Gujarat Ambuja Cements Limited

Wednesday, November 1, 2006

 Contents
 Industry Highlights
 Demand Drivers
 Gujarat Ambuja Cements Limited – An Overview
 Key Financials - Quarterly Results & YTD
 Consolidated Results (YTD)
 Sales Volume
 Sales Realisation
 Direct cost of Production
 Peers Quarterly Performance
 Future Growth Plans
 Status on the merger of ACEL
Industry Highlights

1
 Cement Industry – At a Glance
YOY Growth
Cement Capacity
164.7 Mil.T. (As of Sep-06) 2.8%

Clinker Production 3.0%

118.4 Mil.T. (2006 Est.)

Cement Production 10.8%

151.4 Mil.T. (2006 Est.)

Cement Demand
(Domestic) 10.1%
144.3 Mil.T. (2006 Est.)
2
 Rising Capacity Utilisation
180 100
87.64 92.82
160 80.92 90
85.07 80.63
79.24
85.10 83.60 80
140 77.00
79.56 78.19
70
120
mn. tonnes

60
100
50
80
40
60
30
40 20
20 10
0 0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Capacity installed Cement Production Capacity utilisation (%)

3
 Industry Highlights (Jan – Sept 2006)

12% 12%
3%
2005
2006

113.55

113.24
88.79

101.39

101.20
85.44

Clinker Production Cement Production Cement Despatches

Industry Highlights (mn. Tonnes)

* Growth rate

2005 2006
Clinker Production 85.44 88.79
Cement Production 101.39 113.55
Cement Despatches 101.20 113.24

4
Demand Drivers

5
 Demand Drivers

 Development of New Urban Cities

 Hedge against Inflation - Property
 Increasing Housing Mortgage Penetration
 Retail Sector Development – Malls & Multiplexes
 Growth in IT / IT Enabled Services
 Emphasis on Infrastructure

Increased Construction will lead to

higher cement demand
6
 The way forward
 Demand expected to grow by over 10%, on a back of
strong GDP growth

 Fresh Supply is limited in the near future

 Demand to outstrip supply.

 Consolidation drive has changed the face of industry.

Result – Prices to remain Firm

7
Gujarat Ambuja Cements Limited
– An Overview

8
 Our Operations
(Post Merger with ACEL)

Substantial Presence in
Punjab HP West & North India

Cement Plant
Grinding Station
Rajasthan Terminal
Port
Gujarat
Chattisgarh WB Mn. Tonnes
Clinker Cement
Maharashtra Capacity Capacity
Western India 7.0 8.0
Northern India 4.1 6.0
Eastern India 1.4 2.0
Total Capacity 12.5 16.0

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 Gujarat Ambuja Cements Limited

 Capacity built up from 0.7 mn. Tonnes in 1986 to

16.0 mn. Tonnes today (including acquisitions).

 Sea transportation of bulk cement from Gujarat to

3 terminal ports at Surat, Mumbai & Sri Lanka.

 A captive port at Muldwarka (Gujarat) for inward /

outward movement of goods.

10
 Our Strategy

 Captive Infrastructure: Ports & Power Plants

 Presence in the growing markets of North & West

 Retail Focus – Premium pricing

 Largest Exporter of cement

 35% Cement transport by sea - Cheapest Mode

 One of the Lowest Cost Cement Producer

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 Own Infrastructure

 7 Owned Cement Ships for transporting Cement by Sea.

 Port at Muldwarka (Gujarat) to handle import/export of

material.

 3 Cement receiving terminals.

 Over 250 MW of Captive Power Plants at various cement

plants to give reliable and cheap power.

12
 Strong Brand
 India - A bagged market
 Individual home builder - key driver of demand

Our focus :
 Best quality cement
 Good packaging
 Logistic management - strong distribution network
 Customer service

Ambuja Cement - A preferred brand

- Fetching higher realisation

13
Key Financials
(Standalone)

14
Key Financials – Latest Quarter
(July – Sept 2006) Rs. Crores
GACL
2006 2005
Clinker Production (mn.t) 2.50 2.46
Cement Production (mn.t) 3.15 2.89
Sales volume (mn.t) 3.21 2.93
Sales value (Rs. Crores) 984.1 647.3
EBITDA (Rs. Crores) 381.4 171.6
PBT 323.0 101.0
PAT 244.7 75.3
EBITDA per ton (Rs.) 1188 586
EBITDA per ton (US$) 26 13
EBITDA Margin 39% 27%
15
 GACL standalone (YTD)
Rs. Crores
Mar-06 Jun-06 Sep-06 YTD
Clinker Production (mn.t) 2.76 2.73 2.50 7.99
Cement Production (mn.t) 3.65 3.85 3.15 10.65
Sales Volume (Mn. T) 3.65 3.77 3.21 10.63
Net Sales 924.3 1134.2 984.1 3042.6
EBITDA 339.3 451.9 381.4 1172.6
PBT 313.7 371.4 323.0 1008.1
PAT 298.6 303.9 244.7 847.1
EBITDA Margin 37% 40% 39% 39%
EBITDA per ton (Rs.) 930 1199 1188 1103
EBITDA per ton (US$) 20 26 26 24

16
Consolidated Results
(YTD)

17
 Consolidated Results (YTD)

Rs. Crores
Mar-06 Jun-06 Sep-06 YTD
Net Sales 945.8 1154.6 1006.2 3109.6
EBITDA 392.8 489.5 416.7 1299.0
Share of Associates 26.6 56.5 37.0 120.1
PBT 331.1 427.6 358.3 1117.0
PAT 315.8 360.1 280.0 955.9

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Sales Volume

19
 Sales Volume
(Including ACEL)
Mn. Tonnes
Plant wise Mar-06 Jun-06 Sep-06 YTD
Gujarat * 1.28 1.25 0.99 3.52
HP/Punjab 0.9 1.07 1.04 3.01
Maharashtra 0.89 0.88 0.64 2.41
Rajasthan 0.58 0.57 0.54 1.69
East 0.54 0.55 0.45 1.54
GACL + ACEL 4.19 4.32 3.66 12.17
% of Total Despatches 11 11 10 11
* Includes Exports

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Sales Realisation

21
 Sales Realisation
250
Rs. per 50 Kg Bag

200

150

100
Sep 05 Sep 06

Sep-06 Jun-06 Mar-06 Dec-05 Sep-05

Mumbai 217 214 193 172 171

Ahmedabad 193 188 167 155 152
Delhi 201 202 178 156 156
Jaipur 178 174 162 144 138
Kolkatta 194 192 178 171 172

22
Direct cost of Production

23
 Direct cost of Production

1000
848
Rs. per tonne of cement 804
800

600

400

200

0
July - Sep 2006 Apr - Jun 2006
Power 271 258
Coal 290 269
Raw Material 223 222
Consumables 64 55

24
Peers Quarterly Performance
(July - Sept 2006)

25
 Peers Quarterly Performance
(July – Sept 2006)

Particulars ACC GACL* Grasim Ultra Tech

Sales Volume (mn.T) 4.27 3.66 3.38 3.68
Sales Value (Rs. Crore) 1391.6 1131.0 1141.2 1004.5
EBITDA (Rs. Crore) 391.2 425.6 356.0 266.4
EBITDA (US$ / Tonne) 20 25 23 16
EBITDA Margin 28% 38% 31% 27%
PBT (Rs. Crore) 315.8 359.3 N/A 187.9
PAT (Rs. Crore) 225.3 278.2 N/A 127.4
Grasim has other substantial businesses hence PBT & PAT not
applicable.
* Including full results of ACEL for better comparison

26
Future Growth Plans

27
 Future Growth Plans
Projects Expected Year of
completion
60 MW Power plant at Ambujanagar
Phase I 1st Quarter 2007
Phase II 2nd Quarter 2007
 Expansion at Rabriyawas – 0.5mn. Tonnes clinker June, 2007
 Grinding station at:
Farraka - 1 mn. Tonnes January 2007
Roorkie - 1 mn. Tonnes March 2007

 2.3 mn. Tonnes clinkerisation plant at Chattisgarh December, 2008

 Power plants of 81 MW at various locations December, 2008
Total Capital Outlay of Rs. 1600 Crores

28
Status on the Merger of ACEL

29
 Status on the Merger of ACEL

 Scheme of Arrangement filed with High Courts

 Shareholder’s & Creditor’s meeting completed.

 Process expected to be completed by end of

November 2006

30
Our Shareholders ( Post Merger )
Retail Shareholding
Holcim*
16%
23%

Founder Promoters
8%
FII's
32%
Domestic Pension &
GDR's Mutual Funds
4% 17%
* Includes indirect holding of approx. 10%
through Ambuja Cement India Private Limited
31
 Synopsis

Cement…
 A Growth Story

 A Proxy on Indian Economy

 A business with least challenges

 Industry at Maturity Levels

Ambuja the Most Profitable Cement Play

With Growth and Value

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Thank You

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