 0.69 0.60 1.61

30.88 23.81 23.90 19.50 19.50 12.55 12.55 16.53 23.01 23.01 64.58 64.58 17.70 0.70 0.64 1.65

30.75 25.14 25.31 19.72 19.72 14.27 14.27 17.64 29.22 29.29 52.26 52.26 19.53 0.60 0.63 1.95

37.26 32.38 32.61 24.78 24.78 20.21 20.21 25.80 42.93 42.83 798.87 798.87 32.78 0.56 0.70 1.71

Long Term Debt Equity Ratio 0.73 Debt Coverage Ratios Interest Cover 4.58 Total Debt to Owners Fund 1.03 Financial Charges Coverage Ratio 6.16 Financial Charges Coverage Ratio Post 5.01 Tax Management Efficiency Ratios Inventory Turnover Ratio 16.82 Debtors Turnover Ratio 16.63 Investments Turnover Ratio 16.82 Fixed Assets Turnover Ratio 0.58 Total Assets Turnover Ratio 0.80 Asset Turnover Ratio 0.75

1.47 3.12 1.61 4.69 4.09 18.18 15.50 18.18 0.50 0.58 0.50

1.47 4.52 1.65 5.79 4.63 23.84 22.89 23.84 0.58 0.68 0.58

1.67 5.97 1.95 7.18 5.53 23.00 33.41 23.00 0.65 0.68 0.65

1.14 12.93 1.71 14.52 10.56 37.03 31.59 37.03 0.74 0.77 0.74

Interpretations:
1. Profit has increased in 2012 as compared to previous years. 2. Debt equity ratio has also decrease which shows the firm dependency on debt

has reduced.
3. Firm has more interest on his debt in 2012 4. Inventory turnover ratio is lowest of previous years which is a positive sign and

shows that the frim demand for product has rise.

Moving average crossover

96

1. There is a crossover in early-2008 which shows a bullish trend and continue till

mid-2009.
2. In mid - 2009 a crossover happens and show a bearish trend. 3. In 2010 two crossover happen showing a bearish trend. 4. In beginning of January a bearish trend happens and continue till end 2011. 5. 2012 is a perfect time to buy a stock. It is full of bullish trend.

97

Comparison of all companies on the basis of Percentage change in total income (2008 to 2012)

Company name ACC Limited Ambuja Cememt Ultra Tech India Cements limited Shree Cements Limited Aditya Birla Cement Barak Valley Cements Prism Cements Madras Cements J.K Cements

Percent Change in total income 50.57 48.98 230.5 37.5 181.28 31.81 30 414.52 61.48 61.67

1. Prism cement has highest percentage Change from 2008 to 2012. 2. Barak Valley has lowest percentage Change.

98