Industry Research Template Cement

This template is a tool to help you assess an industry in detail.
Most often, while analysing an industry, we get stuck in term

understand what data needs to be found. This template tries to solve that problem.
Any financial research, or research for that matter, is a series of questions. A good researcher should be able to ask the right s
would automatically follow. This template tries to build a question framework, which can be used and mastered over a period o
do.
Try and find answers to the first set of questions, and then move to the next set. As your keep answering all these, you will
understanding of the industry and its companies would improve considerably.
Try it out, and spend a couple of hours on this. Maybe form a group, and then do it. It should be fun. Needless to say, if you ge
with us. Thanks.
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Register for "The art of stock picking and long term investing" workshop
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ndustry, we get stuck in terms of not being able to
solve that problem.
uld be able to ask the right set of questions. Answers

nd mastered over a period of time on all research you
nswering all these, you will soon realize that your

ve considerably.
n. Needless to say, if you get stuck anywhere, connect

FinShiksha
Summary
Company 1 Company 2
Industry Nuances Overall
Core Sector Growth vs Growth in Cement Output

Limestone Procution in India
India Per Capita Consumption
World Per Capital Consumption
Usage of Various Cement
In which Sector
Demand in that Sector
Cement Manufacturing Process In general for variety of cement
Overall Supply for India

Regional Supply (India) for India
North for India
South for India
West for India
East for India
Central for India
Global Production Capacities

Major Player 1
Major Player 2
Major Player 3
Overall Production
Capacity Addition (over the last 5 years)
Capacity Addition planned (over the next 2-3 years)
Import Amount
From Countries and List All
Export Amount
To Countries and List All
Company Specific Data

Company 1 Company 2
Types of Cement
Grey Cement
White Cement
Overall Production
Capacity Addition (over the last 5 years)
Capacity Addition planned (over the next 2-3 years)
Regional Supply (by Companies)

North
South
West
East
Central
Revenue
EBITDA
Cost Analysis
Power and Fuel Cost
Freight Cost
Raw Material Cost
Cost Analysis (as % of revenues)

Power and Fuel Cost
Freight Cost
Raw Material Cost
Capacity Utilization
Captive Power Capacity installed (MW)
Power Utilization (approx. need is 80-90 KWh/tonne) 1 MW = 1000 X 365 X 24 kWh

Grid Power
Captive Power
Per tonne Analysis

Revenue
Raw Material
Power
Freight
Fuel
EBIDTA Realization
Market Share in India
Workforce (mostly contractual)
Growth Rate of Last 5 Years in

Sales
Profit
Quantity Produced
Debt
Average of last 2-3 Years
Profit Margin
Asset Turnover
Capex/Revenue
Export % of Sales
Company Comparison
Sales
Profit
Quantity Produced
Debt
Profit Margin
Asset Turnover
Capex/Revenue
Export % of Sales
Production Capacity to be Increased (through acqusition or capex)
Utilization rate
Estimated cement realisation
Capex Requirment
Dealers (accurate data may not be available)

Dealership Network
Dealership Benefits provided (margins etc.)
Other Pointers
Govt. Policy Impact
Tax Structure
Transit Impact due to Road Infra (lead time)
MNREGA or Minimum Wage Impact Exact impact is not known but some
Urbanization Impact assumptions can be made here.
Taxation Impact
Pradhan Mantri Awaas Yojana - Gramin scheme
Affordable Housing Fund
Valuation Parameters for Consideration
Important to know all these

parameters
Industry Capacity growth
Industry Capacity (Utilization)
Capacity Growth Important to know all these
Production (Utilization) parameters
Margin Improvement, if any
Export Growth
Cement realization
Contact +91 91373 14913
Company 3
Overall Register for "The art of stock picking and long term investing" workshop
for variety of cement
for India
for India
for India
for India
for India
for India
for India
Company 3
000 X 365 X 24 kWh

is not known but some
ns can be made here.
nt to know all these

parameters
shiksha.com
sting" workshop
Pointers to remember for Cement Industry:
1. India is one of the largest producer of Cement but one of the lowest per capita consumer
2. Supply chain and distribution is very crucial for Cement. Identify how it adds value.
3. Pricing Strategy is very important in Cement. Understand the Pricing Strategy.
4. Some of the companies manage Debt exceptionally well. Understand the nuances.
5. Limestone is important for the production. Price fluctuation will impact the entire cost structure.
6. Cement production is a power consuming process. So understand the power usage and production done by companies.
7. Return ratios are very important for Cement like ROE, ROCE etc.
8. Cement is a localized business, so the dynamics can be regional. A player in south may not be strong in north
9. Production capacity numbers may or may not be given directly. One must look for Industry Reports from other companies (B
10. Freight cost is a major cost
Contact +91 91373 14913
duction done by companies.
e strong in north
Reports from other companies (Buy/Sell side reports, Credit rating companies)
Questions to be answered
1. Who are the major players?
2. Do you have the company and financial details about major players?
3. Is there any market regulator overseeing the business?
4. Do you know what kind of products companies in this industry offer?
5. How do they make money?
6. What do you think will be major costs for this industry?
Contact +91 91373 14913
1. In India, how big is this industry?
2. Globally, how big is the industry?
3. Contribution of this sector to GDP in India vis-à-vis other countries?
4. People employed?
5. What is so different in India compared to world in numbers? (any metric suggests that)
6. Can you reach to potential growth in India?
7. Rationale for growth?
8. What is the industry structure?
Contact +91 91373 14913
1. What is the sales number of each major company?
2. What is the profit number of each major company?
3. What is the debt number of each major company?
4. What is the sales number growth of each major company?
5. What is the profit number growth of each major company?
6. What is the debt number growth of each major company?
Contact +91 91373 14913
1. Where is the sales coming from for each company?
2. Various cost contribution to sales for each company?
3. Profit margin for each sales generating segment?
4. Companre sales and cost for each company and identify trend
Contact +91 91373 14913
1. What are the variables for sales?
1.1. What affects those variables (for example, cement pricing)
2. What are the variables for cost?
2.1. How does an event like Pet coke ban affect things?
3. Is business regulated? If yes, then the major policy effects?
Contact +91 91373 14913
1. Calculate major ratios?
2. Identify trend?
3. Competition analysis from outside the Industry (example: for Airline it is Railways)
Contact +91 91373 14913
1. Share of other income in sales
2. Operating Margin variability analysis – is it too volatile?
3. Interest Cost as a % of Operating profit
4. Is other income recurring or one time?
5. Is interest cost high? Why?
6. Is Inventory high or low? Why?
7. Are receivables high or low? Why?
8. Working Capital Analysis
9. Fixed Cost Structure of the industry?
10. Is there pricing Pressure in the industry?
Reason for Ratio movement and link to Business and it's impact on BS and P&L
Contact +91 91373 14913
1. Cash from Operating Activity (CFO) is positive/negative?
2. Capex through Debt or Internal Accruals
3. WC Movement (positive or negative)
4. Cash + Investments (CI +NCI) as a %of Marcat Cap
5. Total Div 10 Yrs and Dividend Yield
6. FCF/CFO (Represents the proportion of CFO, which has become available as free cash flow, higher the better)
7. Revenue Increase is due to Production and Revenue Increase is due to Price
8. Any Sales of Fixed Assets? Why?
9. ROE increase due to Efficienty, Turnover or Leverage
Reasons for each one to go up or down and try to link to Balance Sheet or P&L
Contact +91 91373 14913
higher the better)

Industry Research Template Cement

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Industry Research Template Cement

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This template is a tool to help you assess an industry in detail.

Most often, while analysing an industry, we get stuck in term

uld be able to ask the right set of questions. Answers

nswering all these, you will soon realize that your

n. Needless to say, if you get stuck anywhere, connect

Core Sector Growth vs Growth in Cement Output

Cement Manufacturing Process In general for variety of cement

Overall Supply for India

Global Production Capacities

Company Specific Data

Regional Supply (by Companies)

Cost Analysis (as % of revenues)

Captive Power Capacity installed (MW)

Power Utilization (approx. need is 80-90 KWh/tonne) 1 MW = 1000 X 365 X 24 kWh

Per tonne Analysis

Growth Rate of Last 5 Years in

Dealers (accurate data may not be available)

Valuation Parameters for Consideration

Important to know all these

for variety of cement

000 X 365 X 24 kWh

nt to know all these

duction done by companies.

higher the better)

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