SWOT Analysis

• Strengths – High brand identity; Lower energy cost due to imported

higher calorific value coal; Favorable locations of factories near raw
materials site.
• Weaknesses – High transportation cost due to increased transport
through sea router for bulk shipping; supply surplus causes decrease
in prices.
• Opportunities – Easy loan availability for housing finance; increased
govt. outlay on Bharat Nirman, Golden Quadrilateral ,etc.
• Threats – Threats from economic cycles; exchange rate fluctuations;
change in govt policies; use of plastic engineering in construction.
 PEST Analysis
• Political – Govt controls coal rates, tariffs, freights, etc.; Govt is also
one of the biggest consumers of cement, state govts. In order to
attract investments offer fiscal incentives.
• Economy – Increase in per capita income; per capita consumption of
cement in India is less than half the world average but on the rise
with penetration in tier 2 and tier 3 cities and urbanization.
• Social – Presence of organized and unorganized cement market in
India; consumers prefer buying branded cements; with increase in
population cement industry is on the boom.
• Technological – Wet process is being replaced by dry process;
enhanced technology required to substitute coal with biomass.
 Porter’s Five Forces
• Threat of New Entrants (Low) – High capital investment; requires
robust distribution network; oversupplied market dealers; technology
and manpower easily available.
• Threat of substitutes (Medium) – Bitumen in road; use of
engineering plastics in construction.
• Industry Rivalry (High) – Large number of players; low product
differentiation; high storage costs and high exit barriers.
• Bargaining power of buyers (Medium) – Supply surplus leads to
decrease in costs; declining share of bulk purchase
• Bargaining power of suppliers (High) – Monopolistic control of
external cost element (coal, power, transportation) result in high
bargaining power of the government
 Top 5 cement companies in India
Cement Companies Net Sales in FY 2017-18 (in crs)

Ultratech 29790.10

ACC 13284.60

Ambuja Cements 10446.85

Shree Cements 9833.10

India Cements 5340.72

 STP for Ambuja Cement Products
Ambuja Cement Ambuja PowerCem Ambuja Railcem

Segmentation Consumer wise Consumer wise Consumer wise

Geographically Geographically

Targeting Middle Class Upper middle class Indian Railways

households and higher class
households
Positioning Giant Compressive Giant Compressive Giant Compressive
Strength and strength and strength
affordable premium
 BCG Matrix
MARKET SHARE
HIGH LOW

HIGH

M
A Ambuja Cement Ambuja Cement Cool walls
R Ambuja Powercem
K
E
T

G
R Ambuja Railcem
O
W
T
H

LOW
 Ansoff Matrix
PRODUCT
EXISTING NEW
EXISTING

Ambuja Technical Services

Ambuja Cement Expert
Ambuja BuildCem Cement Ambuja Plus Cool walls
M
A
R
K
E
T
Ambuja PowerCem
Ambuja RailCem

NEW
 Financial Findings
• Company’s current assets have reduced by 194.3 crs due to reduction
in investment in inventory and increased sundry debtors.
• The company has reduced its investment in overall net working
capital by 30%.
• Sales have declined from previous year about 1.8%.
• The cash cycle has reduced from 90 days to 31 days.
 Conclusion
• Ambuja Cement is the 3rd largest cement company in India.
• Due to saturation of cement market it has introduced new products
like Railcem and Powercem.
• Its sales over the years is almost constant.
• The Board of Directors has recently initiated a study to explore the
possibility of a merger between the Company and ACC Limited, which
could enable both the companies to combine their strengths of
business so as to benefit all the stakeholders.
• Founded in 1988
• Founder and Chairman – Gautam S Adani
• Head quarters in Ahmedabad
• Adani Enterprises Limited primarily engages in trading, energy, real estate and agro-related
operations.
• It involves in trading edible oils; and agro-commodities, including food grains, castor oils, pulses,
soya meals
• Largest Private Thermal Power Producer in India.
• Operator of largest port in India.
• Largest edible oil refining company in India.
• Largest Coal trader in India.
Financial Findings
 SWOT Analysis
Strength
• The diversified Nature
• Good Distribution channel
• Highly qualified engineering and technical
personnel.
Opportunities
• Diversification can be done into
hydroelectric power.
• 100% FDI in all sectors allowed
• Can expands its operations and compete
with other competitors.
Weakness
• Delay in coal supply
• Present only in few states
• Non-availability of quality coal may hamper
thermal plants’ efficiency in power
generation
Threats
• Fluctuation in International Prices of Coal.
• Increases in private sector power
generation.
• Changes in International policies regarding
Impact of Coal.
 Relative Market Share
High Low
High STARS Question Marks

POWER GENERATION
Agro Products ( Fortune Oil ) Power Transmission
?
Market Growth Rate

Port and Logistics Infrastructure development

Cash Cows Dogs

Coal Trading
Power trading

Low
 Competition Analysis
• Tata Power :- Tata Power has a
presence in all segments –Thermal ,
Hydro , Solar , Wind , Transmission
& Distribution.
• They are implementing cost
reduction strategies to emerge as a
low cost power producer.
• NTPC :- It is the largest PSU power
company with presence in the
entire value chain of the power
generation business ,backed by GOI,
which has a shareholding of 84.5%.
• They have diversified power
projects comprising 56% coal , 16%
Gas , 11 % Nuclear and 17 %
Renewable sources.
 Pestle Analysis Factors
Political • Regulatory developments in grid and market
integration of Renewable Energy.
• Growing private sector Interest in RE.
• Availability of Funds.
Economic • Increasing prices of oil.
• Increasing Energy demand Supply gap.
• Increasing pressure on availability of conventional
fuel sources such as coal.

Socio - Cultural • Significant potential of Employability

Technological • Technology break –through in Solar.

• Development of storage technology.
Environmental • Decreasing Domestic coal allocations.

Legal • National Action plan on climate change.

 Mckinsey 7s -
• Strategy: Integrated yet independent business model.
• Structure: Heirarchial structure spread over three verticles namely
resources, logitics and power.
• Systems: Growth opportunities to develop leadership and functional
capabilities.
• Shared Values: Maintaining shareholder interest and improving quality of
human capital and prime focus on employee retention.
• Style: Embrace new ideas and businesses, believe in the employees and
other stakeholders & stand by the promises and adhere to high standards of
business.
• Staff: More than 11000 employees striving to make a brand.
• Skills: Aquainted with technology and improvised methods and skills.
Problem Encountered
• Though Adani has always been vocal about their commitment
towards the society they have been facing an allegation of illegal coal
mining for which they are facing charges under the court of law.
• They have also got into issues like illegal land encroachment in SEZ in
Mundra.
• The Adani Group has not been able to create shareholder satisfaction
and this is evident by the fact that the group has lost 14 to 24 percent
of their wealth and their debt has increased to around Rs 70,000
crores.
Future Diversification :
• Adani Group already has the presence in power and they are planning to
move to hydroelectric or wind power also they will increase their solar
power and edible oil portfolio.

Merger and Aquisition –

• Adani Transmission Ltd, part of the Adani Group completed the
acquisition of Reliance Infrastructure’s integrated business of power
generation, transmission and retail distribution.
• Adani Group may acquire Shree Renuka Sugars from Wilmar
• Saab ties up with Adani to bid for fighter jet deal in India
Conclusion
• Adani is engaged not only in Power, it was originally envisaged for
power generation, however it has already invested in coal mines,
Solar etc. It's subsidiary companies (SPVs) has 4 Thermal Power Plants
already in Operation, out of which 3 are under extension phase while
other 4 new TPPs are coming. Moreover, APL has also captured TPPs
of Avantha and Welspun. In near future it will also supply power to
Neighboring countries of India.
• Hence, the future of Adani of being a Leader in Thermal Power
Plants in India tackling all hurdles and so is working on it's proper
path.