A Summer Internship Project Report

On

Equity Research on Cement Sector

At

ADITYA BIRLA SUN LIFE INSURANCE COMPANY LIMITED

By

AAKASH MAHAVIR NABARIYA

MBA (BANKING AND FINANCIAL SERVICES)

Batch-2019-2021

Under the guidance of

Prof. Rohan Bhase

Submitted to

In partial fulfillment of the requirement for the

award of Degree of Master in Business
Administration (MBA)

Submitted Through
MIT-WPU School of Management (PG), Pune.

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 CERTIFICATE

This is to certify that Mr. Aakash Mahavir Nabariya of MIT-WPU School of Management (PG)
has successfully completed the project work titled ―Equity Research in Cement Sector‖ in partial
fulfillment of requirement for the award of MBA prescribed by the MIT World Peace University,
Pune, from 15 April 2020 to 22th June 2020.

This project is the record of authentic work carried during the academic year 2019-2021.

Prof. Rohan Bhase Prof. Dr. T. J. Vidyasagar Prof. Dr. Rajiv Thakur

Internal Project Guide Head of School Director General – Provost

School of Management (PG) School of Management (PG) Faculty of Management

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 ACKNOWLEDGEMENT

I would like to thank my guide from ADITYA BIRLA SUN LIFE INSURANCE, Mr. Jitendra
Bapna for his continuous guidance and support which helped me to successfully complete my
internship with a significant amount of knowledge.

I would also like to thank Prof. Dr. Sayalee Gankar, Dean, School of Management (PG) at
MITWPU for constantly being a source of great motivation. I also thank Prof. T.J. Vidyasagar,
Head of School, Prof. Shraddha Kokane, Program Head at MITWPU, for their knowledge and
expertise that provided essential qualitative research.

I express sincere gratitude to my college guide, Prof. Rohan Bhase for his continuous guidance
and support which helped me to successfully complete my internship with a significant of
knowledge and valuable inputs.

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 DECLARATION

I, Mr. Aakash Mahavir Nabariya hereby declare that this project is the record of authentic work

carried out by me during the academic year 2019-2021. This project is plagiarism free and has not

been submitted to any other University or Institute towards the award of any degree.

Signature of the student

(Aakash Mahavir Nabariya)

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 TABLE OF CONTENT

S.No. Particulars Page No.

1 Executive Summary 7

2 Introduction 8

3 Objective 15

3.1 Objectives 15

3.2 Scope Of Study 15

3.3 Significance Of Study 15

4 Industry Profile 16

5 Company Profile 19

5.1 About Company 19

5.2 Company’s Product 26

5.3 Competitors 27

6 Literature Review 28

7 Research Methodology 30

8 Equity Research (Data Analysis) 31

8.1 Global Analysis 31

8.2 Country Analysis 42

8.3 Sector Analysis 48

8.4 Fundamental Analysis 64

8.5 Technical Analysis 83

9 Findings 87

10 Conclusion 88

11 Limitations 89

Bibliography 90

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 LIST OF TABLES

S.No. Table No. Particulars Page No.

2.1 Difference between Fundamental Analysis and Technical 13

1
Analysis
2 8.3.1 Key Market Players 49
3 8.3.2 Consumption Volume of Cement in India 51
4 8.3.3 Production Volume of Cement in India 51
5 9.1 Achievements 64
6 9.2 Business Performance 65
7 9.3 Sales 65
8 9.4 Financial Performance 66
9 9.5 Shareholding Pattern 66
10 9.6 Comparative Performance Analysis 76

11 9.7 Current Scenario 77

LIST OF GRAPHS

S.No. Table No. Particulars Page No.

1 8.3.1 Consumption 48
2 8.3.2 Production 49

3 8.3.3 Total Cement Production Capacity (MTA) 50

4 8.3.4 Demand 59

5 9.1 Shareholding Pattern 67

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 1. EXECUTIVE SUMMARY

As Cement Industry plays very important role in Indian economy as well as global economy. The
project is aimed to analyze the cement industry in India. To analyze the cement industry overall
analysis of cement sector, analyzed performance of top 3 cement companies in India and their
performance using ratio analysis is included in this study.

This project entails a thorough study and understanding of financial ratios that has been chosen
here to understand and compare financial health of 3 Cement companies using ratio analysis as
tools.

It begins with top down approach which includes global analysis, country analysis, sector
analysis and company analysis. Analysis of the Indian Cement sector is basis of this project and
for this, analysis to top 3 Indian Cement Company is also included.

The study then further moves to ratio analysis and interpretation of 3 companies to reveal
meaningful information about financial performance of companies. While elaborating upon the
ratios and their interpretation the study identifies areas of appreciation and improvement of each
company.

To analyze the Cement Sector, models like PESTOL, SWOT analysis is used which gives the
overall aspect view of the Indian cement sector.

As due to Covid-19 world’s economy has drastically came down which affected Cement Sector
too. But as mentioned in the study, factors like government initiatives for smart cities,
infrastructure projects like highways, hosing for all will help to boost the Indian Cement Sector.

This study states that Cement demand is primarily derived from the subsequent segments –
Housing at – 60%-65%, Infrastructure at 20%-25%, Commercial construction at 10%-15% and
Industrial at 5% - 10%.

At the end of study, findings and conclusion is based on overall study is done so to complete the
study which reflected the overall learning.

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 2. INTRODUCTION
India being a developing country where people are more affected towards savings and
investment part. Now- a-days many of us have an interest to take a position in financial markets
especially on equity market to induce high returns and to avoid wasting tax in honest ways. As
people are becoming educated about stock exchange they know that equities are playing a
significant role in contribution of capital to the business. Since the introduction of the concept of
shares, large numbers of investors have shown interest to speculate within the stock exchange.

The price of a security represents a consensus. During this price one person agrees to shop
for and another agrees to sell. On the investor’s expectations, the Investor’s willingness to shop
for or sell primarily depends. If he expects the security's price to rise, he will buy it; if the
investor expects the worth to fall, he will sell it. These simple statements are the reason for a
significant challenge in forecasting security prices, because they check with human expectations.

Equity research refers to the analysis of a company’s fundamentals, plan analysis, financial
modeling and scenario building for equity recommendations. Equity research divisions work
both for the sell side and also the buy side of brokerage.
Equity research may be a way of analyzing the financial performance of the corporate and
forecasting both the buying and selling nature of firm’s assets within the exchange. It's an in
depth research method of analyzing a firm’s assets and liabilities which attracts the investors to
speculate within the company. This can be the strategy of evaluating the share value of the
corporate within the market and provides various insights and reports which are considered by
the investors while investing in any firm.

Equity Research includes

 Performing the valuation of listed companies.
 Research the economic and industry parameters.
Perform fundamental analysis.
 Project Revenue and profits of the corporate.
 Valuation using DCF, Relative valuation.
 Compare the fair value with market price.
 If Fair value is less than market price, that is market price is more, then SELL.

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  If Fair value is more than market price, that is market price is less, then BUY.

Research analysis may be an important a part of the company’s development. It's the
foremost appropriate way of analyzing the company’s current demand and situation within
the market. Most of the investors depends on the knowledge provided by the equity researchers
before investing anything within the company to investigate whether their investment is safe or
not and whether to continue or exit the investment.

Equity Research Firm in India:

 CRICIL
 Almondz
 India Infoline
 PINC Research
 Motilal Oswal
 CLSA
 Morgan Stanly
 Emkay Research

 Equity Analysis
The evaluation of particular trading instrument, an investment sector or the market as a full is
understood as Equity analysis. It attempts to work out the longer term activity of an
instrument, sector, or market. It is way for investors and traders to form buying and selling
decisions. By studying and evaluating and evaluating past and current data, investors and
traders try and gain a foothold within the markets by making informed decisions.
 Importance of Equity Analysis
It’s extremely important to try to an appropriate research work before making in
investment. It's only after as in-depth research work, one can evaluate or predict the longer
term performance of a share, specific sector or the stock exchange. Appropriate research work
gives a good concept that the investment you are planning to undertake will yield profitable. It
becomes important to work out that hard-earned money invested within the right place

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 and doesn't go wasted. It focuses on a selected stock or a sector as a full and captures all the
knowledge of the stock or companies in an exceedingly sector.

Types of Equity Analysis

There are two varieties of Equity analysis within the stock market:
1. Fundamental Analysis
2. Technical Analysis

 Conceptual Framework
1. FUNDAMENTAL ANALYSIS:

Fundamental Analysis is that the process of finding the intrinsic value or worth of a
share. It's the study of a company's fundamentals with the aim of determining its exact
worth. The method is predicated on analyzing the data that's 'fundamental' to the corporate.
Fundamental analysis focuses on creating an image of an organization, identifying the intrinsic
or fundamental value of its shares and buying or selling the stock supported that information.
Prices of the securities within the securities market keep it up fluctuating and reasons behind
that are many. The investors and other operators are always inquisitive about buying the shares
at lower prices and selling them at higher prices to form profit. To attain this objective, they
estimate the share price. The investments made on the premise of fundamental analysis carry
less risk if the time of the investment is long. The share should be purchased if it's being
traded within the market below its intrinsic value, it should be sold if it's traded within
the market at a price above its intrinsic value.
The investors or their investment advisors do Fundamental analysis. It's difficult for the
normal investors to perform the analysis as even during this era only a few people are educated
about securities market and its study. Hence, generally it's carried by the consultant who are
experts during this filed. There are two investment philosophies followed in equity research:
(i) Top down philosophy
(ii) Bottom up philosophy

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Top down: This philosophy follows the subsequent investment process:
(a) Consider the macro-factors i.e. the state of economy; invest within the economy that's strong
and growing.
(b) Then, consider the industry; invest within the industry which is anticipated to outperform
other industries
(c) Finally, consider the company; invest within the company which is predicted to be
best within the industry.
Bottom up: This philosophy gives maximum weight to the 'company' i.e. a bottom-up investor
thinks about the money related wellbeing, items, gracefully and request, and different parts of an
organization's presentation over a given time of some time. Utilizing this methodology the
portfolio administrator give less consideration to the economy in general, or to the possibilities
of the business an organization is in.

Fundamental analysis involves three types of analysis:

 Economic analysis
 Industry Analysis
 Company Analysis
Economic Analysis
Corporate performance is incredibly much influenced by macro-level economic factors. Positive
factors increase the value of the shares as factors have positive impact on the performance of the
corporate.
These factors are: Monsoon, interest rates, GDP growth, interchange rates, inflation, public
debts, budgetary deficits, taxation policy, balance of trade, savings rate etc. Economic analysis is
performed not only from the purpose of economic system but also from the purpose of view
of the worldwide economy particularly when the corporate is working at global level.
Industry Analysis:
It is a study of demand and supply of the industry's products. Industry analysis should be done
from global prospective. The foremost study in industry analysis is that the phase through which
the industry is passing. There are four stages in any through which each and
every industry should pass –
(i) Innovation Stage

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 (ii) Expansion Stage
(iii)Stagnation Stage
(iv) Declining Stage.
Industry analysis is type of important a component of the fundamental analysis. As an example,
when the industry is passing through expansion stage, not only the leaders but even the laggards
report good performance.
Company Analysis
There are two parts of company analysis:
1) Non-Financial analysis: This includes analysis of leadership, top management, corporate
governance, corporate vision, corporate policies, and relationship with different stakeholders and
competitive advantage/disadvantage.
2) Financial Analysis: Financial analysis means analysis of economic statements using the
accounting ratios.
Tools of monetary Analysis are:

1. Earnings per Share

2. Price to Earnings Ratio
3. Projected Earnings Growth
4. Price to Sales Ratio
5. Price to Book
6. Dividend Payout Ratio
7. Dividend Yield
8. Return on Capital Employed

2. TECHNICAL ANALYSIS

Technical analysis is that the study is that the investigation of graphs designs and factual
figures to comprehend showcase pattern and pick stocks as needs be. It' is a technique used
for the aim of forecasting the long run price movements of the shares through the historical
data. Through technical analysis, it becomes quite easy task to figure out whether there'll be a
pointy increase or decrease in share prices. This kind of research is carried through varies
means just like the bar charts and candle charts.

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 In technical analysis historical price trends tend to repeat over time. So experts use such
charts, observe the worth, volume information and then using trends, they fight to figure out
how the stock’s price may move within the long run. As per that they pick stocks that they
feel will appreciate and sell the once they feel will depreciate.

There are three fundamental assumptions within the technical analysis of stocks.
They are:

 Market prices reflect all the knowledge a pair of stock.

 Stock prices follow trends
 Patterns tend to repeat themselves.

In view of these presumptions, one can utilize three significant specialized pointers to spot
showcase inclines and foresee future stock costs.

 Charts
 Moving Average
 Momentum Indicators.

Importance of Technical Analysis:

 Mathematical approach
 Identification of short term trends.
 Sign of upcoming danger

Both fundamental and technical analysis helps by different own ways and both have their own
benefits. There are certain differences between technical and fundamental analysis which
investor should know.

 Difference between Fundamental Analysis and Technical Analysis.

Particulars Fundamental Analysis Technical Analysis

Technical analysis is a method of

It is a practice of analyzing securities
determining the future price of the
Meaning by determining the intrinsic value of
stock using charts to identify the
the stock.
patterns and trends.

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Relevant for Long term investments. Short term investment.

Function Investing Trading

To identify the intrinsic value of the To identify the right time to enter or
Objective
stock. exit the market.

Decisions are based on the

Decision Decisions are based on the market
information available and statistic
making trend and prices of stock.
evaluated.

Focuses on Both past and present data Past data only.

Economic report, news events and

Form of data Chart analysis.
industry statistics.

Predicted on the basis of past and

Predicted on the basis of charts and
Future prices present performance and profitability
indicators.
of the company.

Type of Swing trader and short term day

Long term position trader.
trader trader.

Table No. 2.1

CEMENT SECTOR
India is known to be second biggest concrete maker inside the world and records for more than 8
% of the world's introduced limit starting at 2019. Concrete creation arrived at 334.48 million
tons (MT) in FY20.

Concrete makers Association (CMA) is that the peak group of gigantic (1 million tons limit for
each annum and the sky is the limit from there) concrete producers in India. It assumes a reactant
job in overcoming any barrier between the administration and furthermore the Indian Cement
Industry towards forming significant approach matters in regard to solidify.

India's concrete creation limit is anticipated to accomplish 550MT by 2025. It's bolstered by
significant level of movement happening in land and high government spending on keen urban
areas and urban foundation.

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 3. OBJECTIVE
3.1 Objectives:

The objectives of the study are as follows:

 To understand the Equity Market and its performance.

 To know the how basic tools of fundamental and technical analysis may be applied while
taking investment decisions.
 To interpret the results of ratios.
 To identify trends and patterns in the stock prices.
 To study and analyze financials and look at qualitative and quantitative aspects.
3.2 Scope of Study:
 The main aim of equity research is to analyze the market trend and observe how it is
affecting company’s earnings and their stock value.
 It focuses on a particular stock or a sector as a whole and captures all the information of
the stock or companies in a sector.
 It includes a review of its historical financial performance, forecast of its future financial
performance along with the

3.3 Significance of Study:

 To the Individual Investors: As equity research helps to take investment decision that
whether to buy or not, should continue to invest or exit from the market equity research
plays an important role for individual investors.
 To the Organization: Equity research includes the study of technical and fundamental
analysis, study of GDP, market trend etc. hence it helps to know the trend of equity
market sector or company.

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 4. INDUSTRY PROFILE
Starting at 2019, India is that the second biggest maker of concrete inside the world and
represented more than 8 percent of the overall introduced limit. Cement production reached
334.48 million tons (MT) in FY20. India's cement industry may well be an important part of its
economy, which provides employment to quite 1000000 people, directly or indirectly. In 1982, it
had been deregulated and afterward the Indian concrete industry has pulled in immense
speculations, both from Indian comparably as outside financial specialists.
India incorporates many potential for development within the infrastructure and construction
sector and also the cement sector is anticipated to induce largely advantage from it. A variety of
the recent major initiatives like development of 100 smart cities are expected to provide
significant boost to the current sector.
Expecting such developments within the country and since of suitable government foreign
policies, several foreign players have invested within the country within the recent past. The
ready availability of the raw materials for creating cement, like limestone and coal could be a
significant factor which aids the expansion of this sector.
Due to the expanding requests of various divisions, i.e., housing, commercial construction and
industrial construction the demand of cement industry is predicted to realize 550-600 MT
annually (MTPA) constantly by 2025.
With production of around 425 million tons in 2017, India has second largest cement industry
everywhere the world, and by 2030 India is predicted to appreciate the cement production
capacity of 550 million tons.
India concrete industry is fundamentally commanded by private players owing 98% offer and
rest with the open division. Top 20 companies’, hold70% of the annual cement production. A
range of companies are ACC Ltd., Ambuja Cement, Binani Industries Ltd., Birla Corporation
Ltd. and Ultra Tech Cement Ltd.
India obliges almost 210 enormous concrete plants and about 350 smaller than expected concrete
plants with complete limit of 350 million tons and 11.10 million tons separately. There are 3
Indian states which largely comprise of the majority cement plants i.e. Andhra Pradesh,
Rajasthan & Tamil Nadu. Government activities towards concrete industry like expanded
spending designation for foundation improvement, improving lodging portion and different
speculation plans for private players like unloading limestone square are further drawing in the

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ventures and decidedly affecting the concrete business. Between April 2000 and December 2019
the flow of investment through FDI has reached to USD 5.28 billion.
By adding 8 million tons per annum, JK Cement has planned to increase its capacity by 2022.
Still, India should go too far so as to achieve concerning China cement capacity. By investigating
the more up to date showcases like in Eastern India and expanding concrete interest from private,
business and modern development is foreseen to build India's ability to succeed 550-600 million
tons by 2030.
It is anticipated that by 2026 India would become the chief exporter of cement to Middle East,
Africa, and other developing nations of the world. To export cement from India, the coastal
cement plants will provide an additional advantage. The Foreign companies entering Indian
cement industry tends to increase the India cement industry.
To revive the demand across sectors, from a long-term point of view, pick-up observed within
the infrastructure spending by the Government and downward trend within the interest rates is
anticipated to be important factor. The 7th Pay Commission is anticipated to assist in housing
demand. Government push on moderate lodging for understanding its vision of "Lodging for All"
by 2022 and Smart City program ought to likewise help sought after development for concrete.
Higher government spending on framework and lodging, and rising per capita earnings are key
development drivers for the concrete business. There have likewise been sure proceeds onward
the approach front, in regions related effortlessly of working together, advancing new
companies, defending the expense structure and organization, and opening up more regions for
outside speculation through the computerized course.
The government is substantially stepping up infrastructure spending.

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 Cement Sector

Large Plants Mini And White

Cement Plants

 Cement Plants: 210  Cement Plants: 350

 Installed Capacity:485mtpa  Installed Capacity: 6mtpa
 Cement Production: 410mt  Cement Production:40mt

Ranking and Region Wise Capacity

India’s Global Rank - 2nd - Cement Production
2nd Cement Consumption
India Cement Market Segmentation

By Cement Type
 Portland Cement
 Clinkers Cement
 White Cement
 Aluminous Cement
 Hydraulic Cement
By End-User
 Residential
 Commercial
 Industrial
 Exports

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 5. COMPANY PROFILE

ADITYA BIRLA GROUP

5.1 ABOUT
Aditya Birla Group is an Indian multinational conglomerate. It absolutely was founded in 1857
by Seth Shiv Narayan Birla who commenced cotton dealing at Pilani, Rajasthan, and sets
foundation of the Birla Group of Companies. A US$ 44.3 billion corporation, the Aditya Birla
group is within the league of fortune 500. With operation spread across 34 countries, the
group incorporates a 1,20,000+ employee base, belonging to 42 different nationalities. Its
Headquarter is situated at Mumbai, Maharashtra. The Aditya Birla Group is privately held.
The Aditya Birla group could be a world leader in aluminium rolling, viscose staple fibre,
and smut production. It also the fourth largest producer of insulators, one among the highest 4
cement producers (excluding China) and is that the second largest telecom company within
the world.
Over 50 per cent of the Group's revenues result its overseas operations. The corporate was named
the AON best employer in India for 2018 - the third time within the last 7 years. The group had a
revenue of roughly 3,42,930 crore (US$48.3 billion) in year 2019. To become the foremost
important Indian private conglomerate with revenue of just over US$110 billion and RIL with
revenue of US$90 billion, Tata Group has been surpassed by Aditya Birla Group.
Through the Aditya Birla Center for Community Initiatives and Rural Development, led by Mrs.
Rajashree Birla, the Aditya Birla Group arrives at fearless 7.5 million individuals.

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Companies listed on BSE and NSE
 Grasim Industries Limited
 Hindalco Industries Limited
 UltraTech Cement Limited
 Vodafone Idea Limited
 Aditya Birla Fashion & Retail Limited
 Aditya Birla Capital Limited
Aditya Birla Group is in
 Aluminum products
 Textiles
 Ready-made garments
 Life and general insurance products
 Financial services
 Telecommunications
 BPO and software services
 Exports
Globally, the Aditya Birla Group is
 1st in aluminium rolling
 1st in viscose staple fibre
 1st in smut
 3rd in cement (excluding China)
 3rd largest producer of insulators
In India, the Group leads in several sectors
 No. 1 fashion (branded apparel) and lifestyle player.
 Leading mobile telephony company.
 The 2nd largest player in viscose filament yarn.
 The largest producer within the chlor-alkali sector.
 No. 1 player in grey cement, white cement and concrete.
 A leading player in insurance and asset management.

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 Beyond Business
 Reaches out annually to 7.5 million people through the Aditya Birla Centre for
Community.
 Initiatives and Rural Development.
 Works in 5,000 villages globally.
 Runs 56 schools which give quality education to 46,500 children. of those 18,000
students belong to the underprivileged segment.
 Merit scholarships are given to 24,000 children from the interiors.
 Its 20 hospitals tend to over 1,000,000 villagers
 Ongoing education, healthcare and sustainable livelihood projects in Philippines,
Thailand, Indonesia, Egypt, Korea and Brazil lift thousands of people out of poverty.
 Providing mid-day meals to 74,000 children through Akshaya Patra.

 Leadership Team
CHAIRMAN
 Mr. Kumar Mangalam Birla
BUSINESS DIRECTORS
 Mr. Ajay Srinivasan
Director, Financial Services.
 Mr. Ashok Gupta
Group General Counsel & Chief Legal Officer
Director, Aditya Birla Management Corporation Private Limited.
 Mr. Dilip Gaur
Managing Director, Grasim Industries Limited
Director, Aditya Birla Management Corporation Pvt. Ltd.
Head, Pulp & Fibre Business.

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 Specialties
Aluminium & Copper, Cement, Viscose Staple Fibre, Chemicals, Agribusiness, Financial
Services, Branded Apparel, Telecom, Textiles, Retail, Fertilizers, Alternate Energy,
Insulators, Carbon Black, Trading Solutions, Ferro Chem, Mining, fashion, Renewables,
and Solar

ADITYA BIRLA CAPITAL

 About

For the financial services businesses of the Aditya Birla Group, Aditya Birla Capital Limited
(ABCL) is the holding company.
In Protecting, Investing and Financing solutions ABCL’s subsidiaries have a strong presence
across the nation. To diverse needs of its customers across their life stages ABCL is a universal
financial solutions group catering. Powered by more than 20,000 employees, the subsidiaries of

22
 ABCL have a nationwide reach with 850+ branches and more than 2,00,000 agents / channel
partners and several bank partners.
Aditya Birla Capital Limited oversees total resources under administration over Rs. 3000 billion
and incorporates a consolidated lending book of Rs. 601 billion, through its subsidiaries and joint
ventures as of December 31st, 2019,
In non-banking budgetary organization (NBFC), resource the executives life coverage, medical
coverage, lodging account, private value, general protection broking, riches the board, broking,
online individual money the executives and annuity subsidize the executives the organization and
its auxiliaries have a significant nearness spreading over numerous divisions. To line up an asset
reconstruction company, the corporate has also received a license from the Reserve Bank of
India (RBI).
As of 31st March 2018, Aditya Birla Capital had 19 Indian Subsidiaries 7 Foreign Subsidiaries
(counting step down Subsidiaries).

Aditya Birla Capital Limited is the holding organization of all the resulting budgetary
administrations organizations:
 Aditya Birla Finance Limited
 Aditya Birla Health Insurance Limited
 Aditya Birla Housing Finance Limited
 Aditya Birla Insurance Brokers Limited
 Aditya Birla Money
 Aditya Birla Myuniverse Limited
 Aditya Birla PE Advisors Limited
 Aditya Birla Sun Life Asset Management Company
 Aditya Birla Sun Life Insurance
 Aditya Birla Sun Life Mutual Fund
 Aditya Birla Sun Life Pension Management Limited
 Aditya Birla Asset Reconstruction Company Limited

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 ADITYA BIRLA SUN LIFE INSURANCE

 About Company
Aditya Birla Sun Life Insurance Company Limited (ABSLI) is an auxiliary of Aditya Birla
Capital Limited (ABCL). Mr. Kamlesh Rao is the MD and CEO of the ABSLI.

Aditya Birla Sun Life Insurance Company Limited (ABSLI) was incorporated on August 4th,
2000. ABSLI commenced operation on January 17th,2001. Its Headquarter is situated in
Mumbai, Maharashtra.

ABSLI is 51:49 joint endeavors between Aditya Birla Group and Sun Life Financial, a main
worldwide money related administrations association in Canada.

ABSLI is one of India’s Leading life insurance companies offering a range of products across
customer’s life cycle, including children future plans ,wealth protection plans, retirement and
pension solutions, health plans, traditional term plans and Unit Linked Insurance Plans (ULIP).

The organization was the first to present the idea of free lock-in period, even before the
Insurance Regulatory and Development Authority (IRDA) made it compulsory.

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Overview of Company’s Business

ABSLI has contributed significantly to the growth and development of the life insurance industry
in India and currently ranks amongst the top 7 private life Insurance companies in the country.

Company have a Nation-wide distribution presence through 416 branches , 8 banc-a-assurance

partners, 6 distribution channels .Over 83,000 direct selling agents, other corporate agents and
brokers and through its websites. The company has more than 13,000 employees and more than
17 lac active customers.

As of December 31st, 2019, total asset under management of ABSLI stood at Rs.4,27,907
million. ABSLI recorded a gross premium income of Rs. 22,276 million in Q3 FY 2019-2020
and registering a y-o-y growth of 14% in Individual first year premium and currently ranked 7th
in Individual Business.

ABSLI spearheaded the dispatch of Unit Linked Insurance Plans (ULIPS). ABSIL has strategy
of unveiling their portfolio on a month to month premise to set up its believability and include
extra straightforwardness. ABSLI offers a total scope of assurance answers for help secure your
Family's future and ABSLI's different creative protection plans take into account offer budgetary
help for your youngster's instruction, riches with insurance arrangements, wellbeing and health
arrangements, retirement arrangements and investment funds with security arrangements, to
assist with remaining monetarily secure later on with extra arrangement of little restrained
reserve funds at normal spans.. .

 Vision

To be the first preference of our customer by providing innovative, need based life insurance and
retirement solutions to individuals as well as corporate. These solutions will be made available
well trained professionals through a multichannel distribution network and superior technology.
It will provide constant value addition to the customer throughout their relationship with us,
within the regulatory framework
 Values
 Integrity: Honesty in every action
 Commitment: Deliver on the promise
 Passion: Energized action

25
  Speed: One step ahead always

5.2 Company’s Products:

 Life Term Solutions.

 Savings with Protection
 Children’s future solution plan
 Retirement plan
 Health plan
 Ulip solution plans
 Rural Solution
 NRI solution
 Benefits of Birla Sun Life Insurance:
 Multiple plans: Birla Sun Life insurance offers their customer a host of life insurance
products- Term insurance, Endowment policy, ULIP, Money Back Life insurance and
whole life Insurance.
 Flexible premiums: Customer can enjoy flexibility in paying premiums by opting for
monthly or annually premium paying option.
 Payouts and Benefits: Customer can opt for Annual Income or Lump Sum benefit
payout option.
 Tax benefits: Customers are entitled to Tax saving benefits under Section 80C, 80CCC,
80CCE, 80D, Sec 3 of 10(10A) and 10(10D) under the Income Tax Act,2016.
 Why Aditya Birla Sun life Insurance?
 CLAIM SETTLEMENT RATIO:
It is often said that higher the claim settlement ratio, better it is. ABSLI has an astounding
claim settlement ratio of 97.15%.
 STRONG LEGACY:
Aditya Birla Capital is one of the most trusted brands and its joint venture with Sun Life
Insurance has gained accolades in the industry with the name Aditya Birla Sun Life
Insurance.

26
  SIMPLE AND NEED BASED PRODUCTS:
ABSLI aims to make savings and living easier for each individual. So, each product has
been made in accordance with the basic and simple needs of every customer.

Due to lockdown situation ABSLI has given e-payment option for premium payments which will
not only helpful to pay the premiums but also help for digitalization by giving multiple online
transaction options.

 Net Banking
 E-wallets
 Credit Card
 Debit card
 UPI
 IMPS

5.3 Competitors
 Reliance Life Insurance
 Met Life Insurance
 Max New York Life
 Bajaj Allianz
 Bharti AXA Life Insurance
 Kotak Mahindra
 SBI Life Insurance
 Tata AIG
 Aviva Life Insurance

27
 6. LITERRATURE REVIEW
The extensive research has been conducted within the area of equity research in cement sector.

 Anita Jangra (2014), the objective behind this research paper was to judge the consumption
and investment and also the market share of the cement industries in India. In this research
paper, this study proves that cement industries play a vital role in Indian economy and also
the contribution to the economy is big by this industry. It’s been studied that, there are 69
industries producing cement. During this the study of top 5 companies are done, their market
size, their investment is studied. It’s also seen that the main a part of the cement is consumed
by housing sector i.e. 64%, 17% is consumed by infrastructure, 13% by commercial and only
6% is consumed by industrial sector. This study analyzed that the most consumption of
cement industries in India in several sector. During this research analysis of financials of top
5 companies was done including total income, total expenditure and total profits of the
corporates. It’s also reflected that the housing segment accounts for a major portion of total
domestic demand for cement in India.
 Vigneshwar Mekha and Adma Reddy (2018), aimed towards study of the trends in
installed capacity and cement production of huge cement plants in India. The authors also
tried to specialize in problems and prospects of cement industry in India. This research paper
also included geographical segment wise cement capacity. During this the information
associated with number of plants and percentage of plants and installed capacity in numerous
states of country is collected. Author focused on inborn and acquired strength of the Indian
cement industry. This study shows the various problems which Indian cement industry faces
like inadequate production, manufacturing cost problems, operational efficiency, operating
cost, policies and regulation of government and infrastructural problems. This research study
gives different prospects and drivers which Indian cement must improve so to increase
production capacity and growth of cement industries.
 Sandeep kudtarkar, (2018) studied the research on Indian cement industry on path of
environment sustainability through Innovation and resource optimization. By analyzing and
discussing the sustainability reports of top five cement companies in terms of sustainability
challenges, their impact and innovative measures and case studies towards mitigation of
issues discussed in this paper, it was concluded that cement companies are well aware of

28
 impact of their operations on environment and society at large. Author also states that cement
industries should appreciate the necessity and challenges for clean technologies and work
beyond compliance requirement towards low carbon development to sustain its
unprecedented growth in India. During this research work it’s also studied that how cement
industry impacts on environment and therefore the initiatives taken by cement companies.
Author has mentioned the key drivers which address climate challenges.
 L G Burange and Shruti Yamini,(2009) aimed at performance of the Indian cement
Industry under different policy regimes, which truly establishes that decontrol of the industry
and liberalization of the economy has led to remarkable improvement within the like
indicators such as installed capacity, capacity utilization, per capita consumption and exports.
During this research it’s also concluded that given the sustained growth within the housing
sector, the government’s emphasis on infrastructure at national and state level and increased
global demand, the prospects for India’s cement industry is exceeding promising. This
research paper focused some light on the regional dominance of the players. The finding of
the study reflects the relative competitive position of the sample firms and also the picture of
the industry.
 Dr. P. Krishna Kumar, and Dr. S. Franklin John examine the progress of Indian Cement
Industry in terms of its growth in installed capacity, production, exports and value additions.
During this author has studied the installed capacity, production, exports from FY1991 till
FY 2005. During this all the information has collected of respective things associated with
research which shows the progress of Indian cement industry over the period of time. This
research also represents the progress of Indian cement industry over the period of time in
financial terms including Operating Profit, Net worth, Earning per share.

29
 7. Research Methodology
Methodology:
The project measures the financial performance of the company with the help of the most
financial analysis by using ratio analysis tool.

Data:
Data collected for analysis of a company is from the Annual Reports of the year 2019-2018,
2018-2017, and 2017-2016. I have used balance sheet, profit and loss account and cash flow
statement from the same.

Sample Size:

Three large cement companies are chosen as sample size of the study, on account of sales,
production, and profitability.

Tools:

To analyze the cement sector and cement companies tools like SWOT analysis, PESTEL
analysis, ratio analysis is used which gave fair enough idea about the sector and company.

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 8. EQUITY RESEARCH

8.1 GLOBAL ANALYSIS

 DOT COM BUBBLE

 Introduction
The Dot Com Bubble also called as the ― Dot-Com Boom‖, ―The Tech Bubble‖, and
―The Internet Bubble‖ was a securities market bubble caused by excessive speculation in
Internet-related companies in the late 1990s, a period of massive growth within the use
and adoption of the Internet.
 Startup in US going online
It was the time of 1996-1997 when the evolution of internet was going on and people
were excited about the internet. So, the use of internet was increasing. It was time when
online businesses were becoming a new business category in the market and some
internet based business companies that is online business companies were performing
well in that time. Hence due to increase in the popularity of internet and performance of
online business companies; investor were confident about the fact that due this evolution
of internet and development in technology such companies will surely do well in future
and would become profitable.
 High Investment
This would be going to give good returns to the investor. Hence investor started investing
huge money in such companies specially those who use ―.com‖ suffix in their name. In
such companies they invested blindly. Even many investors were unknown about the
business model. Due such amount of investment the shares of companies become twice-
thrice in a month with increase in valuation and so the owner became the richer during
short period of time. Due to such performance, other investor also started to invest in
such companies looking at this performance. As the interest rate were low at that time so
people refused for fixed income and started investing in such dot com companies. The
situation was like star- up companies got funds of million dollars even before they launch
the product.

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 Couldn’t prove the business model:
As it became a popular business; some of the company’s product weren’t ready then too
their valuation was done. So like this it become a strategy to get funding just by starting a
website. Many companies raised the funds from public through IPO. In the year 1999
almost 400 companies bought the IPO and amongst them 117 were internet based
companies. The real fact was as they did not have any business model they couldn’t
prove the business model.
 Start-up collapsed
As they did not have any business model they couldn’t prove the business model. Infact
internet based company were newly evolved people were unknown about how the
valuation is to be calculated. Investors were confident about the bright future of such
companies. So such companies got huge funds from investor and thus such company took
advantage of it and used that money without any sense. After 2-4 year when checked it
was found that there were not any growth in such internet based companies. Many of the
company used investor’s money for vacations, advertisement, luxury offices. Due to such
kind of behavior companies failed to meet investor’s expectation and hence from the year
1999-2000 dot com bubble started bursting. Pets.com which had huge amount of money
of investor became bankrupt in the year 2000. Infoseek whose valuation was around 7
billion dollar became bankrupt. Likewise some other companies also failed.
 Money invested become zero and stock market collapsed
As investor took back-out from investing in such companies; the shares of such
companies and valuation of company fell down. In the year 2000-2000 dot com bubble
got crashed. In-fact big companies like amazon, ebay.com had to suffer that time. It
became impossible to get fund for companies hence many company had to shut their
businesses. On 11 September 2001; Osama bin laden attacked US’s world trade center.
The effect of that was share market went down. Many company used dot com after their
name hence it is called as ―Dot Com Bubble”. At that time the valuation of SOT bank
reached to 200 billion dollar. After the bursting of dot com bubble the valuation of sot
bank fell down from its peak for 99%.

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 SUBPRIME CRISES
 Stock Market Collapsed
In 1996 ―dot com bubble‖ was at peak in US where the prices of technology companies
were high but then; in the year 2000-2002 the dot com bubble got burst. Thus the stock
prices were felt down drastically. Hence investor drew their money from the market. As it
was time when interest rate was 1% which was very low and stock market also felt down.
 Interest Rate Dropped
The real estate sector was performing at good level and government was encouraging
people to buy the house. To boost the economy interest rate was reduced at that time
,hence interest on loan were too low, so people started buying the house by taking loan
and hence demand and prices of the house went up. Looking at situation investors were
confident about the profit they would earn in future.
 Investment banker made a new product
Investment bank looked this situation as opportunity and they started taking loan from
banks and combining all such loan; investment banker made this loan as a complex
derivative product which they named Collateralized Debt Obligation and they asked
credit rating agency for rating such CDO. At that time credit rating agency gave such
CDO ―AAA‖ rating. Then such investment bank used to sell such CDO to the investors.
Looking at this high rated CDO, demand for such CDO increased and hence investment
bank took high loan amount from banks.

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 Sub-Prime Loans
Bank already gave loan to those people who had good history for repayment. So then
bank gave loans to those people who were less capable to repay the loan. Such low
quality loan is called as ―subprime loans‖. Almost 70% CDO were given AAA rating.
Demands for such loans were high from investor’s side. ―Country wide financial
corporation‖ and ―Amerequest mortgage‖ company gave almost 177 bn dollar’s sub-
prime loans. From year 2002 upto 2007 investment banks earned huge profit through sub-
prime loans. Banks, investment banks and credit rating agency had huge profit. Moody
which is one of the top credit agencies; had 4 times profit in these years.
 Problem arise
The sub-prime loans were given at adjustable rate in which rate was low in starting years
and then it increase but the many of sub-prime borrower’s did not had idea about this. As
after the some years when interest on loan increased subprime investor became unable to
pay such amount and they could not paid the loan. Then bank used to recover loans by
selling houses. Hence bank auctioned many houses. But till year 2007-2008 interest rate
became around 5%. As bankers had given loan to many people; it became difficult for
bank to get buyers. Hence the prices of houses fell down drastically. The amount of loan
took by people were higher than the prices of the houses. So many borrowers started
defaulting. Due to such fact the income of bank stopped. Hence the value of CDO
became zero and so the investor had to incur loss. Those people who had bought
insurance on CDO; they were safe but insurance company that is AIG had loss of
99billion dollar.
 Market Crash
As no one was purchasing CDOs; many CDO left with investor banks and they had to
bear those loses. US based top 5 investment bank had to suffer a lot. Lehman brothers,
top investment bank became bankrupt. Around 25000 became unemployed due to this.
In this crisis bank and other financial institution had to bear loss of around 450bn. Not a
single regulation was there on CDO/CDS to control their work. Due this credit crunch
happened. Many businesses stopped down due no loans/capital available. US economy
went down. Unemployment increased. As US was biggest economy; it affected other

34
 country’s economy too. Global recession was there in the world. The Crises which
happened in 2008, many countries became bankrupt.

 JAPAN DEBT CRISIS

 Introduction
Japan is one amongst the foremost developed and most influential countries in the world.
Carrying a considerable debt roughly 233% of GDP on its shoulders, it is also the
foremost indebted country within the world
Since 1997, debt levels grew consistently, GDP growth stagnated and also the returns of
the 10-year government bonds were negative. Despite of those indicators, Japan
continues to be a stable and creditworthy nation that draws investors.
 Japan Tolerate Its Debt Level
Deflation has been Japan’s economic setback since the first 1990s. After the rise of inter-
bank lending rate from the Bank of Japan, the expected asset bubbles that were created
after the WW2 had finally burst in 1989. Once the stock market crashed and equity prices
dropped, banks and insurance companies were left with plenty of bad debt.
The Japanese government and financial institution supported these organizations by
bailing them out and providing low-interest credit. Thus, these firms have to rely on
support. Banking institutions had to be consolidated and nationalized as this eventually
became unsustainable.
Throughout many years, other fiscal stimulus initiatives were also accustomed help
reboot the stumbling economy. Due these government-approved actions, Japan’s debt
level skyrocketed to become the highest within the world. Most of Japan’s debt including
government bond are held by its own citizen, therefore the risk of defaulting is way
lower.
It can adjust interest rates at low levels so repayment values stay low relative to the
overall debt level so Japan continues to be well off. Japan is unlikely visiting default
anytime soon.

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 Japan in Debt and Danger
It is doubtful the country can ever repay the complete amount as Japan currently has such
a high level of debt.
To lower the burden of debt, Japan’s central bank reduces the interest rate and purchases
government bonds to provide the financial system with extra cash. Theoretically, this
artificially minimizes the total interest repayment.
The interest expense can easily be tormented by rate increases because the Japanese
government’s debt is so high. Within the end of 2016, Japan’s debt was 15 times higher
than the taxation collected by the government.
 An Economic Pandemic
It is known as domestically held debt as Japan is still on the high ground because the
government can sell most of its debts to its citizens. Deflation (decreasing prices of goods
and services) that happens for long periods of time makes government debt and other low
yielding assets far more attractive.
Yet Japan’s population is shrinking and aging, so it’s highly doubtful that the country can
increases national savings to a degree where purchasing government bonds are
sustainable. And since Japan is a net importer of goods, the only way to reduce debt is by
having foreign investors.
 To cover the cost
As many developed markets have lowest interest rates. Investors are playing safe by
trying to scale back losses on fixed income assets which means for now, Japanese
government bonds don’t seem that bad.
U.S held the second highest levels of Japanese debt . The upside of this is often to
reclaim financial leverage and have some autonomy over Japan (the largest holder of
U.S. debt), while optimizing the rate of exchange between the Yen and Dollar. Another
important reason to carry Japanese debt is to weaken the Chinese stronghold that’s
casting its shadow over Yen-denominated debt.
To ensure that Japan’s interest payments and spending obligations won’t be defaulted, the
government needs to confirm foreigners are buying its debt.

36
 Nowadays, buyers should be supporting debt auctions. Debt servicing costs to
unreachable levels can be raised by continual reduction of interest rates and satisfying
foreign investors within the future.
Therefore, the sole choice to gain more foreign investors is to own higher yielding debt
options. This often mainly because China is diversifying, by exposing more into Japan
while relying less on Europe and the U.S.

 US CHINA TRADE WAR EFFECTS

 India gained about $755 million in additional exports, mainly of chemicals, metals and
ore, to the US within the half of 2019, Due to the trade diversion effects of US trade war
with China.
 The study named 'Trade and Trade Diversion Effects of U. S. Tariffs on China' shows
that the continuing US-China trade war has resulted in a very sharp decline in bilateral
trade, higher prices for consumers and trade diversion effects.
 Due to trade war between US and China, other players became competitive in the market
which led to trade diversion effect.
 This US-China trade war gave benefit to Korea, Canada and India which might be
smaller but still substantial, starting from $0.9 billion to $1.5 billion.
 Although the outlook of world economies looks grim, particularly India and ASEAN
countries, which try and extend their trade footprint within the worldwide supply chain
like that Asian economies are trying to take an advantage on opportunities emerging from
the trade war.
 Sectors like electronic exports, providing China is its top trading partner, trade tensions
have affected ASEAN. Some countries have already realized gains in GDP.
 From India’s perspective, that government has identified top product lines that the
country can supply to China and thus the U.S. The mobile maker has witnessed an
uptrend within the past few years, with mobile companies expanding their manufacturing
bases in India.
 In 2018-19, India’s exports to China increased by 25.6 per cent to USD16.7 billion. An
increase in exports of cotton, plastic and inorganic chemicals, and because it raised duties

37
 on agricultural imports from the U.S, India about to further increase exports of
agricultural products to China.
 Furthermore, FDI inflows from the U.S. in India rose by 65.38 per cent to USD3.13
billion in 2018-19, additionally to inflows from China. India is perhaps visiting determine
extra increase in FDI following the recent change to FDI regulations.
 The growing focus of India and ASEAN on building a sturdy chain, along with regional
connectivity initiatives and also the company tax structure in India (25 per cent), Vietnam
(20 per cent), Indonesia (25 per cent) and Malaysia (24 per cent) being at par thereupon
of China, makes these destinations natural alternatives.
 A huge proportion of exports may shift from China as results of U.S. and Chinese tariff
hikes. India can boost its exports by USD11 billion, if India can improve its business
policies, including land acquisition and labour productivity.

ASEAN and India, however, need to factor in the following aspects and leverage them in the
long term.

 Significant investments required in training and revamping business policies to

replicate China’s labour efficiency and production capacity to attract investors
 Products such as copper ores, rubber, X-ray tubes and certain chemicals, India gains
from exporting to China.
 India has been seeking strict trade terms while getting into multilateral trade agreements.
Although such measures safeguard the domestic industry, specialize in regional
connectivity may be a critical factor.

 Vietnam -Future of Manufacturing Hub

 Introduction
 Rising labor costs, a costly trade war with the United States, and now a pandemic
that originated in the country.
 To become the preferred destination of companies wanting to reduce their
dependence on China, Vietnam has emerged as a strong contender to grab a big
share in the post COVID-19 world.

38
 It has recently ramped up medical equipment production and made related donations
to countries in COVID-19 need, including to the United States, Russia, Spain, Italy,
France, Germany, and also the United Kingdom. Vietnam has been a popular
destination for such shifts in trade flows and production chains.
 During the last couple of years, the country has turned into a manufacturing hub and is
steadily raising the ladder to become leading exporters of garments, textiles and
electronics.
 Some exchange specialists proposed that Chinese merchandise were moved to
Vietnam, repackaged as Vietnamese items and dispatched to the U.S. to maintain a
strategic distance from raised taxes.
 Growing Economy And Manufacturing Activities
In 2019-2020, Vietnam has recorded 7.1% of GDP growth in 2018 and is expected to
grow by 6.5%. This growth is majorly attributable to a significant increase in
manufacturing output in the country. This South-East Asian country has witnessed a
healthy increase in its manufacturing activity, after the global recession in 2008-2009.

As the nation is known for its materials, gadgets and related items, the fare of these
significant things is likewise becoming in accordance with the development of
assembling movement.

 Strategic Geographic Location

Its geographic and demographic aspects are important factors. The nation has a long
coastline of roughly 3,200 kms with in excess of 100 ports and has the ideal road and
railroad organize. Besides, expanding foundation spending by the legislature is

39
 supporting the assembling wave in the nation. Vietnam is getting advantage of
information move from assembling monster China as far as innovation and assembling
mastery because of its geographic area flanked by China. Organizations in Vietnam can
without much of a stretch re-appropriate crude material and hardware from China and can
undoubtedly trade through its number of ports. Distance between country’s capital Hanoi
city to Shenzhen (Silicon Valley of China) is only 865 kms, which further supports the
supply chain of the country.
 Lower Wage rate along with Young population
Vietnam is a young country and more than 59% of the country’s population is labor force
as of the year ending 2018. Between 2000-2018, the country’s population has grown
from 80 MN to 95 MN and the labor force as a % of population has increased from 52%
to 59% during the same period. With this plenitude of youthful work power, Vietnam is
driving right to satisfy world's interest for various items. The nation's lowest pay
permitted by law rate is practically 50% of different nations in the area. Since, the
specialist's compensation is a decent bit of the immediate expense of any assembling
organization and effects the expense per unit of good delivered, modest work further
fortifies the nation's intensity.
 Government Support
Steady approach and administrative system have helped Vietnam to pick up fitness when
contrasted with different countries without breaking a sweat of working together
positioning moved up to 69th situation on the planet. Assessment exceptions, unique
financial zones, constructing new foundation are a portion of the contributions from the
Vietnam government which added to overhauling the nation's positioning by in excess of
22 positions during the previous five years. Vietnam has additionally marked number of
reciprocal and multilateral worldwide understandings including unhindered commerce
understandings. To pull in remote financial specialists, the nation is concentrating on
hearty framework upheld by expanded government spending on infra extends alongside
expanding inclusion of the private players in the economy. These elements have pulled in
outside direct venture (FDI) and speculation has developed at CAGR of 8.6% from the
year 2010 to 2018.

40
 Recent benefit from the US-China trade war
The US-China exchange war, which has increased during the last one and the half year, is
constraining numerous organizations to begin seeing elective locales for their assembling
tasks. Vietnam has come out as the biggest winner from the on-going US-China trade
issues and gained orders from trade diversion on tariffed goods equal to 7.9% of GDP in
the year through the first quarter of 2019. Vietnam and US have reciprocal exchange
understanding and exchange has expanded from USD 451 MN in 1995 to USD 58.85 bn
in 2018. Exchange between the two nations has just reached USD 50 bn during the initial
eight months of 2019. Significant organizations including Nike, Adidas, Samsung, and
Foxconn are barely any names that are moving their industrial facilities and examination
focuses to Vietnam.

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 8.2 COUNTRY ANALYSIS
 GROSS DOMESTIC PRODUCT (GDP)

Gross Domestic Product (GDP) is that the value of all finished goods and services made within a
country during a particular period. It provides an economic snapshot of a country, used to
estimate the scale of an economy and growth rate.
GDP growth is increase/decrease in percentage of goods and services produced in a country. A
high growth means the country is growing at a quick pace.
In addition, there are several kinds of GDP measurements:

 Nominal GDP: GDP evaluated at current market prices

 Real GDP: Real GDP is an inflation-adjusted measure that reflects both the value and the
quantity of goods and services produced by an economy in a given year.
 GDP Growth Rate: The GDP development rate thinks about one fourth of a nation's GDP
to the past quarter so as to gauge how quick an economy is developing.
 GDP Per Capita: GDP per capita is an estimation of the GDP per individual in a nation's
populace; it is a valuable method to look at GDP information between different nations.

Latest news: According to, ―The Economic Times’, India’s gross domestic product (GDP)
expanded at the slowest pace in 11 years for the fourth quarter and FY20 as the Covid-19 took
hold in March, adding to pressures on an already slowing economy. A nationwide lockdown was
imposed on March 25 but business activity had begun grinding to a halt a few weeks before that.

42
 ―In view of nationwide lockdown during April 2020 due to Covid-19 pandemic, various
industries — coal, cement, steel, natural gas, refinery, crude oil etc. — experienced substantial
loss of production,‖ the commerce and industry ministry said.
GDP Growth
 GDP expanded 3.1% in the quarter, data released by the government on Friday showed,
slowest since a 0.2% rise in the fourth quarter of FY09.
 FY20 growth is estimated at 4.2%, the lowest since FY09 when GDP was 3.1% and well
below the 5% estimated at the end of February.
 Growth gauges for the past 75% were totally modified down — to 4.1% from 4.7% in the
December quarter, 4.4% from 5.1% in the July-September period and to 5.2% from 5.6%
in the June quarter, inducing an increasingly significant stoppage even before Covid-19
hit.
 Purchasing Power Parity (PPP)
Buying power equality is an estimation of costs to think about the supreme buying intensity of
the nations. Buying power equality is a well-known measurement utilized by macroeconomic
experts that thinks about various nations' monetary forms through a "container of merchandise"
approach.
It takes into account business analysts to think about monetary efficiency and ways of life
between nations.
For e.g. Product ―x‖ cost in US = $4
Product ―x‖ cost in India =Rs 70 ($1)
In the above case, our per capita GDP will be multiplied by 4.

43
 INFLATION
 Inflation is the expansion in the general value level of merchandise and ventures in an
economy over some undefined time frame.
 Inflation is the rate at which the general degree of costs for merchandise and ventures is
rising and, therefore, the buying intensity of cash is falling.
 Ideally, an optimum level of inflation is required to promote spending to a certain extent
instead of saving, thereby nurturing economic growth.
 As costs rise, a one unit of money loses esteem since it purchases less merchandise and
ventures. This loss of purchasing power impacts the last typical cost for basic items for
the normal open which at last winds up in a deceleration in financial procedure. To battle
this, a nation's proper money related position, similar to the national bank, at that point
takes the compulsory measures to keep expansion inside admissible cutoff points and
keep the economy running easily.
 India's retail price inflation was revised lower to 5.84 percent year-on-year in March
2020, from a preliminary estimate of 5.91 percent.

44
 INTEREST RATES
Repo rate: Repo Rate, or repurchase rate, is the key financial strategy pace of enthusiasm
at which the national bank or the Reserve Bank of India (RBI) loans momentary cash to
banks.

 CASH RESERVE RATIO (CRR)

Cash Reserve Ratio (CRR) might be a predefined least division of the general stores of
purchasers, which business banks needs to hold as stores either in real money or as stores
with the national bank. CRR is about in sync with the guidelines of the national bank of
the nation.

45
 UNEMPLOYMENT RATE

Unemployment rate is the proportion of labour force which is currently available for
work during the reference period but they’re unemployed.

India's unemployment percentage was unchanged at 23.5 percent in May 2020, the
highest level on record, with the urban jobless rate hitting a replacement all-time high
because the country remains under lockdown amid a spike within the number of COVID-
19 cases. Due to the unlocking of rural economy and better fund allocation under rural
job scheme, there was a drop in rural unemployment.

 EASE OF DOING BUSNIESS

Ease of Doing Business is how regulatory environment is conducive to business

operation and stronger protection of property rights.

46
 India is positioned 63 among 190 economies inside the simplicity of working together, as
indicated by the most recent World Bank yearly appraisals. In 2019 India's rank
improved from 77 to 63.

 FOREIGN DIRECT INVESTMENT

 Foreign direct speculations (FDI) are ventures made by one organization into another
situated in another nation.
 FDIs are effectively used in open markets as opposed to shut markets for financial
specialists.
 Foreign direct speculations are normally made in open economies that give a capable
workforce or more normal development possibilities for the financial specialist, as
against firmly managed economies.
 Remote direct venture as often as possible includes very only a capital speculation. It
ought to incorporate arrangements of the board or innovation too.

 Foreign Direct Investment in India expanded by 1366 USD Million in April of 2020.

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 8.3 SECTOR ANALYSIS
 Introduction

India is the second biggest maker of concrete inside the world and represented more than 8
percent of the worldwide introduced limit starting at 2019. Cement production reached 334.48
million tons (MT) in FY20.
India's concrete industry is an imperative piece of its economy, which gives work to in excess of
a 1000000 people, straightforwardly or in a roundabout way. In 1982, it had been deregulated
and so the Indian cement industry has attracted huge investments, both from Indian similarly as
foreign investors.
India incorporates a lot of potential for development within the infrastructure and construction
sector and also the cement sector is anticipated to largely benefit from it. A number of the recent
major initiatives like development of 100 smart cities are expected to produce a serious boost to
the sector.

CONSUMPTION (in million metric tons)

400
328
300 256 269 272 269
CONSUMPTION

239 245
206 221
200 166

100

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
YEARS

Graph No.8.3.1

48
 PRODUCTION (in million metric tons)
400 337.32
297.56
300 255.83 270.04 283.46 279.81
230.49 248.23
206.6 216
PRODUCTION
200

100

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
YEARS

Graph No.8.3.2

 Key Market Player

The Indian cement industry is dominated by a few big companies .Our India cement industry
report comprises of the following companies as the key players:

Total Cement Production Capacity

Company Name
(MTA)
Ultra Tech cement 117.35
Shree cement 37.90
Acc cement 33.40
Ambuja cement 29.65
Ramco cement 16.45
India cement 15.50

Jsw cement 12.80

Wonder cement 11
Binani cement 6.25
Mycem cement 5.40

Table No. 8.3.1

49
 Total Cement Production Capacity (MTA)
2% Ultra Tech cement
2%
Shree cement
4% Acc cement
5%
5% Ambuja cement
Ramco cement
6% 41%
India cement
Jsw cement
10%
Wonder cement
Binani cement
12%
Mycem cement
13%

Graph No.8.3.3

 Market Size

Cement production is reached to 334.48 million tonnes in FY2020 and it’s anticipated to
touch 550 million tonnes by FY 2020. Out of the total capacity, 98% lies with the private
sector and also the rest with the public sector.
The highest 20 cement companies account for nearly70 % of the overall cement
production of the country.
210 colossal solid plants speak to a joined presented breaking point of in excess of 410
million tons, with 350 little plants speaking to the update. Out of those 210 enormous
concrete plants, 77 are situated inside the conditions of Andhra Pradesh, Rajasthan and
Tamil Nadu.
Limit expansion of 20 million tons for every annum (MTPA) is foreseen in till FY22.

50
Consumption Volume of Cement in India

Consumption
Year
(in million metric tons)
2010 206
2011 166
2012 221
2013 239
2014 245
2015 256
2016 269
2017 272
2018 269
2019 328

Table No.8.3.2
Production Volume of Cement in India

Production (in million

Year
metric tons)
2010 206.6
2011 216
2012 230.49
2013 248.23
2014 255.83
2015 270.04
2016 283.46
2017 279.81
2018 297.56
2019 337.32

Table No.8.3.3

51
 Investments
As indicated by information discharged by the Department for Promotion of Industry and
Internal Trade (DPIIT), concrete and gypsum items pulled in Foreign Direct Investment (FDI)
worth US$ 5.28 billion between April 2000 and December 2019.

A number of the key investments in Indian cement industry are as follows:

In October 2019, UltraTech cement announced plans to invest Rs 940 crore (US$ 134.50
million) to extend the assembly of premium products for strengthening its position in
eastern markets.
With a capacity of 5.6 million tonnes, Emami Cement currently has three cement
manufacturing assets.
In May 2019, SEBI endorsed Emami Cement Ltd.’s. First sale of stock (IPO).
JK concrete will spend Rs 1,700 crore (US$ 246.7 million) to stretch out its creation
ability to 15 million tons before the finish of 2020.
As of December 2018, Raysut Cement Company will put US$ 700 million in India by
2022.
 Government Initiatives

The government has been approving their investment scheme, in order to help the private sector
companies, thrive in the industry. Some such initiatives by the government within the recent past
are as follows:
In Union Budget 2020-21, the Government of India has expanded advantages under
Section 80 - IBA of the Income Tax Act till March 31, 2020 to advance moderate
housing in India.
The Union Budget has dispensed Rs 139 billion for Urban Rejuvenation Mission:
AMRUT and Smart Cities Mission. Government's framework push joined with housing
for every single, Smart City Mission and Swachh Bharat Abhiyan is goes to zest up
concrete interest in the nation.
The move is predicted to spice up the demand of cement from the housing segment. As
per Union Budget 2019-20, Government is expected to upgrade 1,25,000 kms of road
length over the following five years.

52
 Under Pradhan Mantri Awas Yojana in Union Budget 2020-21 an outlay of Rs 27,500
crore (US$ 3.93 billion) has been allotted.

Make In India Pmay –Urban Housing For All Smart City Project

 Road Ahead

The eastern conditions of India are probably going to be the fresher markets for concrete
organizations and might add to their primary concern in future.
India could become the most exporters of clinker and gray cement to the Middle East,
Africa, and other developing nations of the world, within the subsequent next 10 years.
Concrete plants close to the ports, for instance the plants in Gujarat and Visakhapatnam,
will have an extra preferred position for sends out and may strategically be furnished to
confront solid rivalry from concrete plants inside within the nation.
India’s cement production capacity is anticipated to comprehend 550 million tonnes by
2025.
As per Union Budget 2019-20, Government is predicted to upgrade 1,25,000 kms of road
length over the subsequent five years.
Cement industry is predicted to succeed 550-600 Million Tonnes Per Annum (MTPA) by
the year 2025 due to increasing demand in various sectors like housing, commercial
construction and industrial construction.
An oversized of foreign players are expected to enter the cement sector, as a results of the
profit margins and steady demand.

53
 POTERS FIVE FORCE MODEL IN CEMENT INDUSTRY:

Threat of
New
Entry:

Buyer Inter-firm Supplier

Power Rivalry Power

Threat of
Substitute

1. Inter-firm Rivalry:
Large companies enjoy economics of scale.
Competition is regional in nature, as cement is also a high category material and
dangerous to move so, it can-not be transported across regions.
As due to over-capacity, slowdown in demand weakens prices, so no real pricing power.
So there’s moderate competitive rivalry.

2. Threat of New Entry:

Entering the industry is expensive, given the cost of around RS 7200 per tonne.
Limited raw material sources (limestone, gypsum) and difficult government clearances
also restricts new competition.
Large players enjoy economies of scale.
Wide distribution and marketing channels are important strategic assets that are difficult
to copy by new players, thus restricting entry.
Rising costs means lower IRR for brand bright green-field capacities.
There’s high barrier to entry.

54
 3. Buyer Power
Around, 65 % of cement in India is consumed by the housing sector with retail customers
accounting for the majority of the customer base. But retail buyers haven’t got much
leverage in dictating the pricing.
Lack of substitutes also causes no buyer power.
Small number of cement firms dominates local markets
Demand is inelastic- exists at all price points.
It means there’s low or no buyer power.

4. Supplier Power
No supplier power here as, most companies have captive limestone reserves
Companies depend more on alternative fuel sources as Coal linkages have reduced,
where suppliers can dictate prices.
According to cement manufacturer, price hike within the industry are because of
increases within the price of both transportation and raw materials. This suggests that
suppliers are powerful enough to force new prices on the industry.
There’s moderate to high supplier power.

5. Threat of Substitute:
No threat of substitute, as there no substitute for cement intrinsically. Other artifact is
engineering plastic but this can-not be effective or perfect substitute for cement as such
material is employed at few places only. So cement becomes the essential product for
every quite of construction work and it’s only thing hence there’s no threat of substitute.

 GROWTH PROSPECT

The one Indian industry which is about for growth over the approaching years is that the Cement
Industry. The industry is heavily addicted to 3 sectors; coal, power and transport. Energy and
freight are the 2 major cost components. Over the previous few years, while the proportion of
energy cost has increased marginally, freight costs have declined.
Increasing government expenditure on infrastructure sector and rising demand for commercial
and residential real estate development has resulted in higher demand for cement within the

55
 country. It also expects that driven by higher domestic demand and increasing utilization, India’s
cement industry may record an annual growth of 10% over the approaching years.
As coal is one in all the prime raw materials employed in cement production, this seems to be a
positive move.
Growth potential of cement industry is judged by actual fact that the per capita cement
consumption (156 kg) in India continues to be well below the world wide average consumption
(396 kg). This gap will be expected to be covered within the approaching years.
According to, Industry experts the cement industries should now increase their focus on
investing adequately in developing human resources, which are able to capable enough to handle
the professional needs of industry including advanced technologies and construction practices,
project management construction and litigation. We expect that the cement production and
consumption both will grow substantially over the years.

 PESTLE ANALYSIS
It is great tool for understanding big picture of operating and takes advantage of opportunities.
Pestle analysis includes Political, Environmental, Social and Technological factors which affects
both the businesses likewise industry.

Political Economic

Social Technology

56
 Political

The cost of concrete is essentially constrained by the coal rates, power levies, railroad duties,
cargo, sovereignty, and procedure on limestone. Interestingly, government controls all of
those prices. Government is additionally one in every of the most important consumers of the
cement within the country. Most state government, in order to attract investments in their
respective states, offer fiscal incentives in the form of sales tax exemption/ deferrals. States
like Haryana offer a stop on power tax for a long time, while Gujarat offers exception from
electric obligation.

 Economic

Even though due to slowdown in economy within the world because of Covid-19, the
industry will see the boom with a plenty of government infrastructure and housing projects in
coming years. The export segment of the industry is predicted to grow again on account of
various infrastructure projects that are being preoccupied up all over the world and diverse
outstanding cement plants developing in near future within the country.

 Social

The cement industry in India consists of both the organized sector and unorganized sector are
the. Organized sector comprises of the well-known cement manufacturing companies while
the most players of the unorganized sector are the regional and local cement-producing units
in various states across the country. Indian consumers prefer buying branded cement like
ultra-tech, ACC, Ambuja etc. a population of quite 100 billion people. It’s expected that
cement industry will create another 25 lakhs job within the next 4-5 years.

 Technology

The government of India plans to check and possibly acquire new technologies from the
cement industry of world. The government is discussing technology transfer within the field
of energy conservation and environment protection to assist and improve efficiency of the
Indian cement industry. At this time 93% of the whole capacity within the industry is
predicted on modern and environment-friendly dry process technology.

57
 SWOT ANALYSIS

STRENGTH OPPORTUNITY

THREAT WEAKNESS

It is a technique employed in business planning. It reflects current situation of sector.

This analysis allows this current and future potential of the arena to be evaluated. It’s also
use to create strategies for the long term by considering how weaknesses will become
turned into strengths and the way threats may be become opportunities.
STRENGTHS
Brand Name
Most Profitable Company In India
Lowest Cost Producer
Sea Transportation
Captive Power Plant
Fuel Efficiency
WEAKNESSES
Cement industry is very fragmented
Demand-supply gap, overcapacity
Increasing cost of production
High interest rates
Packaging

58
 OPPORTUNITIES
Government infrastructure spending.
Investment in industrial and commercial projects.
Commercial construction activity.
THREATS
Imports from Pakistan affecting markets in North India.
Excess overcapacity can hurt margins further as prices.
Consolidation through mergers and acquisitions

 CEMENT INDUSTRY DRIVERS AND INDICATIORS

Cement demand is primarily derived from the subsequent segments – Housing at – 60%-65%,
Infrastructure at 20%-25%, Commercial construction at 10%-15% and Industrial at 5% -
10%.

Demand
5%
15%
Housing
Infrastructure
20% 60% Commercial
Industrial

Graph No.8.3.4

59
 Housing Growth

• The Housing segment accounts for a big portion of the entire domestic demand for
cement in India.
• Growing urbanization, an increasing number of households and better employment are
primarily driving the demand for housing, accounting for 67 per cent of the overall
consumption.
• Initiatives by the government are expected to produce an impetus to construction activity
in rural and semi-urban areas through large infrastructure and development projects
respectively.

Infrastructure Growth

• The government is unequivocally centered around framework advancement to zest up

monetary development and is focusing on 100 shrewd urban areas.
• Infrastructure projects like Dedicated Freight Corridors furthermore new and upgraded
airports and ports are expected to further drive construction activity
• The government intends to expand the capacity of the railways and therefore the facilities
for handling and storage to ease the transportation of cement and reduce transportation
costs.

Development in Metro, Roads, Airports

• The metro rail ventures in Mumbai, Bangalore and Hyderabad and furthermore the
development present Delhi drives concrete interest.
• Airports modernization across significant urban areas will build interest for concrete
industry.
• The latest development within the Ahmedabad Metro Rail Project has also driven the
cement demand to an oversized extent.

60
 Government Initiatives towards New Schemes
•
• Initiatives by the new government like housing for every, shrewd city, Swachh Bharat
crusade, foundation spending, solid streets activity and an expansion in allotment of
assets to states are probably going to decide positive effect on the business inside the
ensuing three-six month.
• The government’s recent focus on road projects and an increase in state allocations will
drive infrastructure and housing demand which is able to indeed drive the market place
for cement industry
• Projects like brilliant urban areas and Atal Mission for Rejuvenation and Urban
Transformation (AMRUT) is foreseen to manage a flood inside the interest for concrete.

Urbanization and Industrialization development in the country

• The new urban development mission will specialise in development of 500 cities having
population of over 100,000 and few cities of religious and tourist importance.
Infrastructure could be a priority for the government’s economic policy; funding from
private in addition public sectors is about to extend sharply within the near term which
might anticipate the demand of cement industry in India.

 Cement Sector In Covid-19 Situation

Impact

 In FY20, Cement request had declined in FY20, which was just the second occasion of
decay inside the previous 15 years, after the demonetization influenced FY17.
 Due to such economic situation, it's affected the cement sector approximately 30%. As
even market gets open, cement companies won’t be having a market to sell as there
will be fear within the minds of construction labour.
 Demand decline of around 40 per cent in May2020.
 Cement request development is anticipated to observe an uncommon constriction of 10-
15% in financial 21 after lockdown estimates taken by Indian government to check the
spread of overall pandemic Covid-19.

61
  Demand momentum suffered the brunt of pan- India shutdowns in late
Q4FY20 similarly as Q1-FY21 as construction activities take successful.
 Lower capital expenditures by government, as they have given diversion of funds
towards health and public welfare (government-led projects account for 35-40% of
cement demand) will sadden demand growth, especially in 2021.
 Weak business sentiment and issues due to labour unavailability has also affected the
total constructions sector which has directly affected demand of cement within
the country.
 Already fragile realty and private individual housing demand can be impacted as
consumer sentiment remains weak. Commercial land demand could also decline.
 Government spending will stay a key monitorable as monetary control debilitates on back
of financial estimates taken in wake of Covid-19 breakout.
 There would be continued labour force and supply chain disruptions for 20-30 days once
the lockdown is lifted, and there will be lingering impact of the slowdown on
infrastructure and discretionary spending.
Further Expectations
 Demand decline of around 40 per cent in May. It is expects a gradual recovery thereafter
once lockdown is lifted.
 Demand revival expected in last half of the fiscal led by release of pent up demand and
gradual devour in government spending on infrastructure and affordable housing projects
in urban belts as worker shortage reduces.
 Key framework extends particularly on streets, water system, and metros to drive
development.
 In FY20, Cement request had declined in FY20, which was just the second occasion of
decay inside the previous 15 years, after the demonetization influenced FY17..
 Rural housing, PMAY-Rural, PMGSY, and spend on key infrastructure
projects are the state of grace for the arena within the half the fiscal.
 The agency expects an occasional single-digit growth in Q2 (July-September) period
and a giant recovery happening only in Q3 (October-December).

62
 8.4 FUNDAMENTAL ANALYSIS

Ultra Tech Cement

Ultra Tech Cement Ltd is that the biggest maker of dark concrete, prepared blend concrete
(RMC) and white concrete in India. With a capacity of 117.35 MTPA, it’s the third largest
cement producer within the world, (Outside of China).

23 coordinated plants, 1 clinkerisation plant, 27 granulating units and 7 mass terminals, such
huge units Ultra Tech Cement have Across India, UAE, Bahrain, Bangladesh and Sri Lanka they
have their operation span.

With 100+ Ready Mix Concrete (RMC) plants in 35 urban communities, UltraTech is that the
biggest maker of cement in India. It consolidates a large number of claims to fame cements that
address explicit issues of observing clients. Building Products business is an advancement center
point that gives a variety of experimentally built items to take into account new-age
developments.

UltraTech pioneered the UltraTech Building Solutions (UBS) concept to supply individual home
builders with a one-stop-shop solution for building their homes. This is the often the primary
pan-India multi-category retail chain catering to the wants of individual home builders (IHBs).
The aim of this initiative is to have interaction with home builders in any respect stages of the
development cycle, empower them with quality construction products and services, and assist
within the completion of their dream homes.

63
 Key Persons
 Chairman- Kumar Mangalam Birla
 Directors- K. K. Maheshwari, Managing Director
o K. C. Jhanwar, Deputy Managing Director & Chief Manufacturing Officer
o Atul Daga, Whole-time Director & CFO
 Independent Directors- Arun Adhikari
 Mrs. Alka Bharucha
 G. M. Dave
 Mrs. Sukanya Kripalu
 S. B. Mathur
 Mrs. Renuka Ramnath
 Products
Ultra Tech Cement
Ultra Tech Concrete
Ultra Tech Building Products
Ultra Tech Building Solutions
Birla White Cement
 Achievements:

Years Awards

1997 Rajiv Gandhi National Quality Award Vikram Cement Works.

Award for Excellence in Consistent TPM Commitment Vikram
2001 Cement Works.

2002 National Award for Quality Excellence Vikram Cement Works

Manufacturing Excellence & Competitive Advantage Award
2002 Vikram Cement Works.

2008 Golden Peacock National Quality Award Vikram Cement Works.

IMC Ramkrishna Bajaj National Quality Award Vikram Cement
2010 Works.

64
 Table No. 9.1

 Competitors
 Ambuja Cement
 The Indian Cement
 ACC
 J.K. Lakshmi
 Business Performance

Particulars FY19 FY18 FY17 FY16 FY 15

Installed capacity
88.50 85.00 66.25 64.65 60.15
(MTPA)

Production(MMT) 67.20 57.23 47.91 47.56 43.88

Capacity Utilization 76% 71% 72% 76% 75%

Table No. 9.2

 Sales

Particulars FY19 FY18 FY17 FY16 FY 15

69.52 57.75 47.62 47.13 43.95

Domestic Sales

3.00 2.90 2.56 0.84 0.90

Exports & Others

72.52 60.65 50.19 47.97 44.85

Total Sales Volume

Table No. 9.3

65
 Financial Performance:
Rs (in Crores)

Particulars FY20 FY19 FY18 FY17 FY 16

Sales 41,375.75 36174.95 30384.80 24551.38 24189.45

Expenses 31996.87 29183.23 23906.82 18922.48 19082.19

EBITDA 9378.88 6991.72 6477.98 5628.90 5107.26

Depreciation 2454.90 2010.27 1763.56 1267.87 1297.0

EBIT 6923.98 4981.45 4714.42 4361.03 3810.22

Interest 1704.22 1419.15 1186.30 571.39 511.66

EBT 5219.76 3562.30 3528.12 3789.64 3298.56

TAX -235.78 1106.58 1070.56 1148.23 928.40

EAT 5455.54 2455.72 2231.28 2627.72 2370.16

EPS 189.01 89.42 81.25 95.72 86.37

Table No. 9.4

 Shareholding -Pattern:

Particulars 2017 2018 2019 2020

Promoters 62.05 61.69 60.19 59.70

FIIs 22.02 20.38 17.60 16.48

DIIs 5.67 7.58 12.99 14.15

Government 0.03 0.04 0.07 0.07

Public 10.05 10.24 9.08 9.53

Table No. 9.5

66
 80
60
40 2017
20 2018
0 2019
2020

Graph No. 9.1

Usefulness

The composition in which shares are distributed plays a major role in effectiveness and
efficiency of companies. Whether be banks, foreign investors, preferential allotment, government
or general public shares should be allotted in proper quota/ composition as it has major impact on
company’s efficiency.

Shareholding pattern allows investor to know about stakes held in the company and through
looking analyzing data it can be interpreted.

Analyzing 5 years data it can be said that,

1. Promoter’s stake has reduced which might reflect that promoters are selling their shares.
Constant promoter’s stake is always good for the company as it reflects that promoter is
confident about the current performance as well as future of the company.
2. Foreign Institutional Investors (FII) stake in the company is reducing in the last 5 years.
The reason could be that foreign investors investing in other competitor company or Ultra
Tech cement or government failed to attract FII.
3. It is seen that Domestic Institutional Investor has increased their stake in the company
which means that domestic investor has taken interest in to the company due to
company’s business performance.
4. When public stake increases it reflects that company has successfully attracted public to
invest in the company through overall business performance. As Ultra Tech is one of the
top companies, it has increased its overall capacity and pan base network with increase in
sales which helped them to gain public investment.

67
 SHREE CEMENT

Shree Cement is principally an Indian concrete producer. In the year 1979, it was established in
Beawar in the Ajmer region of Rajasthan and now headquartered in Kolkata, is one of the
greatest concrete creators in Northern India. Its Headquarter is situated in Kolkata, India. It has
multi-brand marketing strategy with an extensive dealer and distribution network. It is known for
Strong financial profile, AAA credit rating and net-cash position. They have Experienced
promoters supported by qualified and a professional Boar.

Shree Cement came out with a Public Issue in the year 1984. It is listed on National Stock
Exchange (―NSE‖) and Bombay Stock Exchange (―BSE‖). It is market leader in the states of
Rajasthan, Delhi and Haryana.

 Shree Cement is among the top 3 cement group in India (In terms of Cement Capacity).
 Among the top 50 listed companies in India (In terms of market Capitalization as on 31st
March, 2019).
 1st overseas acquisition- Acquisition of union cement company in Emirate of Ras-al-
Khaimah, United Arub Emirates.
 It has largest waste heat recovery based power plants in the global cement industry
excluding china.
 Cement capacity in India (As on 31st March, 2020)
 40.4 MTPA Third Largest Cement Group in India
 Power Capacity in India (As on 31st March, 2020)
 742 MW
 No. of Manufacturing Locations in India

68
  Integrated Units-4
 Grinding Units- 8
 It has lowest total per tonne.
 Evolution of the Company
 1979: Incorporation
 1984: IPO and listing on BSE in 1985
 1985: Installed first cement unit of 0.6 MTPA at Beawar
 1997: Rights Issue
 2003: First Captive Power Plant of 36 MW at Beawar
 2008: First Waste Heat Recovery Plant at Beawar
 2011 : First Power Plant at Beawar of 150 MW capacity
 2015: Acquisition of 1.5 MTPA grinding unit at Panipat.
 2018: Acquired controlling stake in Union Cement Company in UAE with 4 MTPA
capacity and set up a 21 MW Wind Power Plant in Karnataka

 Key People
 Chairman- Shri B.G.Bangur
 Managing Director- Shri H.M.Bangur
 Director- Shri R.L.Gaggar
o Shri O.P.Setia
o Shri Shreekant Somany
o Shri Nitin Desai
o Dr.Y.K.Alagh
 Whole Time Director- Shri Prakash Narayan Chhangani
 Independent Director- Uma Ghurka

69
 Achievements:

Years Awards

2010-2011 NCCBM Award for Second Best Quality Excellence for the year 2010–11.

Best Innovation Award Gold by CIOL Dataquest Enterprise C–Change

2011-2012
Enterprise Awards 2011.

2012-2013 Golden Peacock Business Excellence Award for the year 2013

 Plant Locations

 North India
1. Rajasthan
a. Beawar
b. Ras
c. Khushkhera
d. Suratgarh
e. Jobner (Jaipur)
2. Uttarakhand
a. Laksar(Roorkee)
3. Harayana
a. Panipat
4. Uttar Pradesh
a. Bulandshahr
 East India
1. Bihar
a. Aurangabad
2. Chhattisgarh
b. Baloda Bazaar (Raipur)
3. Jharkhand
c. Burudih (Saraikela-Kharswan)

70
  South India
1. Karnataka
a. Kodla (Kalaburagi)

 Business Performance

Particulars FY19 FY18 FY17 FY16 FY 15

Sales 12175.62 11967.40 10222.15 8956.07 6186.32

Expenses 8229.47 9069.18 7360.32 6081.13 4106.73

EBITDA 3946.15 2898.22 2861.83 2874.94 2079.59

Depreciation 1699.42 1391.68 899.40 1214.71 827.57

EBIT 2246.73 1506.54 1962.43 1660.23 1252.02

Interest 286.52 246.98 135.27 129.42 75.7

EBT 1960.21 1259.56 1827.16 1530.81 1176.25

TAX 390.03 130.38 442.98 191.70 33.12

EAT 1570.18 951.05 1384.18 1339.11 1143.13

EPS 435.19 273.00 397.33 384.39 437.51

 Shareholding -Pattern:

Particulars 2017 2018 2019 2020

Promoters 64.79 64.79 62.55 62.55

FIIs 13.28 13.13 13.20 11.55

DIIs 16.05 16.57 9.89 11.65

Public 5.89 5.52 14.35 14.24

71
 70
60
50
40 2017
30
20 2018
10 2019
0
2020

Analyzing 5 years data it can be said that,

1. Promoter’s stake in the company has come down in 2019 but it remained constant for
2 consecutive years.
2. FII’s stake in the company came down in the year 2020 which might be due to
economic slowdown in the country.
3. DII’s stake in the company was fluctuating in the company but again they showed
their interest in the company and hence their stake increased. It is good for the
company that when FII’s reduced their stake DII’s stake raised up as these things
helps to maintain the balance the company.

72
 AMBUJA CEMENT

In 1983, Narotam Sekhsaria and Suresh Neotia, two brokers with almost no information on
concrete or assembling established Ambuja Cement. It commenced cement production in 1986.
Ambuja Cements Ltd was initially called as Gujarat Ambuja Cements Ltd. Now, Holcim holds a
little over 50% equity in ACL. Global cement major Holcim, acquired management control of
the Company in 2006.

Its current cement capacity is 27.25 million tonnes. The nation over, the Company has 5
coordinated concrete assembling plants and 8 concrete crushing units. A reputation of being one
of the most efficient cement manufacturers in the world is enjoyed by ACL. Its condition
assurance measures are viewed as comparable to the best in the nation. It is known for one of the
most profitable and innovative cement companies in India.

 Points Noted
 Five integrated cement manufacturing plants.
 Eight cement grinding units.
 Total income of Rs 26,412.38 crore (US$ 3.77 billion) in 2018 and Rs 20,462.64 crore (US$
2.93 billion) in 9M2019.
 Most trusted brand in Indian cement industry.

 Products

Ambuja's products are known for their high strength and high performance.

Ambuja Cement

73
 Ambuja Roof Special
Ambuja Cool Walls
Ambuja Cement Compocem
Ambuja Buildcem
Ambuja Powercem
Ambuja Railcem
Alccofine Micro Material
 Key People

 Board of Directors
 Chairman- Ns Sekhsaria
 Vice Chairman- Jan Jenisch
 Director- Martin Kriegner
o Christof Hassig
o Roland Kohler
o Then Hwee Tan
o Mahendra kumar sharma
 Managing Director And Ceo- Neeraj Akhoury
 Independent Director- Nasser Munjee
Rajendra P Chitale
Shailesh Haribhakti
Shiksha Sharma
 Business Performance

Particulars FY19 FY18 FY17 FY16 FY 15

Sales 12094.40 11731.74 10816.19 9706.85 9819.59

Expenses 9519.03 9465.30 8516.96 7504.29 7929.93

EBITDA 2575.37 2266.44 2299.23 2202.56 1889.66

Depreciation 543.83 548.09 572.92 848.85 625.66

EBIT 2031.54 1718.35 1726.31 1353.71 1264.00

74
 Interest 83.52 82.33 107.19 74.24 91.79

EBT 1948.02 1636.02 1619.12 1279.47 1172.21

TAX 419.48 19.06 369.55 347.23 364.65

EAT 1528.54 1487.01 1249.57 932.24 807.56

EPS 7.70 7.49 6.29 4.69 5.20

 Shareholding - Pattern:

Particulars 2017 2018 2019 2020

Promoters 63.56 63.46 63.39 63.27

FIIs 17.22 17.05 16.38 16.25

DIIs 11.99 11.72 13.27 13.60

Government 0.14 0.00 0.20 0.26

Public 7.09 7.77 6.67 6.61

70
60
50
40 2017
30
20 2018
10
0 2019
2020

Analysis:

1. As Promoter’s stake in the company was almost constant in the company states that
promoter did not sold their shares it reflect that they are confident about the performance
of the company. It is good for the company as investor gets attracted.

75
 2. Even though FII’s reduce their stake in the company DII’s stake increased and it is good
sign from the company perspective and country’s economy perspective also. As when FII
sell their shares it affects both, company and market also and that time increase in DII’s
stake helps to maintain the balance in the company and market also.

Comparative Performance Analysis

Particulars Ultra Tech Shree Ambuja Nifty

1 Year
-14.97% 6.04% 7.01% 1.75%
Change

BETA 0.94 1.08 1.01 1

Market Cap 110771.8 77819.5 39305.85

Dividend
0.34 0.51 0.76
Yield
P/E 20.51 50.68 18.25
Volume
580750 61888 4904595
traded

Table No. 9.6

ANALYSIS

Shree Cement and Ambuja cement have outperformed the broader indices, which is evident
from the fact that these 2 have a Beta of more than 1.
Meanwhile Ultra Tech has given negative return. Its Beta is less than 1. It can be used for
hedging strategies in portfolio.
The average industry P/E is 22.68 times. Shree cement trades at 50.68 times of its price
which shows that it is overvalued as compared to its peers.
Ambuja cement delivered high returns with the highest dividend yield among the 3
companies which shows that it is better stock compared to the other 2 in terms of return. It
also has moderate Beta which indicates that it gave highest return by taking moderate amount
of risk.

76
 One possible portfolio combination by considering 3 stocks only could be a short position in
ultra tech and going long in shree and Ambuja.
All three stocks have decent volume which shows that these are highly liquid stocks.

Current Scenario

Particulars Ultra Tech Shree Cement Ambuja cement

Market Cap Rs 110,772 Cr Rs 77,820 Cr. Rs 39,306 Cr.

Current Price Rs 3,838 Rs 21,568 Rs 197.95

Rs
52 weeks High / Low Rs 4754.10 / 2910.00 25355.00 / 15410.00 Rs 225.00 / 136.55

Book Value 1,327 3,650 116.39

Stock P/E 20.51 50.68 18.25
Dividend Yield 0.34 % 0.51 % 0.76 %
ROCE 13.05 % 15.51 % 17.37 %
ROE 16.32 % 13.45 % 9.01 %
Sales Growth 19.38 % 14.40 % 10.49 %

Face Value Rs 10 Rs 10 Rs 2

Table No. 9.7

Interpretation:
1. Market Capitalization

Market Capitalization is basically the value of shares outstanding of a given company. It is

calculated on the basis of value of the share on stock market at a particular date. Various
companies compete within themselves to increase their market capitalization. It is preferred that
it should always be as high as possible in terms of amount as investors consider it as a major
aspect in determining whether to invest in a company or not.

77
  Ultra Tech cement have highest market cap and Ambuja cement have lowest market cap.
This shows that Ambuja cement needs focus on attracting investor to invest by increasing
business performance which would reflect on their financials.
 Addition to this, they also need to increase their management and working efficiency
which will help to increase profitability. They can also increase their dividend payout to
attract investment.
 The more they increase their performance, more the investor will invest and thus market
cap of Ambuja cement would go up

2. ROCE

Capital is the sum of money which is invested in business. Any company would love to enjoy a
higher return on capital. More the higher the return on capital better it is. It depicts the efficiency
at which the business operations is being carried out and relates directly with the operating profit
of the company.

Formula for calculating ROCE is as follows- Net Operating Profit/ Capital Employed.

 Even though market cap of Ultra Tech is more but its ROCE is lower as compared to
others.
 Ambuja cement’s ROCE is high which reflects that this company is generating higher
level of returns through their capital employed. Having better management, operational
efficiency, expertise etc. helps to deploy and use its capital in appropriate manner so that
higher returns can be generated which Ambuja cement is doing.
 Ultra Tech and Shree cement must focus on its operational efficiency, expertise,
appropriate allocation of capital so that they could generate higher return on the capital
they have employed.
3. ROE

This ratio shows how well the company is being managed by the management. It is the amount
of return on equity capital of the company. Thus precisely, it refers to management approach of
using shareholders fund. Formula for calculating ROE is as follows- Net Income/ Average
Stockholder’s Equity.

78
  Ultra Tech’s ROE represents that their management is well enough and they have given
better returns to their shareholders by using they investment is best appropriate manner.
 Whereas Ambuja cement’s shareholder did not get appropriate returns on their equity as
their ROE reflects that. To increase the ROE, company must have well enough
management which is capable to give returns to their investor.
 Shree cement ROE is at good level as they have used their shareholders’ fund and gave
returns to their shareholders.

4. Stock P/E

Simply speaking it shows whether a stock is expensive or cheap. If the price of stock is high it
means it is expensive and if it is low it is cheaper. The P/E ratio helps the investor to determine
the investment decision as one may calculate the price of shares according to his own
calculations and workings.

Formula for calculating P/E ratio is as follows- Market price per share/ Earnings per share.

 The average industry P/E is 22.68 times. Shree cement trades at 50.68 times of its price
which shows that it is overvalued as compared to its peers.
 Lower P/E like Ambuja shows that it is undervalued share.

5. Dividend Yield

It is the percentage of dividend that the company pays related to stock price. An investor expects
the company to pay higher dividend so that his return on portfolio can be maximized. Enhanced
and matured company usually tend to pay dividend each year to it’s investor in order to attract
further capital investment by them.

 Ambuja cement delivered high returns with the highest dividend yield among the 3
companies which shows that it is better stock compared to the other 2 in terms of return.
 Higher dividend attracts more investor.

79
 Mapping of Cement Companies

BRAND High Ultra

Tech

Medium Ambuja

Shree
Low

High Medium Low

Price
 Analysis
Mapping of Cement companies helps to the investor while doing analysis for choosing best stock
among others.
As it is very important for the new investor to know and analyze where he can invest considering
the brand image and share price. As this one of the parameters which investor must consider
before investment.
Looking at the mapping, it becomes easier for the investor where he can invest if he/she has
some option and can choose suitable stock for him.

Ultra Tech cement is Top brand as it has pan based availability in the country. It had
launched its premium product which had good demand in the market. But its share price
is at medium level which is between 2910-4754 (high-low). We can say that this
company is might for the investor who can afford medium level of share price.
Ambuja Cement is considered to be at medium level brand whose share price is very low.
An investor who wants to invest in cement stock but can-not afford high share price
Ambuja cement might be good company for them. Its stock price is around 136-225
(High-low).
Shree cement’s share prices are too high and it is only for the investor who can afford
high level of stocks in their portfolio.154100-25355(high-low).

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 RATIO ANALYSIS
1. LIQUIDITY RATIO
A significant class of money related measurements used to decide an account holder's capacity to
take care of current obligation commitments without raising outside capital could be a Liquidity
Ratio.

 CURRENT RATIO:

Current ratio indicates company’s ability to meet its short-term debt obligations; the higher the
ratio; the more liquidity is there. It indicates whether the company has enough cash and cash
equivalents to cover its short term liabilities.

If current assets are more than current liability then, it is generally considered to have good short
term financial strength and if it seem vise a versa then it reflect poor financial condition.

Current Assets
Current Ratio =
Current Liabilities

Year 2015 2016 2017 2018 2019

Ultra Tech Cement 1.04 0.9 0.85 0.94 1.02
Shree Cement 1.55 1.54 1.65 1.92 2.01
Ambuja Cement 2.03 1.23 1.34 1.55 1.54

2.5
Current Ratio
2.03 1.92 2.01
2
1.54 1.65
1.55 1.55 1.54
1.5 1.23
1.34
Ultra Tech
Ratios

1.04 0.94 1.02

1 0.9 0.85 cement
Shree cement
0.5
Ambuja cement
0
2015 2016 2017 2018 2019
Years

81
 Interpretation
 It can be seen that Ultra Tech Cement’s ability to meet its short term obligation lowered
down after 2015 continuously for 4 years and so it became lower than 1 which shows that
for payment of its debt, company did not have sufficient short term capital.
 Shree cements performance increased over the period of time in last 5 years hence,
Company’s ability to their obligation is at good position which shows company has
current asset more than current liability. It is like company has Rs2 for payment of Rs 1
which is double of obligation to pay.
 Ambuja cement has enough assets to pay its liability as they have assets more than
liability. But in last five years company’s current liability is increasing hence debt
obligation is high hence company needs to increase their current asset.

 QUICK RATIO/LIQUID RATIO:

Quick ratio which is also known as liquid ratio, it measures the ability to meet its short-term
obligations with its most liquid assets which are quickly convertible into cash. Current Assets
other than stock and prepaid expenses are considered as Quick ratio.

Total Quick Asset

Quick Ratio:
Total Current Liabilities

Year 2015 2016 2017 2018 2019

Ultra Tech Cement 0.43 0.52 0.55 0.54 0.75
Shree Cement 0.81 1.02 0.92 0.92 1.05
Ambuja Cement 1.18 1.08 1.21 1.41 1.54

82
 Quick Ratio
1.8
1.6 1.54
1.41
1.4
1.18 1.08 1.21
1.2 1.02 1.05
1 0.92 0.92 Ultra Tech
Ratios 0.8
0.81
0.75 cement
0.6 0.52 0.55 0.54 Shree cement
0.43
0.4
0.2 Ambuja cement
0
2015 2016 2017 2018 2019
Years

Interpretation
 Ultra Tech Cement has less liquidity as compared to its debt to meet its short term
obligation but company’s liquidity is increasing is in last five years.
 Shree Cements Quick ratios are fluctuating and not stable but it seems that company is
almost near to good position to repay their liabilities.
 Ambuja Cement’s assets are more that liability and also financial ability is increasing
continuously in last 5 years which is good sign for the company.

2. SOLVENCY RATIO

It is also called financial leverage ratios. These ratios compare a company's debt levels with its
assets, equity, and earnings

 INTEREST COVERAGE RATIO

The interest coverage ratio is employed to work out how easily a company will pay their interest
expenses on outstanding debt. Companies have to have enough earnings to cover interest
payments so as to survive future.

A company’s ability to satisfy its interest obligations is a facet of its solvency and is thus an
awfully important think about factor in the return for shareholders.

EBIT
. INTEREST COVERAGE RATIO=
INTEREST EXPENSE

83
 Year 2015 2016 2017 2018 2019
Ultra Tech Cement 6.27 7.45 7.63 3.97 3.51
Shree Cement 4.62 25.45 21.08 16.92 6.34
Ambuja Cement 13.77 18.23 16.11 20.87 24.32

Interest Coverage Ratio

30
25.45 24.32
25
21.08 20.87
20 18.23
16.1116.92
15 13.77
Ultra Tech
RATIOS

10 6.27 7.45 7.63 Cement

6.34
4.62 3.97 3.51
5
0
2015 2016 2017 2018 2019
YEARS

 This ratio shows the ability of company to pay its interest on its debt and the actual
principle amount also. In last 2 years Ultra Tech Cement’s EBIT has reduced in last 5
years which says that company’s earning has reduced.
 Shree Cement’s interest payment ability is at good level but it is fluctuating over the
period of time which shows that company’s EBIT is fluctuating.
 Ambuja Cement’s financial performance shows that their interest coverage ratio is
increasing hence it can pay interest and principal amount easily.

3. PROFITABILITY RATIOS

These ratios convey how well a corporation can generate profits from its operations.

 NET PROFIT MARGIN RATIO:

Net profit margin could be a measure of profitability. It’s the net profit as a percentage of the
revenue. It’s also called as net margin.

It helps investors assess if a company’s management is generating enough benefit that is profit
from its operation.
Net Profit
Net Profit Margin =
Revenue
84
 Year 2015 2016 2017 2018 2019
Ultra Tech Cement 9 10 11 8 7
Shree Cement 6.60 20.73 15.58 14.07 8.11
Ambuja Cement 13.10 13.09 11.94 10.13 8.53

Net Profit Margin Ratio

25
20.73
20
15.58 14.07
15 13.1 13.09 Ultra Tech
11 11.94 10.13
RATIOS

10 Cement
10 9 8 8.118.53 Shree Cement
6.6 7
5

0
2015 2016 2017 2018 2019
YEARS

Interpretation

 It can be interpret that Ultra Tech’s Net Profit as compared to its revenue is not stable
hence the financial performance is not going well.
 Shree cement has done really well in last five years and hence, Company’s Net profit was
high and so the Net Profit Margin Ratio was also high but it started declining due to
lowered net profit in last 3 years.
 Ambuja Cement’s Net Margin was also reduced hence company needs to increase its net
profit as compared to its revenue.

 RETURN ON CAPITAL EMPLOYED RATIO:

Return on capital employed (ROCE) may be a financial ratio that measures a company's
profitability and also the efficiency with which its capital is employed.

The ratio measures how well an organization is generating profits from its capital. The ROCE
ratio is taken into account a very important profitability ratio and is employed often by investors
when screening for suitable investment candidates.

85
 EBIT
Return on Capital Employed =
Capital Employed

Year 2015 2016 2017 2018 2019

Ultra Tech Cement 13.53 14.30 14.95 11.09 10.94
Shree Cement 9.45 16.53 18.46 15.96 12.17
Ambuja Cement 12.23 6.98 8.63 8.16 9.13

Interpretation

 Return on Capital Employed shows the profits generated by the companies from
employed capital employed. Ultra Tech Cement, Shree Cement, and Ambuja Cement’s
ROCE reflects that they have generated enough profit from their capital employed.
 This shows that company performs well and hence their profitability ratio is also high.

RoE
20 18.46
16.53 15.96
14.3 14.95
15 13.53 12.17
12.23 11.09 10.94
RATIOS

10 9.45 8.63 9.13

8.16 Ultra Tech Cement
6.98
Shree Cement
5
Ambuja Cement

0
2015 2016 2017 2018 2019

YEARS

86
 4. MARKET PROSPECT RATIO

These are the foremost commonly used ratios in fundamental analysis. To predict earnings and
future performance, investors use these metrics.

 EARNING PER SHARE:

A company’s profit divided by the outstanding shares of its stocks, Earnings per share (EPS) are
calculated. The resulting number is an indicator of a company’s profitability. The upper a
company's EPS, the more profitable it’s considered.

Net Income
Earning Per Share =
Weighted Average Shares Outstanding

Year 2015 2016 2017 2018 2019

Ultra Tech Cement 73.44 86.37 95.74 81.27 89.48
Shree Cement 122 328 384 397 273
Ambuja Cement 9.24 8.97 9.18 10.90 10.44

Interpretation

 Ultra Tech Cement, Shree Cement and Ambuja Cement has good level of EPS which
shows that companies earns well enough net income from their operation/business.
 This ratio reflects the net earnings of companies on one share. This number effects on
inventors and shows that how company is performing in its respective sector.

87
 Earning Per Share
500
384 397
400
328
300 273
Ultra Tech
200 Cement
122
86.37 95.74 81.27 89.48
100 73.44
9.24 8.97 9.18 10.9 10.44
0
2015 2016 2017 2018 2019
YEARS

 DIVIDEND PAYOUT RATIO:

The total amount of dividends paid out to shareholders relative to the net income of the corporate
is Dividend Payout Ratio.

It is the proportion that’s percentage of earnings paid to shareholders in dividends. It’s

sometimes also called as ―pay-cut ratio‖. It states that what proportion money is returning to
shareholder versus what quantity it’s keeping there to reinvest in growth, pay-off debt or boost
cash reserves.

Dividend Paid
Dividend Payout Ratio =
Net Income

Year 2015 2016 2017 2018 2019

Ultra Tech Cement 12.26 12.37 9.92 12.30 11.74
Shree Cement 19.61 11.58 30.17 11.07 20.14
Ambuja Cement 53.80 46.61 44.49 26.70 19.48

88
 Dividend Payout Ratio
60 53.8
50 46.61
44.49
40
30.17
30 26.7
19.61 20.14 19.48 Ultra Tech
20 11.58 Cement
12.26 12.37 12.3 11.07 11.74
9.92
10
0
2015 2016 2017
YEARS 2018 2019

 Ultra Tech Cement’s Dividend payout ratio is nearly consistent in last 5 years which says
that company paying its dividend from income earned from at almost same level.
 Dividend Payout Ratio of Shree cement is fluctuating every year and this chart shows that
company has paid highest dividend in 2017.
 Ambuja Cement’s dividend payout ratio has decreased since 2015 which show that
company is using its profit/ revenue for its growth purpose. Decreased proportion mirrors
that organization centers around development of business rather that profit installment.

 PRICE TO EARNINGS RATIO

The Price Earnings Ratio (P/E Ratio) is the connection between an organization's stock cost and
profit per share (EPS). It is a well-known proportion that gives financial specialists a superior
feeling of the estimation of the organization.

The P/E ratio helps investors determine the market value of a stock as compared to
the company's earnings. In short, the P/E proportion shows what the market is eager to pay today
for a stock dependent on its past or future income. A high P/E could suggest that a stock's cost is
high relative with salary and conceivably misrepresented. On the other hand, a low P/E may
show that the current stock cost is low relative with salary.

P Market Value Per Share

Ratios =
E Earnings Per Share

89
 Year 2015 2016 2017 2018 2019
Ultra Tech Cement 37.60 35.74 40.34 48.79 45.11
Shree Cement 92.55 37.86 44.28 40.73 64.51
Ambuja Cement 39.0 37.05 35.51 20.46 18.61

P/E Ratio
100 92.55

80
64.51
60 44.28 48.79 45.11
RATIOS

39 37.86
37.6 40.34 40.73 Ultra Tech
40 35.74 37.05 35.51
20.46 18.61 Cement
20

0
2015 2016 2017 2018 2019
YEARS

Interpretation

 Ultra Tech’s P/E ratios increased in last five years continuously which show that
company’s market value per share has increased relative to earnings per share of
company. It shows its offer is esteemed at elevated level and is expanding.
 Shree Cement’s P/E ratio has drastically come down after 2015 but then in 2019
company’s P/E ratio increased at good level due to its good operation performance.
 As Ambuja Cement’s market value per share came down, its P/E ratio also reduced in last
5 years which reflects that its business performance is not going good in this market.

90
 8.5 TECHNICAL ANALYSIS
Technical analysis is a method for analyzing and foreseeing value developments in the monetary
markets, by utilizing authentic value diagrams and market measurements. It depends on the
possibility that if a broker can distinguish past market designs, they can shape a genuinely exact
forecast of future value directions.

Technical analysis is based purely on the price charts of an asset. It is exclusively the
distinguishing proof of examples on a diagram that is utilized to foresee future developments.

Technical traders accept that current or past value activity in the market is the most solid pointer
of future value activity. Specialized examination isn't just utilized by specialized brokers.
Numerous essential brokers utilize central examination to decide if to become tied up with a
market, yet having settled on that choice, at that point utilize specialized investigation to pinpoint
great, okay purchase section value levels.
Technical analysis include putting stock data like costs, volumes and open enthusiasm on a
diagram and applying different examples and markers to it so as to evaluate the future value
developments. The time period where specialized investigation is applied may go from Intra-day
(1-minute, 5-minutes, 10-minutes, 15-minutes, 30-minutes or hourly), day by day, week by week
or month to month value information an excessive number of years.
The Basis of Technical Analysis
What makes Technical Analysis a successful apparatus to investigate value conduct is clarified
by following speculations given by Charles Dow:
• Price discounts everything
• Price movements are not totally random
• What is more important than why

 Basic Assumption in Technical Analysis

1. The Market Discounts Everything: Technical analysis investigation expect that, at some
random time, a stock's cost reflects everything that has or could influence the organization
including basic factor, technical analysts accept that the organization's basics, alongside more
extensive monetary factors and market brain science, are completely evaluated into the stock,
evacuating the need to really consider these components independently.

91
 2. Price Moves in Trends: In technical analysis, value developments are accepted to follow
patterns. Specialized examiners accept that once a pattern gets set up, value developments are
bound to be a similar way.
3. History Tends To Repeat Itself: Another significant thought in specialized investigation is
that history will in general recurrent itself, for the most part as far as value development.
Specialized examination utilizes outline examples to investigate showcase developments and get
patterns. Albeit a significant number of these outlines have been utilized for over 100 years, they
are still accepted to be important on the grounds that they represent designs in value
developments that frequently rehash themselves.

 TYPES OF CHARTS
Charts are graphical presentations of significant worth information of securities after some time.
Graphs plot certain data subject to a blend of significant worth, volume similarly as time ranges

Line Charts

 Line diagrams are the most fundamental type of outlines, they are made out of a solitary
line from left to right that interfaces the end costs. By and large, just the end cost is
diagramed, introduced by a solitary point.
 This is a famous sort of diagram utilized in introductions and reports to give an extremely
broad perspective on the recorded and current course.
 It is clear just as a straightforward method of getting a general thought of the value
development's heading in the market, which is favored by certain dealers.
 While this sort of graph doesn't give a lot of understanding into intraday value
developments, numerous brokers believe the end cost to be a higher priority than the
open, high, or low cost inside a given period.

92
Bar Chart

 One of the fundamental instruments of specialized examination is the bar diagram. Bar
graphs are likewise alluded to as open-high-low-close (OHLC) diagrams. They are
included a progression of vertical lines that show the value extend during that Time
Frame.
 Bar outlines empower dealers to find designs all the more effectively as they consider all
the costs, open, high, low and close.
 The opening cost is the level scramble on the left half of the even line and the end cost is
situated on the correct side of the line.
 On the off chance that the initial cost is lower than the end value, the line is frequently
shaded dark (or green) to speak to a rising period. The inverse is valid for a falling
period, which is spoken to by red shading.

93
Candlestick Chart

 Another sort of outline utilized in the specialized examination is the candle diagram,
alleged on the grounds that the primary segment of the graph which speaks to costs
resembles a candle, with a thick 'body' and normally, a line stretching out above and
underneath it, called the upper shadow and lower shadow, individually.
 The head of the upper shadow speaks to the significant expense, while the base of the
lower shadow shows the low cost. Examples are framed both by the genuine body and the
shadows. Candle designs are generally helpful over brief timeframes, and for the most
part have hugeness at the head of an upswing or the base of a downtrend, when the
examples frequently show an inversion of the pattern.
 The more extensive piece of the candle is appeared between the opening and shutting
cost. It is normally shaded in dark/red when the protections close on a lower cost and
white/green the reverse way around.
 The more slender pieces of the candle are ordinarily alluded to as the upper/lower w0icks
or as shadows. These show us the most noteworthy and additionally least costs during
that time span, contrasted with the end just as opening cost.

94
 9. FINDINGS
 India is known to be second biggest concrete maker inside the world and records for
more than 8 % of the world's introduced limit starting at 2019.
 Cement production reached 334.48 million tonnes (MT) in FY20.
 India’s cement production capacity is predicted to achieve 550MT by 2025.
 A variety of the recent major initiatives like development of 100 smart cities are expected
to provide significant boost to the current sector.
 Cement creation is reached to 334.48 million tons in FY2020 and its foreseen to contact
550 million tons by FY 2020. Out of the complete limit, 98% lies with the private part
and furthermore the rest with the open division.
 The highest 20 cement companies account for nearly 70 % of the overall cement
production of the country.
 210 colossal solid plants speak to a joined presented breaking point of in excess of 410
million tons, with 350 little plants speaking to the update. Out of those 210 enormous
concrete plants, 77 are situated inside the conditions of Andhra Pradesh, Rajasthan and
Tamil Nadu.
 Limit expansion of 20 million tons for every annum (MTPA) is foreseen in till FY22.
 In FY20, Cement request had declined in FY20, which was just the second occasion of
decay inside the previous 15 years, after the demonetization influenced FY17.
 The move is predicted to spice up the demand of cement from the housing segment. As
per Union Budget 2019-20, Government is expected to upgrade 1,25,000 kms of road
length over the following five years.
 An oversized of foreign players are expected to enter the cement sector, as a results of the
profit margins and steady demand.
 Demand decline of around 40 per cent in May. It is expects a gradual recovery thereafter
once lockdown is lifted.
 Demand revival expected in last half of the fiscal led by release of pent up demand and
gradual devour in government spending on infrastructure and affordable housing projects
in urban belts as worker shortage reduces.

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 10. CONCLUSION

Cement Sector plays vital role in development of Indian economy as Indian Cement is 2nd largest
in the world.

Factors like Economic, Political, Social, Technology affects the growth of the Indian Cement
Industry hence it is important to have better environment for the success of the Indian Cement
company.

Shree Cement’s current ratio is in upward trend as compared to Ultra Tech and Ambuja Cement
which shows that Shree cement have more Current Asset than Current liability to meet its
obligation as compared to other two.

Ambuja Cement’s ability to meet it current obligation is better than Shree Cement and Ultra
Tech Cement.

Ambuja Cement’s financial ability to pay its interest on debt is much better than Shree cement
and Ultra Tech cement hence it can be said that Ambuja cement can get capital much easier than
other two due to its better ability to pay interest.

In Last 5 years Shree Cement had better Net profit margin which reflects that profitability of
shree cement is at good position compared to Ultra Tech and Ambuja due to better business
performance.

Ultra Tech and Shree Cement had better returns in last 5 years from capital that they have
employed. But Ambuja cement’s returns from its capital invested has decreased in last 5 years
which reflects that their business performance wasn’t good enough.

Earnings per share of three of the companies that is Ultra Tech, Shree Cement and Ambuja has
been consistently good is last 5 years which reflects that stock performance of this 3 companies
have better results.

Dividend payout ratio of Ambuja Cement showed decreasing flow which reflects that company
is using their money for the growth purpose of company rather than paying it to shareholders.

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Ambuja Cement’s market value compared to their earning per share has decreased over the last 5
years but Ultra Tech cement and Shree Cement have well enough market value which reflects
that, those companies have better market value per share.

It can be said that Shree Cement’s financial performance is better than Ultra Tech Cement and
Ambuja Cement. As well as Ambuja Cement’s business performance is well enough as
compared to other 2 companies.

If one is an aggressive investor, then one can keep JK Cements on their radar, as it is a small cap
company and the risk associated with it will be high. If one is a conservative investor, then they
can keep the large cap companies, Shree Cements & Ambuja Cement, on their radar.

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 11. LIMITATIONS
Even though all possible analysis tools and financial data are used to study Cement
Sector in India, it may possible that some portion of the industry remained unanalyzed.
As the latest data of Cement Companies of this year is still not available it was
impossible to include the data of FY2020 and analyze for the same.
As we can’t include all the parameter and tools-technique at a time, there might be other
parameters to analyze the sector or the companies which can give better or other results
from this result.
In this report we have taken financial data for 3 years only, hence considering more than
3 year might be reflect different results from this one.
As full technical analysis of companies is not done so for the analyst who prefer
technical analysis it this report can be a limitations.
Different analysts have different perception towards analysis of the company or sector.
As due to Covid-19 economy has slashed so the situation of this sector has changed and
due to non -availability of data it was not possible to analyze this year performance.

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 BIBLIOGRAPHY

 Reports:
 Annual Reports
 News websites
 Websites
 https://www.ijsr.net/archive/v4i9/SUB157950.pdf
 https://www.alphainvesco.com/blog/understanding-indian-cement-industry/
 https://www.coverfox.com/life-insurance/life-insurance-companies/birla-sun-life-
insurance/
 https://www.ibef.org/download/Cement_January_2016.pdf
 https://www.equitymaster.com/research-it/annual-results-
analysis/CEMCO/ULTRATECH-CEMENT-2017-18-Annual-Report-Analysis/48
 https://www.slideshare.net/BabasabPatil/a-project-report-on-technical-analysis-at-
cement-sector-in-share-khan
 https://simconblog.wordpress.com/2016/04/21/cement-industry-analysis/
 https://timesofindia.indiatimes.com/business/india-business/india-gained-755-
million-in-additional-exports-to-us-due-to-us-china-trade-war-
unctad/articleshow/71934393.cms

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