TEJASWI KNS

ACC LIMITED 2014

Company Year End: December 31st, 2014

Macroeconomic review

Indian economic growth in 2014 rose to ~5.2% from 4.7% last year as a result of the improving macro-economic
situation
The wholesale and consumer price inflation has fallen to ~4.2% and 7.4% from last years 6.3% and 10.1% on the back
of falling oil prices, lower food and commodity prices and the proactive measures taken by the Government. However
there was lack of impetus in infrastructure projects

Industry review

Indian Cement Industry has an installed capacity of ~360 million tonnes and the domestic consumption in the calendar
year 2014 was 264 million tonnes. Overall volumes growth at 6 % owing to demand primarily in housing and
infrastructure areas
Operating EBITDA margins decreased to 13.74% from 15.73% due to upward movement in prices of raw materials (
mainly Fly ash), coal ( due to shortage in rakes and increased usage of imported coal) and Freight& Forward expenses
on account of railway freight increase

Key Highlights

Ranked as No. 1 in Indias Most Admired Companies in cement sector by the Fortune hay group India survey
Sales volumes increased by a nominal growth of 1.2% compared to industry growth at 6%.This may be due to losing
market share to new competitors
EBITDA down by 31% and EBITDA margins down to 13% from 15% due to increase in Freight cost by 9% and 10.4%
increase in raw material cost - Fly ash cost increased by 11%
Slag prices reduced by 17% which have offset the major increase in other input cost
Coal blocks allocated to Madhya Pradesh were cancelled by Supreme court on September 24, 2014
Coal cost for kiln increased by 3.6% due to drop in supply linkage coal procurement in view of shortage of rakes
Coal cost for captive power plants increased by 10% mainly due to the limited availability of CPP grade linkage coal
and resulting in higher procurement of e-auction / imported coal
PAT increased 64% to Rs.3.2 billion due to Rs.1.9billion tax credit and Rs.133 million interest write back
Capital expenditure incurred due to ongoing Jamul and Sindri projects in Chhattisgarh
Long term borrowings of Rs.350 million was paid off during the year, company has redeemed debentures of 32 crore
P/E at high of 22x at the end of year compared to 18x in last year, P/B at 3.1x

4th Quarter Results & Future Outlook

Limestone operations at Chaibasa and Baragh which support 4 million ton cement volume are shut on state
government order which results in freight charge increase of Rs.83 per ton
Restart of these limestone mines are expected after MMDRA amendment ordinance
Volumes and earnings growth can improve in 2015 due to boost in Infrastructure budget and reduction of raw material
cost
Holicim-Lafarge merger can create uncertainty among staff due to pressure on headcount reduction

Source: Company Annual report 2014

TEJASWI KNS

Source: Company Annual report 2014

ACC LIMITED 2014