OBJECTIVES AND THE SCOPE OF THE PROJECT

Objective : To assess and recommend Market outlook and estimation of demand

of dry mix mortar for AAC masonry in Western India.

To study the position of conventional mortar in construction using AAC
Blocks masonry
To forecast the consumers requirements and to study the consumers
preference of mortar by collecting the data through questionnaire
To determine the consumers buying attitudes towards dry mix mortar
To determine the satisfaction level of consumer to the product features
and various aspects of dry mix mortar available in the market
To determine the usage of the product

































OVERALL ANALYSIS


























S.NO. CATEGORY OF RESPONDENTS FREQUENCY PERCENTAGE
1 Architect 2 6%
2 Consultant 2 6%
3 Developer 19 58%
4 Contractor 8 24%
5 Others 2 6%
33 100%
INFERENCE
From the above bar diagram, we interpret that 58% of respondents are developers,
24% are Contractors and 6% each are Architects, Consultants & Others
TOTAL
TABLE 1: CATEGORY OF RESPONDENTS
CHART 1: CATEGORY OF RESPONDENTS
6% 6%
58%
24%
6%
0%
10%
20%
30%
40%
50%
60%
70%
Architect Consultant Developer Contractor Others
RESPONDENTS
RESPONDENTS







S.NO. PRICE (In Rs.) FREQUENCY PERCENTAGE
1 10 3 9%
2 16 15 43%
3 18 8 23%
4 20 1 3%
5 22 0 0%
6 Others 8 23%
35 100%
INFERENCE
From the above bar diagram, we interpret that 43% of the respondents are
willing to pay Rs. 16 for Thin Bed Dry Mortar while 23% are willing to pay Rs. 18.
TABLE 2: RESPONDENTS ON PRICING
TOTAL
CHART 2: RESPONDENTS ON PRICING
9%
43%
23%
3%
0%
23%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
10 16 18 20 22 Others
PRICE
PRICE






S.NO. BAG SIZE (In Kgs.) FREQUENCY PERCENTAGE
1 10 0 0%
2 15 1 3%
3 20 7 22%
4 25 15 47%
5 30 9 28%
32 100%
INFERENCE
From the above bar diagram, we interpret that 47% of the respondents are in favour of
bag size of 25 Kgs, while 28% prefer 30 Kg and 22% prefer 20 Kg Bag Sizes.
TABLE 3: RESPONDENTS ON PREFERENCE FOR BAG SIZE
TOTAL
CHART 3: RESPONDENTS ON PREFERENCE FOR BAG SIZE
0%
3%
22%
47%
28%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
10 15 20 25 30
BAG SIZE
BAG SIZE








S.NO. SHELF LIFE FREQUENCY PERCENTAGE
1 6 Months 8 27%
2 9 Months 11 37%
3 1 Year 8 27%
4 More than 1 year 3 10%
30 100%
INFERENCE
From the above pie chart, we interpret that 37% of the respondents want a shelf
life of 9 Months.
TABLE 4: RESPONDENTS ON PREFERENCE FOR SHELF LIFE
TOTAL
CHART 4: RESPONDENTS ON PREFERENCE FOR SHELF LIFE
27%
37%
27%
10%
SHELF LIFE
6 Months
9 Months
1 Year
More than 1 year




S.NO. POT LIFE FREQUENCY PERCENTAGE
1 2-3 Hrs 11 37%
2 3-4 Hrs 12 40%
3 4-5 hrs 5 17%
4 More than 5 Hrs 2 7%
30 100%
INFERENCE
From the above pie chart, we interpret that 40% of the audience would like
to have a pot life of 3-4 Hrs while 37% wants a pot life of 2-3 Hrs.
TABLE 5: RESPONDENTS ON PREFERENCE FOR POT LIFE
TOTAL
CHART 5: RESPONDENTS ON PREFERENCE FOR POT LIFE
37%
40%
17%
7%
POT LIFE
2-3 Hrs
3-4 Hrs
4-5 hrs
More than 5 Hrs




Frequency % Frequency % Frequency % Frequency %
1 18 69% 6 23% 1 4% 3 12%
2 2 8% 9 35% 8 31% 2 8%
3 1 4% 3 12% 7 27% 4 15%
4 3 12% 3 12% 4 15% 2 8%
5 0 0% 3 12% 2 8% 3 12%
6 0 0% 2 8% 3 12% 10 38%
7 0 0% 0 0% 1 4% 2 8%
8 2 8% 0 0% 0 0% 0 0%
TOTAL 26 100% 26 100% 26 100% 26 100%
INFERENCE
From the above Bar Chart, we can draw the following Infrerences:
Most of the Customers give first preference to Cost, then to bond Strenth followed by Minimum
Wastage and Durability.
TABLE 6: RESPONDENTS ON FACTORS INFLUENCING PURCHASE
CHART 6: RESPONDENTS ON FACTORS INFLUENCING PURCHASE
Cost Bond Strength Min. Wastage Durability
RANKING
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
1 2 3 4 5 6 7 8
COST
BOND STRENGTH
MINIMUM WASTAGE
DURABILITY
RANKING

INFERENCE


From the study it is found that 59% of respondents are developers, 24% are
Contractors and 6% each are Architects, Consultants & Others.

Further, we interpret that 43% of the respondents are willing to pay Rs. 16 for
Thin Bed Dry Mortar while 23% are willing to pay Rs. 18 on an Overall
perspective.


53% of the respondents in Mumbai & Pune region are in favour of bag size of 25
Kgs while 40% of the respondents in Gujarat Region are in favour of bag size of
25 Kgs.

According to the Study:
44% of the respondents of Mumbai & Pune Region wants a shelf life of 6 Months
while 31% desire a shelf life of 9 Months.
43% of the respondents in Gujarat Region want a shelf life of 9 Months/ 1 Year.

From the Study it is interpreted that:
60% of the audience in Mumbai & Pune region would like to have a pot life of 2-
3 Hrs while 20% wants a pot life of 3-4 Hrs.
60% of the audience in Gujarat Region would like to have a pot life of 3-4 Hrs
while 20% wants a pot life of 4-5 Hrs.

Most of the Customers give first preference to Cost, then to bond Strength
followed by Minimum Wastage and Durability.



Based on the above research, we recommend the following:
AAC manufacturing is a growing industry in India with a CAGR of Approx. 30%.
Thin Bed Dry Mortars demand is directly linked to growth of AAC and Cement.
Since, both these sectors are growing, hence there is huge scope of growth of Thin
Bed Dry Mortar.
Considering that freight cost involved in transportation of the product is high, Mortar
plant should be in proximity to its target customers.
Further, we recommend that Mortar should be supplied along with AAC Blocks of
Biltech so as to provide freight cost advantage.
Based on the above study, we recommend that a Plant of Mortar should be setup
near Bhigwan Plant of Biltech as a Pilot Project. Once the same is Successfully
Implemented, we can replicate the same to other four Manufacturing Units.




















Indicative Financials

Assumptions

2015 2016 2017 2018 2019

Capacity MT 6000 6000 6000 6000 6000
Capacity Utilization % 50% 65% 80% 95% 95%

Average Selling Price Per Kg 16.00 16.64 17.31 18.00 18.72
Variable cost Per Kg 12.20 12.81 13.45 14.12 14.83

Inflation
Revenues 4% 4% 4% 4%
Variable Cost 5% 5% 5% 5%
Salaries & Wages 10% 10% 10% 10%
Other Fixed Cost 5% 5% 5% 5%

Depreciation rate ( WDV) 15.0% 15.0% 15.0% 15.0% 15.0%
Tax Rate 30.0% 30.0% 30.0% 30.0% 30.0%
Interest Cost 13.5% 13.5% 13.5% 13.5% 13.5%












Project Summary
Investment (INR Lakhs)
Land Cost 100.00
Plant & Machinery 65
Legal Compliances 5
170.00

Sources of Fund
Equity (20%)

34
Debt (80%)

136
170




















Income Statement

(INR Lakhs)
Income Statement 2015 2016 2017 2018 2019

Revenue 480.0 649.0

830.7

1,025.9 1,066.9

Cost
Manufacturing Cost 366.0 499.6

645.6

805.0 845.3
Salaries & Wages 20.0 22.0 24.2

26.6 29.3
Fixed Cost 36.0 37.8 39.7

41.7 43.8
Total Cost 422.0 559.4

709.5

873.3 918.3

EBIDTA 58.0 89.6

121.2

152.6 148.6
% 12% 14% 15% 15% 14%
Depreciation 25.5 21.7 18.4

15.7 13.3

EBIT 32.5 67.9

102.7

136.9 135.3
Interest 18.4 16.1 11.5

6.9 2.3
PBT 14.1 51.8 91.3

130.0 133.0
Tax 4.2 15.5 27.4 39.9
39.0
PAT 9.9 36.3 63.9

91.0 93.1














Balance Sheet

(INRLakhs)
2015 2016 2017 2018 2019

Equity 34.0 34.0 34.0 34.0 34.0
Reserve & Surplus 9.9 46.2 110.1 201.1 294.2
Net worth 43.9 80.2 144.1 235.1 328.2

Long Term Debt 136.0 102.0 68.0 34.0 -

Total Debt 136.0 102.0 68.0 34.0 -

Total 179.9 182.2 212.1 269.1 328.2


Gross Block of Fixed Assets 170.0 170.0 170.0 170.0 170.0
Accumulated Depreciation 25.5 47.2 65.6 81.3 94.6
Net Fixed Assets 144.5 122.8 104.4 88.7 75.4

Current Assets
Cash 15.5 33.1 74.9 140.9 212.9
Debtors 46.0 62.2 79.7 98.4 102.3
Other Current Assets 72.0 97.3 124.6 153.9 160.0
133.5 192.7 279.2 393.2 475.2

Current Liabilities
Trade Payable 50.1 68.4 88.4 110.3 115.8
Other Current Liabilities 48.0 64.9 83.1 102.6 106.7
98.1 133.3 171.5 212.9 222.5

Net Current Assets 35.4 59.4 107.7 180.3 252.7

Total 179.9 182.2 212.1 269.1 328.2









Cash Flow Statement

(INR Lakhs)

2015 2016 2017 2018 2019

EBIDTA

58.0 89.6 121.2 152.6 148.6
Interest

(18.4) (16.1) (11.5) (6.9) (2.3)
Tax

(4.2) (15.5) (27.4) (39.0) (39.9)
Adjustment for Working Capital Change

(19.9) (6.3) (6.5) (6.6) (0.5)
Cash flow from Operations

15.5 51.6 75.8 100.0 105.9


Purchase of Fixed Assets

(170.0)
Cash flow from Investing Activities

(170.0) - - - -


Infusion of Equity

34.0
Long Term Loan raised

136.0
Short Term Loan raised
Repayment of loan - (34.0) (34.0) (34.0) (34.0)
Cash flow from Financing Activities

170.0 (34.0) (34.0) (34.0) (34.0)


Opening Cash - 15.5 33.1 74.9 140.9
Net Cash flow

15.5 17.6 41.8 66.0 71.9
Closing Cash

15.5 33.1 74.9 140.9 212.9












RATIO ANALYSIS

2015 2016 2017 2018 2019

Revenue Growth NA 35% 28% 24% 4%

EBIDTA % 12.1% 13.8% 14.6% 14.9% 13.9%

EBIT % 6.8% 10.5% 12.4% 13.3% 12.7%

PAT % 2.1% 5.6% 7.7% 8.9% 8.7%

ROCE 18% 37% 48% 51% 41%

ROE 23% 45% 44% 39% 28%
Interest Cover

3.16

5.58

10.56

22.16

64.75
Current Ratios

1.36

1.45

1.63

1.85

2.14
IRR 26.4%
Payback Period 3.07 Years














SENSITIVITY ANALYSIS w.r.t. IRR


Capacity -2015
26% 40% 50% 60.0% 70.0% 80.0%
A
S
R

14.6 -9% -7% -5% -3% -1%
15.0 2% 4% 7% 9% 12%
16.0 23% 26% 30% 34% 38%
17.0 40% 45% 50% 55% 61%
18.0 55% 61% 67% 75% 82%


Capacity -2016
26% 50% 60% 65.0% 75.0% 85.0%
A
S
R

14.6 -10% -8% -7% -6% -4%
15.0 1% 3% 4% 6% 8%
16.0 23% 25% 26% 29% 31%
17.0 40% 43% 45% 47% 50%
18.0 56% 59% 61% 64% 67%