AMBUJA CEMENTS

REPORT BY V NIRAJ ADITYA

INTRODUCTION
The cement Industry
India is the second largest producer of cement in the world. No wonder, India's
cement industry is a vital part of its economy, providing employment to more
than a million people, directly or indirectly. Ever since it was deregulated in
1982, the Indian cement industry has attracted huge investments, both from
Indian as well as foreign investors.
India has a lot of potential for development in the infrastructure and
construction sector and the cement sector is expected to largely benefit from
it. Some of the recent major initiatives such as development of 98 smart cities
are expected to provide a major boost to the sector.
Expecting such developments in the country and aided by suitable government
foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg
Cement, and Vicat have invested in the country in the recent past. A significant
factor which aids the growth of this sector is the ready availability of the raw
materials for making cement, such as limestone and coal.

Market Size
Cement production capacity stood at 502 million tonnes per year (mtpy) in
2018. Capacity addition of 20 million tonnes per annum (MTPA) is expected in
FY19- FY 21.
The Indian cement industry is dominated by a few companies. The top 20
cement companies account for almost 70 per cent of the total cement
production of the country. A total of 210 large cement plants account for a
cumulative installed capacity of over 410 million tonnes, with 350 small plants
accounting for the rest. Of these 210 large cement plants, 77 are located in the
states of Andhra Pradesh, Rajasthan and Tamil Nadu.

Road Ahead
The eastern states of India are likely to be the newer and virgin markets for
cement companies and could contribute to their bottom line in future. In the
next 10 years, India could become the main exporter of clinker and gray
cement to the Middle East, Africa, and other developing nations of the world.
Cement plants near the ports, for instance the plants in Gujarat and
Visakhapatnam, will have an added advantage for exports and will logistically
be well armed to face stiff competition from cement plants in the interior of
the country.Cement-June-2019
Due to the increasing demand in various sectors such as housing, commercial
construction and industrial construction, cement industry is expected to reach
550-600 Million Tonnes Per Annum (MTPA) by the year 2025.
A large number of foreign players are also expected to enter the cement
sector, owing to the profit margins and steady demand.

AMBUJA CEMENTS
Ambuja cement limited formerly known as Gujarat ambuja cement limited is
an Indian major cement producing company. The groups markets event and
clinker for both domestic and export markets.
It is a public limited company, traded in BSE and NSE it was founded in 1983
and its headquarters Is in Mumbai, Maharashtra India.
The company was founded by Suresh Kumar and “Narotam sekhsaria”.
Narotam is also the chairman of the company and “Bimlender Jha” is the
managing director and CEO of the company
The business carried out by the company is cement manufacturing
The company has entered into a strategic partnership with Holcim, the second
largest cement manufacturer in the world from 2006. Holcim had, in January,
bought a 14.8 per cent promoters' stake in the GACL for INR 21.4 billion.[4]
As of 31st December 2018 the company has 6 direct subsidiaries 1 joint
venture and 1 joint operation.Ambuja Cements Ltd (ACL) was incorporated on
20th October 1981 as Ambuja Cements Pvt. Ltd. The company was established
as a joint venture between the public sector Gujarat Industrial Investment
Corporation (GIIC) and Narottam Sekhsaria & Associates. In May 19 1983 the
company was rehabilitated into a public limited company. Subsequently the
company name was changed to Gujarat Ambuja Cements Ltd. Further the
name was changed to Ambuja Cements Ltd.
The company holds a market share of 8.3% in the domestic markets and 1% in
the world market.
 STOCK PERFORMANCE

average price of stock through out the year

YEAR STOCK PRICE 300
2005 240.286494
2006 108.8248 250
2007 131.2257831
2008 92.6383333 200
2009 87.39897119
2010 122.8607143 150
2011 139.13384
2012 177.5179681
100
2013 184.98724
2014 205.4618852
50
2015 228.8354435
2016 229.7509312
2017 253.7670161 0
2004 2006 2008 2010 2012 2014 2016 2018 2020
2018 227.3947967
2019 215.2705495

The company has and continues to experience minor fluctuations like all stocks
in the market. However, between the year 2005 to 2006 Ambuja cement’s
cements price fell by almost a 100%. Many reasons contributed to this drop.
The value of the share was at its highest ever hence the drop was an expected
trend in the market. The company also issued bonus share to its shareholders.
This led to an increase in the number of securities in the hands of the
shareholders which promoted the to sell out.
Apart from that the company also donated 25lackh to earthquake victims. It
also sliced its share price from Rs 10 to Rs 2. All this contributed to the fall in
share value of the compay between 2005 and 2006
Today the company’s share value stands around Rs200 to Rs 250. The
dividends paid by the company is around Rs 2 per share. That is around 1% on
an invest of Rs 200. Due to the economic condition of the country the share
price is expected to fall.
Conclusion
Ambuja cements is one of the most leading cement manufacturers in the
world. Like all companies , Ambuja cemets have also undergone market
turmoil, but have made huge comebacks. The coming years look good for the
company and the whole industry because of the infrastructural improvements
that India and other developing countries are about to undergo eventhough
the current economic condition portrays a different image.
Currently the company’s share is expected to decline throughout the year 2019
and 2020 however in the long run the company is expected to perform
remarkably well. Therefore an invest made in the securities of Ambuja cements
will do well in the long term.