Analysis Of Financial Performance Of Cement Industry 5n643w

A Research Report On

“Analysis of Financial Performance of Cement Industry” Submitted in partial fulfillment of requirement for the award of the degree of

Master of Business istration Of Bangalore University By VISHAL CHOPRA Reg. No: 05XQCM6116

Under the Guidance and Supervision Of Prof.S.SANTHANAM

M.P.BIRLA INSTITUTE OF MANAGEMENT Associate Bharathiya Vidya Bhavan #43, Race Course Road, BANGALORE-560001 M.P.BIRLA INSTITUTE OF MANAGEMENT

Declaration

I hereby declare, that this project report titled “Analysis of Financial

Performance of Cement Industry”, has been successfully completed under the guidance of Prof.S.SANTHANAM, Project Guide, M P Birla Institute of Management in partial fulfillment of Masters in Business istration degree at Bangalore University.

I further declare that this project report is the result of my own efforts and that it has not been submitted to any other university for the award of a degree or does not form the basis of any degree or diploma of other similar title of recognition in any other university.

Place: Bangalore Date:

M.P.BIRLA INSTITUTE OF MANAGEMENT

Vishal Chopra (Reg. No. 05XQCM6116)

Guide’s Certificate

This is to certify that the Project titled “Analysis of Financial

Performance of Cement Industry”, has been prepared by Mr.Vishal Chopra bearing the registration number 05XQCM6116 under my guidance. This has not formed a basis for the award of any Degree/Diploma by any other University.



Prof.S.SANTHANAM (Faculty, MPBIM)

Principal’s Certificate

This to certify that this report entitled “Analysis of Financial

Performance of Cement Industry”, has been prepared by Mr.Vishal Chopra bearing Reg. No. 05XQCM6116 of M P Birla Institute of Management in partial fulfillment of the award of the degree,

Master

University,

of

under

Business the

istration

guidance

and

at

Bangalore

supervision

of

Prof.S.Santhanam, MPBIM, Bangalore. This report or a similar report on this topic has not been submitted for any other examination and does not form a part of any other course undergone by Mr.Vinay.R



(Dr. N S Malavalli) Principal

ACKNOWLEDGMENT

I sincerely thank Dr.Nagesh.S.Malavalli (Principal), M.P.Birla Institute of Management, Bangalore for granting me the permission to do this Research Project.

I extend my gratitude to Prof. T.V.N.Rao, and also Prof S.Santhanam, professor, MPBIM who kindly spared their valuable time giving information without which this report would have been incomplete.

I extend my deep sense of gratitude to my parents who have encouraged and helped me to complete this project successfully.

I would like to extend my thanks to all my friends & the unseen hands that have made this project possible.



VISHAL CHOPRA.V. (Reg. No. 05XQCM6116)

TABLE OF CONTENTS CHAPTERS

PARTICULARS EXECUTIVE SUMMARY

1.

INTRODUCTION & THEORICAL BACKGROUND

2.

LITERATURE REVIEW

3

RESEARCH METHODOLOGY

3.1

Research problem statement

3.2

Methodology

4

DATA ANALYSIS AND INTERPRETATION

4.1 5.

Empirical Results CONCLUSION BIBLIOGRAPHY


Executive Summary:Cement is a key infrastructure industry. Indian cement industry is 84 years old. It has 120 large cement plants besides some 300 mini plants with installed capacity of about 163 million tones and a production of 131.88 million Prices moved above rs.160-180 everywhere in last year. The demand is expected to remain strong The Indian cement Industry not only ranks second in the production of cement in the world but also produces quality cement which meets global standards. , the industry faces a number of constraints in of high cost of power, high railway tariff; high incidence of state and central levies and duties; lack of private and public investment in infrastructure projects; poor quality coal and inadequate growth of related infrastructure like sea and rail transport, ports and bulk terminals. In order to utilize excess capacity available with the cement industry, the government has identified the following thrust areas for increasing demand for cement: -Housing development programmes; -Promotion of concrete highways and roads; -Use of ready-mix concrete in large infrastructure projects; -Construction of concrete roads in rural areas under Prime Ministers Gram Sadak Yojana. The financial analysis has been done on 1) India Cements Ltd. 2) Birla Corporation Ltd. 3) Madras Cements 4) K.C.P.Ltd Chettinad cements ltd.


Cement Industry


CEMENT INDUSTRY Introduction Cement is a key infrastructure industry. It has been decontrolled from price and distribution on 1st March, 1989 and delicensed on 25th July, 1991.

However, the

performance of the industry and prices of cement are monitored regularly.

The

constraints faced by the industry are reviewed in the Infrastructure Coordination Committee meetings held in the Cabinet Secretariat under the Chairmanship of Secretary (Coordination).

Its performance is also reviewed by the Cabinet Committee on

Infrastructure. The Indian cement industry is one of the pillar sectors of our economy as it s for a significant portion of total industrial output of our country. Further it plays a dominant role in satisfying basic needs (house construction) of human kind. In view of LPG, while India Cements Industry faces many challenges, it gets good opportunities to improve sales. As a result of this, Cement Industry continues to adopt a series of readjusting and restructuring measures including up gradation of technology. India is largest market with a great potential, as the country possesses more than a billion people, vast territory and abundant resources. The cement industry can enlarge global market shares so long as the industry players firmly seize the business opportunities, promptly solve outstanding problems and improve weak links in their existing production chain. The industry is expected to perform well in all the dimensions and achieve a healthy growth in its operations. In order to manage stiff competition, drastic steps are to be taken to reduce cost of production. In the changed environment, application of financial management techniques would help the cement companies in increasing their productivity and profitability. An attempt has been made in the present study to have an insight into the examination of financial health of the cement companies in India.


The Indian cement industry is on a roll. Driven by a booming housing sector, global demand and increased activity in infrastructure development such as state and national highways, the cement industry has outpaced itself, ramping up production capacity, attracting the top cement companies in the world, and sparking off a spate of mergers and acquisitions to spur growth. The recent boom in the housing and construction industry in India has worked wonders for cement manufacturing companies with capacity utilization crossing the 100 per cent mark for the first time in January 2007. Cement consumption this fiscal is all set to exceed the 150-million tonne mark for the first time. The industry is expected to end the fiscal with a dispatch of about 155 million tonne. The overall capacity utilization during the 10-month period is estimated to be in the range of 95 per cent or more. Major cement companies witnessed a 32 per cent surge in their sales volume and, across the board, companies reported higher production, higher sales and lower production costs. Cement industry at present is enjoying one of the best time in of demand and price. What more one could ask for as the most of the cement companies have seen their top line as well as bottom line surging back on the strong spending on the Infrastructure. Today, Indian cement industry comprises of more than 400 large and mini plants ranking second in the world only after China. The industry at present has an installed capacity of 165 million tones and most of the industry players are operating at the healthy capacity utilization. For the year 2005-06, capacity utilization was at 81 per cent and for the current year, we expect it to be higher. Many cement companies have undertaken expansion plans to meet the growing demand but most of the new capacity will go on stream only by 2008. Hence, we expect the prices of cement to remain firm in the months to come.


Growth and India can easily be taken for synonyms in recent times. It’s not just for the potential of IT and ITES sectors that India is considered a goldmine, but also in a lot of other sectors, the prerequisites, of course, is that investments are made in key areas which would be the drivers for future growth. The top slot for the key areas would easily be taken up by the infrastructure sector. Not only does the sector have enormous scope for growth in itself, it is an important component of the entire growth eco-system.

The cement industry would play a crucial role in building up the infrastructure required for aviation, transportation, ports, and fuel terminals (for energy requirements) amongst others.

The Cement Industry in India has made major strides ever since inception of the first cement plant in 1914 with a humble capacity of 1000 tons/annum. At 145 metric tones a year the country is the second largest producer of cement producing around 5% of the global produce.

GLOBAL SCENARIO Cement demand throughout 2006 will remain strong with growth expected in most countries. There are exceptions, notably the Philippines, Malaysia, the UK, Switzerland and . As expected, the emerging markets are on course to high annual growth rates. In the Middle East, India and Vietnam, rates of 8% are on the card, while in other countries rates of 3% to 6% have already been reported. The shift of focus In the recent Building Materials Report from Exane BNP Paribas, there was much mention of the shift in the centre of gravity of the cement industry to the East, and from the mature markets to the emerging markets. Asia represents 70% of global cement consumption, with China ing for about 45% of the world total; by 2020 the emerging markets are expected to represent 90% of world consumption. For the period 2005 – 2010 it is anticipated that there will be a net increase in capacity of 648 million


ton stream, of which 63% will be in Asia and 15% in the Middle East, two regions in which the European players have a relatively limited presence.

Middle East With regard to the Middle East countries, there are two important factors that could be influencing the decision makers: oil prices and the geopolitical situation in the Middle East. Construction output in these countries has always been correlated to oil process. If demand slows and does not match expectations of increased cement capacity there could be intense domestic price competition and surplus capacity would have to be exported, out of a region that is currently importing about 15% of global sea-borne cement.

The international cement groups as well as the domestic producers in the Middle East will be carefully watching oil prices, as a fall from the high levels and revenues that have been fuelling the construction industry in many parts of the region could severely affect cement demand.

Expansion options There is also another interesting aspect of the latest developments in the cement industry and that is an increase in vertical integration, in which companies are looking to control downstream activities. The acquisition of aggregates companies or ready mix concrete operations (such as that of Aggregate Industries by Holcim, or RMC by Cemex) can offer a deterrent to imports. An oversupply of cement in some of the rapidly expanding regions could set off a price war in the mature markets and the established players will want to protect their domestic interests, by becoming both producer and customer.

THE INDIAN SCENERIO The Indian cement industry is fragmented across the length and the breadth of the country with a few clusters. Cement being a transportation intensive industry the fragmentation provides an opportunity. Road is the preferred mode for transportation upto 250 km but the industry is highly dependent on the roads as the railway infrastructure is not adequate, there is an acute shortage of wagons. M.P.BIRLA INSTITUTE OF MANAGEMENT

Indian per capita consumption of cement is only about a third of the world average. Even though India stands fourth in the tally of cements consumers across the globe it easily has the capability of being the second largest consumer behind China, which, as per the estimates, would continue to be the largest consumer of cement. An additional 12 million tons per annum would need to be added to the current Indian capacity to keep up with the growing demand. There aren’t a lot of Greenfield projects in the pipeline to add to the capacity thus it would create a favorable demand-supply scenario. However, cement consumption per capita in our country at about 115-kg/ capita is one of the lowest amongst other countries. A simple comparison with the rest of the world would prove the point, the figure for China, for instance is 450 kg/capita. Similarly in Japan it is 631 kg/capita while in it is 447 kg/capita, while the world average is about 250 kg/capita.

Energy Efficiency As for energy and pollution norms, the best performers in the country perform almost at par with the best around the globe (thermal energy Kcal/kg of clinker – India 665 against 690 of Japan and pollution norms SPM of 40 in India against 20 of Japan) but the average performers lag far behind the global average. Looking at the background of cement industry, the prices of cement industry are market driven and are not in the control of the manufacturers. There is a mismatch between the supply and demand, with the demand side being heavier. However, an increase in the installed capacity can bridge the gap between demand and supply. In budget`07, a dual policy was announced for the cement industry, which had a positive as well as a negative impact. On the positive side, there was emphasis on infrastructure development and nation-building projects, resulting in an increase in the derived demand for cement. However, the simultaneous increase in the excise duty had wiped out the benefits. The price considered in the budget was the maximum retail price (MRP) at Rs 190 a 50kg bag. Due to additional costs like primary freight, secondary freight, handling and the


presence of intermediaries further inflated the retail price of cement, which resulted in an increase in cement prices earlier last week. However, recently cement manufacturers have agreed to hold the current prices for one year even after rise in input costs, with excise duty of Rs 600 a ton being left unchanged. Cement manufacturers also agreed that if any concession is given to them on excise duty and other statutory levies, they will on the benefit to consumers. This had a `negative` impact on the cement companies. As per a report by Networth Stock Broking, the above would mean cement companies will not have any decline in realizations from current levels but reduction in Networth price assumption by Rs 150 a ton for FY08/CY07 would lead to 14 to 20 % impact on net earnings of frontline cement companies. Gujarat Ambuja would be affected 13% and UltraTech 18%. ``Further the cap on prices would expose the cement manufacturers to negative surprises on cost front. We upgrade the sector to neutral in light of sharp correction, the decision of freezing the price for one year has washed away any kind of probability for bottom line surprise for the next one year. Cement companies have lost opportunities for further price hikes which we have factored in our earnings estimates for next year. This move will downgrade the net earnings of frontline cement companies by 10-15%, Looking at the lack of trigger in near future, inability to on the cost and overhang of supply due to commercialization of new plants by FY09, Karvy has downgraded the cement sector to `Neutral`.


Demand Supply Cement demand has posted a healthy growth rate of 11.16% in the current fiscal. This is in tandem with strong economic growth of the country. The GDP growth in the current fiscal is expected to be in excess of 8.1 per cent and during the half year Jan-June 2006, cement industry grew around 12.2 % as compared to 10.5 % for the corresponding previous year. The industry produced and supplied over 136 million tons of cement, including export of 9 million tons of cement and clinker. The industry capacity was 157 million tons. The industry achieved production of 141.81 million tons in fiscal 2005–06 compared to 127.57 million tons during corresponding previous year.

The strong growth in the cement sector has been fuelled by various sectors which are witnessing strong growth themselves. They are Growth in housing sector (over 30%)-a key demand driver; -Infrastructure projects like ports, airports, power projects, dam & irrigation projects -National Highway Development Programme -Bharat Nirman Yojana for rural infrastructure -Rise in industrial projects -Export potential is also a demand driver Capacity Utilization The capacity utilization has improved over the years, the current level of capacity utilization is pegged at 90% which in itself is a benchmark the world over. Not being able to add capacity rapidly has been a blessing in disguise for the industry as it has enabled it to attain such a high level of productivity.

THE CONSOLIDATION In the past 3 years the Indian cement industry has undergone dramatic changes, the takeover of L&T cement division (UltraTech) by Grasim (Aditya Birla Group) was only the beginning of the consolidation that was to follow. The top five players control almost 50% of the capacity; the remaining 50% of the capacity remains pretty fragmented.


Global participation The consolidation so far has not been limited to the home grown players; a lot of foreign players are keen to get into the Indian market. The newfound interest of the global bigwigs in the Indian cement arena has a pretty simple reasoning behind it; huge potential for growth in the medium and the long run, and a strategic base for a possible injection of cement at competitive prices to China and other Asian Countries.

It would only be unfair to expect that the global bigwigs would sit back and watch without being part of the action. Its no wonder that the top ones (Lafarge, Holcim and Heidelberg) have increased their investments in India. The government initiatives to extend a variety of incentives to the industry to spur growth in the housing and other infrastructure sectors is only going to increase cement demand in the medium term. Having mentioned earlier that the per capita cement consumption in India is very low, the multinational majors see a huge potential for this pie to grow and thus are eager to have a slice through acquisitions. The acquirer and the acquired. The following acquisitions have happened in the recent past Grasim: UltraTech (L&T) ACC: IDCOL Lafarage : Tisco, Raymonds Gujarat Ambuja :DLF, ACC Cement FranCais : Zuari Heidelberg : Mysore Cement Holcim: Gujarat Ambuja

It’s interesting to note that ACC took over state-owned Industrial Development Corporation of Orissa Ltd (IDCOL) in Dec 2003, only to be merged with by Gujarat Ambuja which in turn has been taken over by Holcim recently. ACC and Gujarat Ambuja are now the two arms of Swiss cement giant Holcim with a 24 per cent share of the Indian market and nearly 35 million tons capacity. The Indian Cement Industry is evolving and evolving for the good. The action that we have seen is not the end, it is would continue for some time. Though the bigger players have created bigger entities there have isolated smaller entities who would eventually


have to come together either to grow or be part of some bigger entity. The cement market is on a growth path(refer other article in this issue on Realty Boom) and as they say “make hay while the sun shines” we expect more global players to enter this growing market.

As global majors strengthen presence — Indian cement industry logs highest growth in output The industry has witnessed strong consolidations as several global majors like Lafarge, Holcim and Heidelberg have strengthened their foothold here through M&A route. As a result these foreign companies are controlling more than 25 per cent of the market. One of the reasons for strong interest shown by the foreign players is due to lower per capita consumption of cement in India Vis a Vis other Asian countries. For example, India has per capita consumption of mere 125 kg as against China of 800 kg, 960 kg of South Korea and 450 kg of Thailand. In other words, there is good scope for cement consumption to increase over the years. Cement production slowed in 2006-07, with a sharp decline recorded in March, data from the index of six infrastructure industries showed today. The overall six core sector index, which has a combined weight of 26.7 per cent in the index of industrial production, grew by 10 per cent in the month, as against 7.1 per cent in March 2006. Cement production growth, which has a weight of 1.99 per cent in the IIP, fell this March to 5.5 per cent, as against 17 per cent in the same month last year. For the 12-month period (April-March 2006-07), production growth slowed to 9.1 per cent, as against 12.4 per cent in 2005-06. Cement industry executives expect the slowdown to continue in the coming months.


Cement majors cash in on West Asian construction boom THE surge in oil prices has brought cheer to at least one section of the Indian industry. Cement majors including Gujarat Ambuja, UltraTech Cement and Saurashtra Cement are among those cashing in on the huge export potential in West Asia, which is witnessing an oil price-led construction boom. During February, for instance, cement exports showed a healthy growth of 6.67 per cent to 0.32 million tonnes from 0.3 million tonnes, according to data generated by the Cement Manufacturers' Association. Much of the increase in cement exports has been on of exports to the United Arab Emirates and other West Asian nations, industry players said. According to them, the prices for both cement and clinker have shot up by 40-50 per cent in the global market, even as domestic prices remain comparatively subdued. This has opened up huge opportunities for cement majors, especially those on the west coast of the country, to cater to the booming demand in the countries of the West Asian region, they said. "The export prices of cement have increased to nearly $40 (free-on-board) against $25 six months ago, while clinker prices have risen to close to $30, as against $20 earlier. "The spurt in export prices is largely on of the West Asian construction boom and provides tremendous export potential for Indian west coast-based manufacturers since the average realization in the international markets is higher now," an industry player said. West Asia has traditionally been a high priced market for cement. In the mid-1990s, cement prices in the West Asian countries were ruling close to the $47-mark and it is only after 1998-99 that cement prices crashed to settle around the $20-mark.


Players such as Gujarat Ambuja, which are based in Gujarat, have a big logistical advantage in shipping products to West Asia, according to industry sources. Also, the company has its own captive port, giving it a tremendous cost advantage. Gujarat Ambuja Cements, with manufacturing facilities in Gujarat, is among the largest exporter of cement and the company sells about 15 per cent of its production to the export market. UltraTech Cement, the erstwhile cement division of Larsen & Toubro that is now part of the AV Birla group, is the other big exporter of clinker and cement to West Asia. Saurashtra Cement is also among those planning to export to West Asian nations in a big way.

Capacity and Production The cement industry comprises of 125 large cement plants with an installed capacity of 163 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum. The Cement Corporation of India, which is a Central Public Sector Undertaking, has 10 units. There are 10 large cement plants owned by various State Governments.

The total installed capacity in the country as a

whole is 159.38 million tonnes. GLOBAL cement majors such as Holcim forking out huge s to strengthen their presence in the Indian market should come as no surprise with the domestic cement industry ing the fastest growth in production globally over the last 10 years, beating China to second place. Cement production in the country recorded a compounded annual growth rate (CAGR) of 8.2 per cent between 1994-2003, as compared with a 7.2 per cent growth clocked by the Chinese cement industry and the world average of 3.5 per cent growth, according to data sourced from the US Geological Survey. The increase in cement production is only expected to pick up as the country continues growing at over 6-7 per cent annually.


Swiss-cement major Holcim paid the equivalent of more than $200 a tonne for picking up a 14.8 per cent stake in Gujarat Ambuja on January 30, which is among the highest valuations in cement industry deals during the last five years or so. Besides India and China, the other countries that have seen significant growth in production include Brazil, Spain and the US. On the other hand, and Japan are among countries that have shown a downturn in production during the 10-year period, as per the data. According to analysts, the predominant reason for the fast growth in the Indian cement industry is on of a combination of the rapid economic growth and the fact that the Government shackles on the sector was removed early. The sector was decontrolled from price and distribution restrictions in 1989 and delicensed in July 1991. , the Indian cement industry is projected to grow at a CAGR of around 7 per cent over the next five years. For the development of the cement industry, the Government had constituted a `Working Group' in the Planning Commission during the formulation of Tenth Five Year Plan, which forecast a growth rate of 10 per cent for the industry during the plan period and has projected creation of additional capacity of 40-62 million tonnes mainly through expansion of existing plants. The thrust areas for improving demand for cement include the Government's efforts to further push to housing development programmes, promotion of concrete highways and roads and the use of ready-mix concrete in large infrastructure projects.

Recommendations on Cement Industry For the development of the cement industry ‘Working Group on Cement Industry’ was constituted by the Planning Commission for the formulation of X Five Year Plan. The Working Group has projected a growth rate of 10% for the cement industry during the plan period and has projected creation of additional capacity of 40-62 million tonnes


mainly through expansion of existing plants.

The Working Group has identified

following thrust areas for improving demand for cement; (i)

Further push to housing development programmes;

(ii)

Promotion of concrete Highways and roads; and

(iii)

Use of ready-mix concrete in large infrastructure projects.

Further, in order to improve global competitiveness of the Indian Cement Industry, the Department of Industrial Policy & Promotion commissioned a study on the global competitiveness of the Indian Industry through an organization of international repute, viz. KPMG Consultancy Pvt. Ltd. The report submitted by the organization has made several recommendations for making the Indian Cement Industry more competitive in the international market. The recommendations are under consideration.

Technological change Cement industry has made tremendous strides in technological up gradation and assimilation of latest technology. At present ninety three per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology and only seven per cent of the capacity is based on old wet and semi-dry process technology. There is tremendous scope for waste heat recovery in cement plants and thereby reduction in emission level. One project for co-generation of power utilizing waste heat in an Indian cement plant is being implemented with Japanese assistance under Green Aid Plan. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save materials substantially.

India is also producing

different varieties of cement like Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement etc. Production of these varieties of cement conform to the BIS Specifications. It is worth mentioning that some cement plants have set up dedicated jetties for promoting bulk transportation and export.


Capacity, Production and Exports The cement industry comprises 128 large cement plants with an installed capacity of 151.69 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum resulting in total installed capacity of 163 million tonnes. Actual cement production in 2003-04 was 123.50 million tonnes as against a production of 116.35 million tonnes in 2002-03, which is an increase of 6.15% over 2002-03. Cement production during the year 2004-05 (April-January, 2004-05) was 108.06 million tonnes (provisional), ing a growth of 7.10%. The Cement Corporation of India, which is a central public sector undertaking, has 10 units. Besides, there are 10 large cement plants owned by various state governments. Keeping in view the past trends, a production target of 133 million tonnes has been set for the year 2004-05. During the Tenth Plan, the industry is expected to grow at the rate of 10% per annum and is expected to add capacity of 40-52 million tonnes, mainly through expansion of existing plants and use of more fly ash in the production of cement. Apart from meeting the domestic demand, the cement industry also contributes towards exports.

Overview of the performance of the Cement Sector The Indian cement Industry not only ranks second in the production of cement in the world but also produces quality cement, which meets global standards. However, the industry faces a number of constraints in of high cost of power, high railway tariff; high incidence of state and central levies and duties; lack of private and public investment in infrastructure projects; poor quality coal and inadequate growth of related infrastructure like sea and rail transport, ports and bulk terminals. In order to utilize excess capacity available with the cement industry, the government has identified the following thrust areas for increasing demand for cement: (I) Housing development programmes; (ii) Promotion of concrete highways and roads; (iii) Use of ready-mix concrete in large infrastructure projects; and (iv) Construction of concrete roads in rural areas under Prime Ministers Gram Sadak Yojana.


The differential excise duty on price was a major announcement for the cement sector in the Union Budget 2006-07. However, government's initiatives on the infrastructure and housing sector fronts would continue to remain the key demand drivers. We believe that the current good times will continue in the medium term. The demand for cement has increased at the rate of 10% annually on of buoyancy in the end industries. With capacity additions taking place at a slower pace, the demand supply equation is expected to continue to remain favorable and this will lend to current high prices. Once new planned capacities become operational, the industry may face excess supply situation, which in turn might impact margins. A dual policy was announced for the cement industry, which has a positive as well as negative impact. On the positive side, with so much emphasis on infrastructure development and nation-building projects, there is bound to be an increase in the derived demand for cement. However, the simultaneous increase in the excise duty wipes out the benefits. Looking at the background of cement industry, the prices of cement industry are market driven and are not in the control of the manufacturers. There is a miss-match between the supply and demand, with the demand side being heavier. Since the suppliers are not able to cope up with the increasing demand, the gap is increasing which again implies a price rise, resulting in further deviation of demand and supply. Presently, cement is sold at around Rs. 200 per 50 kg/ bag and the returns generated are fair enough for undertaking expansion activities. The increase in the installed capacity can bridge the gap between demand and supply. The price considered in the budget is the maximum retail price (MRP) at Rs.190 per 50 kg bag. Due to additional costs like primary freight, secondary freight, handling etc, the MRP tends to be higher than Rs.190 and the presence of intermediaries further inflates the retail price of cement, as the intermediaries include their margins. If the manufacturers are forced to sell at lower price, then there won’t be any surplus left for further expansionary


measures. This will affect the supply of cement. As a result, the gap between demand and supply of cement would be further widened. Again, the increase in the cost (excise duty) will leave the manufacturers with no choice but to on the burden to the consumers, which will hamper the demand side.

Even for the government, the dual policy doesn’t seem to be effective. On one hand, it will earn huge revenues by means of additional excise duty; while on the other hand, it will have to pay inflated bills for the infrastructure projects undertaken. This would nearly nullify the effect of increase in excise duty. Presently, the Government has a sizeable share in the demand for cement

Overview 1. Indian cement industry dates back to 1914 - first unit was set-up at Porbandar with a capacity of 1000 tonnes 2. Currently India is ranked second in the world with an installed capacity of 114.2 million tonnes. Industry estimated at around Rs. 18,000 crores (US $ 4185 mn) 3. Current per capita consumption - 85 kgs. As against world standard of 256 kgs 4. Cement grade limestone in the country reported to be 89 billion tonne. A large proportion however is unexploitable. 5. 55 - 60% of the cost of production are government controlled 6. Cement sales primarily through a distribution channel. Bulk sales for < 1% of the total cement produced. 7. Ready mix concrete a relatively nascent market in India

Cement industry: Structure Installed capacity 114.2 mn tonnes per annum (mntpa) Production around 87.8 mn tonnes


Major cement plants •

Companies : 59

•

Plants : 120

•

Typical installed capacity

•

per plant : Above 1.5 mntpa

•

Production 05-06 :160mn ten

•

All India reach through multiple plants

•

Export to Bangladesh, Nepal, Sri Lanka, UAE and Mauritius

•

Strong marketing network, tie-ups with customers, contractors.

•

Wide spread distribution network.

Sales primarily through the dealer channel

Mini cement plants •

Nearly 300 plants

•

Located in Gujarat, Rajasthan, MP

•

Typical capacity < 200 tad

•

Installed capacity around 9 mn. Tonnes

•

Production around : 6.2 mn tonnes

•

Excise : Rs. 200/ tonne

•

Production cost / tonne - Rs. 1,000 to 1,400

•

Presence of these plants limited to the state

•

Infrastructural facilities not the best


Transportation •

Transportation costs high - freight s for 17% of the production cost

•

Road preferred mode for transportation for distances less than 250kms. However, industry is heavily dependant on roads as the railway infrastructure is not adequate - shortage of wagons.

Capacity additions •

Acquisitions have been the mainstay of the business

•

Regional imbalance resulting in cross regional movement limestone availability in pockets has led to uneven capacity additions

•

Capacity additions have slowed down

Industry inputs •

Highly capital intensive industry

•

Nearly 55-60% of the inputs controlled by the government

•

Facing problems due to power shortage

•

Coal availability and quality affecting production

•

Mini plants realization of revenue lower than large plants, survival difficult

Demand drivers •

Infrastructure & construction sector the major demand drivers. Some demand determinants ƒ

Economic growth

ƒ

Industrial activity

ƒ

Real estate business

ƒ

Construction activity

ƒ

Investments in the core sector


Future •

Signs of a revival ƒ

growth in the housing sector

ƒ

central road fund established for national highways and railway over bridges to provide the necessary impetus

ƒ

expansion plans, Greenfield projects on the anvil

•

Demand - supply balance expected in the next 12 - 15 months

•

Higher capacity utilization likely in the future

•

Encouraging trend in demand due to pick-up in rural housing demand and industrial revival

•

Industry likely to grow at 8-10% in the next few years

Expectations Government in order to curb the inflation very recently reduced the import duty on cement from 12.5 per cent to Zero. But we feel this will not have any impact. There are two reasons for the same. First, cement being bulky in nature will not be an easy to import and at the same time our Indian ports are not good enough to manage large quantity of cement being imported. Second, prices of cement in the international market are quite high as compared to domestic market. Hence, we don’t expect any threat from exports numbers going forward. The industry has been demanding the reduction on the excise front. In fact, last time excise duty on cement increased was in 2003-04 when increased from Rs 350 per tonne to Rs 400 per tonne. Now industry wants the same to rolled back to Rs 350 per tonne. Besides, this it wants government to continue to have specific rate of excise duty as against ad valorem (white cement has Ad valorem duty of 16 per cent). Our talk to industry players suggest that instead of giving any direct benefits the government should further increase the thrust on the infrastructure and that should help the cement industry to report better growth. “To keep maintain high economic rate of return the national M.P.BIRLA INSTITUTE OF MANAGEMENT

policy makers should continue with their emphasis on construction and infrastructure development.” The present scenario of cement industry is very good in of demand and with the prices going above Rs 160 to Rs 180 everywhere. Most importantly, the gap between the demand and supply does not exist any longer in any part of the country. Domestic consumption with 11 per cent increase and exports keeping up with the last year levels, the Indian cement industry is expected to cross 150 million tonnes in dispatches, including domestic consumption, and exports during 2005-06 from all plants put together, including mini cement plants. Mini cement plants everywhere are operating at 100 per cent capacity utilization. The margins are improving in line with others.

Cement consumptions are as follows: ¾ South 30 per cent (26 per cent), ¾ East 17 per cent (17 per cent), ¾ North 20 per cent (21 per cent), ¾ Central 16 per cent (17 per cent), and ¾ West 18 per cent (20 per cent). The figures for the current year are for April-November period while the figures in brackets represent full year for the year 2004-05. Also, there is an increase in the consumption of PPC cement from 48 per cent to 50 per cent. Today, cement from Andhra is going all over India, including Assam, Meghalaya, Jharkhand, Orissa, West Bengal, Chattisgarh, Gujarat and Maharastra. More cement is likely to flow into Tamil Nadu from the state in view of cut in sales tax. Any further increase in demand in the South India will benefit the cement industry here. Cement movement from Gujarat to Mumbai is also coming down due to exports while cement movement from Orissa into Andhra has stopped and, in fact, cement is flowing into Orissa as well.


Cement consumption to cross 150 mt this fiscal With the capacity utilization crossing the 100% mark for the first time in January 2007 and two more peak months of February and March left in the current fiscal, cement consumption this fiscal is all set to exceed the 150-million tonne mark for the first time. The industry is expected to end the fiscal with a dispatch of about 155 million tonne.This has been possible thanks to the overall economic growth in general and more particularly, impressive growth of the realty sector. Cement industry has already dispatched 130 million tonne in the first 10 months, thus ing a growth of 10%. In the next two months additional 25-30 million tonne is likely to be consumed. The overall capacity utilization during the 10 month period is estimated to be in the range of 95% or more, industry sources said. Southern region, which witnessed a slowdown in dispatches in the last few months due to monsoon, has regained the lost momentum with increased off take from Tamil Nadu and Karnataka. Andhra Pradesh, which posted a negative growth in consumption in the beginning of this fiscal, has seen dispatches picking up sharply. Among the regions, south is expected to end the fiscal with 12% growth in consumption, followed by north (11%) and west (10%), the industry sources added. Karnataka has shown a remarkable growth in consumption with 20% growth over the same period last year. For the first time in the last few years, the capacity utilization has gone up over 100% to touch 102% in January 2007 with dispatches touching 14.10 million tonne as against the production of 14 million tonne, reflecting the demand for the commodity. The total installed capacity of the industry has gone up to touch 165 million tonne in the current fiscal as against 160 million tonne during the last fiscal.


5-year tax holiday to new cement units Unable to put pressure on cement manufacturers to slash prices, the government is planning to offer them a five-year tax holiday to set up more capacity to end the current demand-supply mismatch and consequently soften prices. According to a source in the Department of Industrial Policy and Promotion, the government may give a five-year tax holiday to cement units announced on or after April 1 with a caveat that they have to commence production within three years. Cement makers and the government have been at loggerheads over prices, which have risen over 40% to a peak of Rs 255 per 50 kg bag in the last 12 months. Manufacturers have so far not paid heed to the Center’s call to roll back prices, but have promised not to raise them further for a year. Official sources believe that cement manufacturers are currently in a commanding position as far as prices are concerned, due to a major demand-supply gap. Various infrastructure and real estate projects have seen construction activity growing at an unprecedented pace, and this has led to growing demand for cement. It is understood that the proposed policy move is also aimed at incentivising participation of new companies. The cement industry’s current capacity is 165 mntpa and capacity utilization has been 92% so far this year. Cement production—127 mt during April-January (‘06-07)—has seen a growth of almost 10%. Industry players welcome the proposed move, but also point out loopholes in it. “Such short-term incentives may leave a trail of winners and losers, It would lead to bunching of capacity and the plants that commence production after these three years would lose out,”. It, however, may not be easy for manufacturers to take advantage of the proposed incentives. “Equipment supply is a major constraint and cement makers will have to work very hard to finish projects in time,” Equipment suppliers’ order books are already full


and with increasing demand from India and the Middle East, equipment delivery time has almost doubled from the usual six months. The industry has announced the addition of 42 million tonnes in the next two years. Given the past trend, not all of them are expected to materialize. In 2006-07, manufacturers had announced the addition of 13 million tonnes, but only 5 million tonnes came up. The fact that cement makers enjoy high margins due to supply-demand mismatch is one reason cited by analysts for slow addition of new capacities.

Cement worries The Government should intervene to correct prices when the rise is due to a demandsupply mismatch in construction boom.Worried by the "abnormal" increase in cement prices — not commensurate with the rise in input costs — the Centre has asked manufacturers to rein in prices within a week. The Centre is obviously under pressure from a section of consumers, especially the powerful builders' lobby, to step in. In a cyclical industry where price and distribution controls were removed in 1989 and the industry de-licensed in 1991, it is a moot point whether the Government should persuade itself to intervene only when prices are going up. There was no such stirring within the Government when the cement industry was struggling for more than two years with low prices. Some of the large regional players even had to get their debt restructured. The industry can very well turn around and ask the Government why it did not intervene then. An intervention will be justified only when the Government has evidence of cartelisation or of a monopoly situation emerging. The Indian cement industry is fragmented, with the top five players ing for nearly 50 per cent of the installed capacity of about 160 million tonnes and with small, regional players holding the balance. By all s, the current price increase is a result of the demand-supply mismatch, a consequence of the construction boom in the major cities, which has also caused runaway increases in the price of land, steel and other materials. The industry may argue that cement s for hardly 5 per cent of the construction cost in building projects, if the land price is also included. It is not that the Centre should sit back and watch. Creating an enlargement in supplies is an obvious answer. The 2006M.P.BIRLA INSTITUTE OF MANAGEMENT

07 Budget reduced the Customs duty on cement to 12.5 per cent, but this is not likely to be good enough to cause a surge in imports, as the infrastructure at the ports is inadequate to handle large arrivals. The Centre would do well first to ensure that various bottlenecks such as inefficient transportation infrastructure are looked into. The industry has evolved in recent years to match global standards with some of the top international majors coming into the country. Prices too match global trends. The industry is in the throes of consolidation, and the existing players are looking to expand capacities. There has also been a demand to curb exports of cement. At 6 million tonnes, these are just about 4 per cent of the total production of 141 million tonnes in 2005-06. Curbing that may have but a marginal impact on prices, but leave a deep scar on an industry that has just begun to adjust to market forces. Would it not make better sense for the Government to go lighter on the tax burden — excise and sales tax add up to almost Rs 50 a bag? Concerned over the steep increase in cement prices, the Government on Tuesday came down heavily on the manufacturing companies and asked them to work out ways within a week's time to cut prices. Cement prices have gone up from an average level of Rs 135-140 per bag of 50 kg to around Rs 205-210 per bag during the past six months. At a meeting called by the Department of Industrial Policy and Promotion (DIPP), the Cement Manufacturers Association has been asked to call a meeting of its urgently and decide on steps for lowering of prices, instead of waiting for the rainy season, when cement prices tend to fall. The meeting was convened following complaints from builders against the sharp increase in prices of cement. `We think that the nearly 50 per cent increase in cement prices since November 2005 is abnormal. The prices have increased more than the increase in the input cost,’ The cost has roughly increased by around 15 per cent, but increase in prices in certain cases has been as high as 40-50 per cent; on an average it was about 30 per cent. Therefore, there is a need to take corrective measures by the manufacturers to bring down the prices.


The cement industry has been witnessing a boom period following increased spending in construction and infrastructure sectors. Cement output increased by 11 per cent from 127.57 million tonnes (mt) in 2004-05 to 141.81 mt in 2005-06. Exports during 2005-06 went up by more than 47 per cent from 4.07 mt in 2004-05 to 6.01 mt during 2005-06. This surge in exports had led to builders' associations demanding ban on cement exports in the face of high domestic prices. With a booming market the cement industry has also increased its capacity from 153.85 mt in March 2005 to 159.80 mt in March 2006.

Out of control Abnormal rise from Rs 135-140 per bag of 50 kg to Rs 205-210 per bag during the past six months. Prices have increased more than the increase in the input cost. Industry undergoing a boon period due to increased spending in infrastructure building.

Cement majors post increase in sales Cement majors have reported a substantial year-on-year increase in volume sales for the month of February. The Associated Cement Companies reported a 11.8 per cent increase in sales at 15.34 lakh tonnes in February this year as against 13.72 lakh tonnes in February last year. Gujarat Ambuja Cements Ltd reported a 16 per cent increase in dispatches, which figured at 10.72 lakh tonnes (9.27 lakh tonnes). The Aditya Birla group's (largely Grasim and UltraTech) cement dispatches for the month grew by 16.06 per cent, to 25.35 lakh tonnes. Production increased as well. ACC reported a 12.2 per cent increase in production for the month, which stood at 15.43 lakh tonnes. At GACL, production grew by 12 per cent to 10.51 lakh tonnes. The Aditya Birla group reported a 13.34 per cent increase in production, which stood at 25.24 lakh tonnes.


Outlook - Cement industry ¾ Rise in prices of cement by Rs 5 per bag is due to rise in price of Coal. ¾ Interest rate on housing loan reduced by 25 basis points which might fuel the growth of construction. ¾ Better realization have led rise in profits of cement companies. ¾ Cement manufactures tops in of capacity utilization in cement industry – 100%.ss ¾ Demand from gulf also fuels the prices. ¾ Retailing and BPO infrastructure to push up cement demand. ¾ Consumption of cement in southern region has been declining in the recent months due to rainy season. ¾ The high price of cement in the north is due to the high prices of power and fuel. ¾ International prices of non-coking coal have nearly doubled in the last 12 to18 months. The cement cartel, which took the price in the country to a five-year high


LITERATURE REVIEW


Fundamental analysis Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. The analysis is performed on historical and present data, but with the goal to make financial projections. There are several possible objectives: •

to calculate a company's credit risk,

•

to make projection on its business performance,

•

to evaluate its management and make internal business decisions,

•

to make the company's stock valuation and predict its probable price evolution.

Fundamental analysis. It's geared primarily at new investors who don't know a balance

sheet from an

statement. While you may not be a "stock-picker extraordinaire" The biggest part of fundamental analysis involves delving into the financial statements. Also known as quantitative analysis, this involves looking at revenue, expenses, assets, liabilities and all the other financial aspects of a company. Fundamental analysts look at this information to gain insight on a company's future performance. A good part of this tutorial will be spent learning about the balance sheet, income statement, cash

flow statement and how they all fit together.

But there is more than just number crunching when it comes to analyzing a company. This is where qualitative analysis comes in - the breakdown of all the intangible, difficult-to-measure aspects of a company.

The Concept of Intrinsic Value Before we get any further, we have to address the subject of intrinsic value. One of the primary assumptions of fundamental analysis is that the price on the stock market does not fully reflect a stock’s “real” value. After all, why would you be doing price analysis if the stock market were always correct? In financial jargon, this true value is known as the intrinsic value.

For example, let’s say that a company’s stock was trading at $20. After doing extensive homework on the company, you determine that it really is worth $25. In other words, you determine the intrinsic value of the


firm to be $25. This is clearly relevant because an investor wants to buy stocks that are trading at prices significantly below their estimated intrinsic value.

This leads us to one of the second major assumptions of fundamental analysis: in the long run, the stock market will reflect the fundamentals. There is no point in buying a stock based on intrinsic value if the price never reflected that value. Nobody knows how long “the long run” really is. It could be days or years.

This is what fundamental analysis is all about. By focusing on a particular business, an investor can estimate the intrinsic value of a firm and thus find opportunities where he or she can buy at a discount. If all goes well, the investment will pay off over time as the market catches up to the fundamentals.

The big unknowns are:

1) You don’t know if your estimate of intrinsic value is correct; and 2) You don’t know how long it will take for the intrinsic value to be reflected in the marketplace.

Criticisms of Fundamental Analysis The biggest criticisms of fundamental analysis come primarily from two groups: proponents of technical

analysis and believers of the “efficient market hypothesis”.

Fundamental Analysis: Introduction to Financial Statements The massive amount of numbers in a company's financial statements can be bewildering and intimidating to many investors. On the other hand, if you know how to analyze them, the financial statements are a gold mine of information.

Financial statements are the medium by which a company discloses information concerning its financial performance. Followers of fundamental

analysis use the quantitative information gleaned from

financial statements to make investment decisions. Before we jump into the specifics of the three most important financial statements - income

statements, balance sheets and cash flow statements - we

will briefly introduce each financial statement's specific function, along with where they can be found.

The Major Statements The Balance Sheet The balance sheet represents a record of a company's assets, liabilities and equity at a particular point in


time. The balance sheet is named by the fact that a business's financial structure balances in the following manner:

Assets = Liabilities + Shareholders' Equity

Assets represent the resources that the business owns or controls at a given point in time. This includes items such as cash, inventory, machinery and buildings. The other side of the equation represents the total value of the financing the company has used to acquire those assets. Financing comes as a result of

liabilities or equity. Liabilities represent debt (which of course must be paid back), while equity represents the total value of money that the owners have contributed to the business - including retained earnings, which is the profit made in previous years.

The Income Statement While the balance sheet takes a snapshot approach in examining a business, the income statement measures a company's performance over a specific time frame. Technically, you could have a balance sheet for a month or even a day, but you'll only see public companies report quarterly and annually.

The income statement presents information about revenues, expenses and profit that was generated as a result of the business' operations for that period.

Statement of Cash Flows The statement of cash flows represents a record of a business' cash inflows and outflows over a period of time. Typically, a statement of cash flows focuses on the following cash-related activities:

•

Operating Cash Flow (OCF): Cash generated from day-to-day business operations

•

Cash from investing (CFI): Cash used for investing in assets, as well as the proceeds from the sale of other businesses, equipment or long-term assets

•

Cash from financing (CFF): Cash paid or received from the issuing and borrowing of funds

The cash flow statement is important because it's very difficult for a business to manipulate its cash situation. There is plenty that aggressive ants can do to manipulate earnings, but it's tough to fake


cash in the bank. For this reason some investors use the cash flow statement as a more conservative measure of a company's performance

Fundamental analysis: The Income Statement The income statement is basically the first financial statement you will come across in an annual report or quarterly Securities And Exchange Commission (SEC) filing.

It also contains the numbers most often discussed when a company announces its results numbers such as revenue, earnings and earnings per share. Basically, the income statement shows how much money the company generated (revenue), how much it spent (expenses) and the difference between the two (profit) over a certain time period.

When it comes to analyzing fundamentals, the income statement lets investors know how well the company’s business is performing - or, basically, whether or not the company is making money. Generally speaking, companies ought to be able to bring in more money than they spend or they don’t stay in business for long. Those companies with low expenses relative to revenue - or high profits relative to revenue - signal strong fundamentals to investors.

Revenue as a investor signal Revenue, also commonly known as sales, is generally the most straightforward part of the income statement. Often, there is just a single number that represents all the money a company brought in during a specific time period, although big companies sometimes break down revenue by business segment or geography.

The best way for a company to improve profitability is by increasing sales revenue. For instance, Starbucks Coffee has aggressive long-term sales growth goals that include a distribution system of 20,000 stores worldwide. Consistent sales growth has been a strong


driver of Starbucks’ profitability.

The best revenue are those that continue year in and year out. Temporary increases, such as those that might result from a short-term promotion, are less valuable and should garner a lower price-to-earnings multiple for a company.

What are the Expenses? There are many kinds of expenses, but the two most common are the cost of goods sold (COGS) and selling, general and istrative expenses (SG&A). Cost of goods sold is the expense most directly involved in creating revenue. It represents the costs of producing or purchasing the goods or services sold by the company. For example, if WalMart pays a supplier $4 for a box of soap, which it sells to customers for $5. When it is sold, Wal-Mart’s cost of good sold for the box of soap would be $4.

Next, costs involved in operating the business are SG&A. This category includes marketing, salaries, utility bills, technology expenses and other general costs associated with running a business. SG&A also includes depreciation and amortization. Companies must include the cost of replacing worn out assets. , some corporate expenses, such as research and development (R&D) at technology companies, are crucial to future growth and should not be cut, even though doing so may make for a better-looking earnings report. Finally, there are financial costs, notably taxes and interest payments, which need to be considered.

Profits = Revenue - Expenses Profit, most simply put, is equal to total revenue minus total expenses. However, there are several commonly used profit subcategories that tell investors how the company is performing. Gross profit is calculated as revenue minus cost of sales. Returning to WalMart again, the gross profit from the sale of the soap would have been $1 ($5 sales price less $4 cost of goods sold = $1 gross profit).

Companies with high gross margins will have a lot of money left over to spend on other


business operations, such as R&D or marketing. So be on the lookout for downward trends in the gross margin rate over time. This is a telltale sign of future problems facing the bottom line. When cost of goods sold rises rapidly, they are likely to lower gross profit margins - unless, of course, the company can these costs onto customers in the form of higher prices.

Operating profit is equal to revenues minus the cost of sales and SG&A. This number represents the profit a company made from its actual operations, and excludes certain expenses and revenues that may not be related to its central operations. High operating margins can mean the company has effective control of costs, or that sales are increasing faster than operating costs. Operating profit also gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate disclosure of their cost of goods sold figures (which are needed to do gross margin analysis). Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with ing tricks than net earnings.

Net income generally represents the company's profit after all expenses, including financial expenses, have been paid. This number is often called the "bottom line" and is generally the figure people refer to when they use the word "profit" or "earnings".

When a company has a high profit margin, it usually means that it also has one or more advantages over its competition. Companies with high net profit margins have a bigger cushion to protect themselves during the hard times. Companies with low profit margins can get wiped out in a downturn. And companies with profit margins reflecting a competitive advantage are able to improve their market share during the hard times leaving them even better positioned when things improve again.


Conclusion You can gain valuable insights about a company by examining its income statement. Increasing sales offers the first sign of strong fundamentals. Rising margins indicate increasing efficiency and profitability. It’s also a good idea to determine whether the company is performing in line with industry peers and competitors. Look for significant changes in revenues, costs of goods sold and SG&A to get a sense of the company’s profit fundamentals

Fundamental Analysis: The Balance Sheet Investors often overlook the balance

sheet. Assets and liabilities aren't nearly as sexy as revenue and

earnings. While earnings are important, they don't tell the whole story.

The balance sheet highlights the financial condition of a company and is an integral part of the financial statements. (To read more on financial statement basics The Snapshot of Health The balance sheet, also known as the statement of financial condition, offers a snapshot of a company's health. It tells you how much a company owns (its assets), and how much it owes (its liabilities). The difference between what it owns and what it owes is its equity, also commonly called "net assets" or "shareholders equity".

The balance sheet tells investors a lot about a company's fundamentals: how much debt the company has, how much it needs to collect from customers (and how fast it does so), how much cash and equivalents it possesses and what kinds of funds the company has generated over time.

The Balance Sheet's Main Three Assets, liability and equity are the three main components of the balance sheet. Carefully analyzed, they can tell investors a lot about a company's fundamentals.

Assets There are two main types of assets: current

assets and non-current assets. Current assets are likely to be

used up or converted into cash within one business cycle - usually treated as twelve months. Three very important current asset items found on the balance sheet are: cash, inventories and s

receivables. M.P.BIRLA INSTITUTE OF MANAGEMENT

Investors normally are attracted to companies with plenty of cash on their balance sheets. After all, cash offers protection against tough times, and it also gives companies more options for future growth. Growing cash reserves often signal strong company performance. Indeed, it shows that cash is accumulating so quickly that management doesn't have time to figure out how to make use of it. A dwindling cash pile could be a sign of trouble. That said, if loads of cash are more or less a permanent feature of the company's balance sheet, investors need to ask why the money is not being put to use. Cash could be there because management has run out of investment opportunities or is too short-sighted to know what to do with the money.

Inventories are finished products that haven't yet sold. As an investor, you want to know if a company has too much money tied up in its inventory. Companies have limited funds available to invest in inventory. To generate the cash to pay bills and return a profit, they must sell the merchandise they have purchased from suppliers. Inventory

turnover (cost of goods sold divided by average inventory) measures how

quickly the company is moving merchandise through the warehouse to customers. If inventory grows faster than sales, it is almost always a sign of deteriorating fundamentals.

Receivables are outstanding (uncollected bills). Analyzing the speed at which a company collects what it's owed can tell you a lot about its financial efficiency. If a company's collection period is growing longer, it could mean problems ahead. The company may be letting customers stretch their credit in order to recognize greater top-line sales and that can spell trouble later on, especially if customers face a cash crunch. Getting money right away is preferable to waiting for it - since some of what is owed may never get paid. The quicker a company gets its customers to make payments, the sooner it has cash to pay for salaries, merchandise, equipment, loans, and best of all, dividends and growth opportunities.

Non-current assets are defined as anything not classified as a current asset. This includes items that are

fixed assets, such as property, plant and equipment (PP&E). Unless the company is in financial distress and is liquidating assets, investors need not pay too much attention to fixed assets. Since companies are often unable to sell their fixed assets within any reasonable amount of time they are carried on the balance sheet at cost regardless of their actual value. As a result, it's is possible for companies to grossly inflate this number, leaving investors with questionable and hard-to-compare asset figures.

Liabilities There are current

liabilities and non-current liabilities. Current liabilities are obligations the firm must pay

within a year, such as payments owing to suppliers. Non-current liabilities, meanwhile, represent what the company owes in a year or more time. Typically, non-current liabilities represent bank and bondholder debt.

You usually want to see a manageable amount of debt. When debt levels are falling, that's a good sign.


Generally speaking, if a company has more assets than liabilities, then it is in decent condition. By contrast, a company with a large amount of liabilities relative to assets ought to be examined with more diligence. Having too much debt relative to cash flows required to pay for interest and debt repayments is one way a company can go bankrupt.

Look at the quick

ratio. Subtract inventory from current assets and then divide by current liabilities. If the

ratio is 1 or higher, it says that the company has enough cash and liquid assets to cover its short-term debt obligations.

Current Assets - Inventories Quick Ratio = Current Liabilities

Equity Equity represents what shareholders own, so it is often called shareholder's equity. As described above, equity is equal to total assets minus total liabilities.

Equity = Total Assets – Total Liabilities

The two important equity items are paid-in

capital and retained earnings. Paid-in capital is the amount

of money shareholders paid for their shares when the stock was first

offered to the public. It basically

represents how much money the firm received when it sold its shares. In other words, retained earnings are a tally of the money the company has chosen to reinvest in the business rather than pay to shareholders. Investors should look closely at how a company puts retained capital to use and how a company generates a return on it.

Fundamental Analysis: The Qualitative factors – The Company Before diving into a company's financial statements, we're going to take a look at some of the qualitative aspects of a company.

Fundamental analysis seeks to determine the intrinsic value of a company's stock. But since qualitative factors, by definition, represent aspects of a company's business that are difficult or impossible to quantify,


incorporating that kind of information into a pricing evaluation can be quite difficult. On the flip side, as we've demonstrated, you can't ignore the less tangible characteristics of a company.

In this section we are going to highlight some of the company-specific qualitative factors that you should be aware of.

Business Model Even before an investor looks at a company's financial statements or does any research, one of the most important questions that should be asked is: What exactly does the company do? This is referred to as a company's business model – it's how a company makes money. You can get a good overview of a company's business

model by checking out its website or reading the first part of its 10-K filing (Note:

We'll get into more detail about the 10-K in the financial statements chapter. For now, just bear with us).

Sometimes business models are easy to understand. Take McDonalds, for instance, which sells hamburgers, fries, soft drinks, salads and whatever other new special they are promoting at the time. It's a simple model, easy enough for anybody to understand.

Other times, you'd be surprised how complicated it can get. Boston Chicken Inc. is a prime example of this. Back in the early '90s its stock was the darling of Wall Street. At one point the company's CEO bragged that they were the "first new fast-food restaurant to reach $1 billion in sales since 1969". The problem is, they didn't make money by selling chicken. Rather, they made their money from royalty fees and high-interest loans to franchisees. Boston Chicken was really nothing more than a big franchisor. On top of this, management was aggressive with how it recognized its revenue. As soon as it was revealed that all the franchisees were losing money, the house of cards collapsed and the company went bankrupt.

At the very least, you should understand the business model of any company you invest in. The "Oracle

of

Omaha", Warren Buffett, rarely invests in tech stocks because most of the time he doesn't understand them. This is not to say the technology sector is bad, but it's not Buffett's area of expertise; he doesn't feel comfortable investing in this area. Similarly, unless you understand a company's business model, you don't know what the drivers are for future growth, and you leave yourself vulnerable to being blindsided like shareholders of Boston Chicken were.

Competitive Advantage Another business consideration for investors is competitive advantage. A company's long-term success is driven largely by its ability to maintain a competitive advantage - and keep it. Powerful competitive advantages, such as Coca Cola's brand name and Microsoft's domination of the personal computer operating system, create a moat around a business allowing it to keep competitors at bay and enjoy growth and profits. When a company can achieve competitive advantage, its shareholders can be well rewarded for


decades.

Management Just as an army needs a general to lead it to victory, a company relies upon management to steer it towards financial success. Some believe that management is the most important aspect for investing in a company. It makes sense - even the best business model is doomed if the leaders of the company fail to properly execute the plan.

So how does an average investor go about evaluating the management of a company?

This is one of the areas in which individuals are truly at a disadvantage compared to professional investors. You can't set up a meeting with management if you want to invest a few thousand dollars. On the other hand, if you are a fund manager interested in investing millions of dollars, there is a good chance you can schedule a face-to-face meeting with the upper brass of the firm.

Every public

company has a corporate information section on its website. Usually there will be a quick

biography on each executive with their employment history, educational background and any applicable achievements. Don't expect to find anything useful here. Let's be honest: We're looking for dirt, and no company is going to put negative information on its corporate website.

Instead, here are a few ways for you to get a feel for management:

1. Conference Calls The Chief

Executive Officer (CEO) and Chief Financial Officer (CFO) host quarterly conference

calls. (Sometimes you'll get other executives as well.) The first portion of the call is management basically reading off the financial results. What is really interesting is the question-and-answer portion of the call. This is when the line is open for analysts to call in and ask management direct questions. Answers here can be revealing about the company, but more importantly, listen for candor. Do they avoid questions, like politicians, or do they provide forthright answers?

2. Management Discussion and Analysis (MD&A) The Management

Discussion and Analysis is found at the beginning of the annual report (discussed

in more detail later in this tutorial). In theory, the MD&A is supposed to be frank commentary on the management's outlook. Sometimes the content is worthwhile, other times it's boilerplate. One tip is to compare what management said in past years with what they are saying now. Is it the same material rehashed? Have strategies actually been implemented? If possible, sit down and read the last five years of MD&As; it can be illuminating.


3. Ownership and Insider Sales Just about any large company will compensate executives with a combination of cash, restricted stock and

options. While there are problems with stock options (See Putting Management Under the Microscope), it is a positive sign that of management are also shareholders. The ideal situation is when the founder of the company is still in charge. Examples include Bill Gates (in the '80s and '90s), Michael Dell and Warren Buffett. When you know that a majority of management's wealth is in the stock, you can have confidence that they will do the right thing. As well, it's worth checking out if management has been selling its stock. This has to be filed with the Securities

and Exchange Commission (SEC), so

it's publicly available information. Talk is cheap - think twice if you see management unloading all of its shares while saying something else in the media.

4. Past Performance Another good way to get a feel for management capability is to check and see how executives have done at other companies in the past. You can normally find biographies of top executives on company web sites. Identify the companies they worked at in the past and do a search on those companies and their performance.

Corporate Governance Corporate governance describes the policies in place within an organization denoting the relationships and responsibilities between management, directors and stakeholders. These policies are defined and determined in the company

charter and its bylaws, along with corporate laws and regulations. The

purpose of corporate governance policies is to ensure that proper checks and balances are in place, making it more difficult for anyone to conduct unethical and illegal activities.

Good corporate governance is a situation in which a company complies with all of its governance policies and applicable government regulations (such as the Sarbanes-Oxley

Act of 2002) in order to look out

for the interests of the company's investors and other stakeholders.

Although, there are companies and organizations (such as Standard

& Poor's) that attempt to

quantitatively assess companies on how well their corporate governance policies serve stakeholders, most of these reports are quite expensive for the average investor to purchase.

Fortunately, corporate governance policies typically cover a few general areas: structure of the board of directors, stakeholder rights and financial and information transparency. With a little research and the right questions in mind, investors can get a good idea about a company's corporate governance.


Financial and Information Transparency This aspect of governance relates to the quality and timeliness of a company's financial disclosures and operational happenings. Sufficient transparency implies that a company's financial releases are written in a manner that stakeholders can follow what management is doing and therefore have a clear understanding of the company's current financial situation.

Stakeholder Rights This aspect of corporate governance examines the extent that a company's policies are benefiting stakeholder interests, notably shareholder interests. Ultimately, as owners of the company, shareholders should have some access to the board of directors if they have concerns or want something addressed. Therefore companies with good governance give shareholders a certain amount of ownership voting rights to call meetings to discuss pressing issues with the board.

Another relevant area for good governance, in of ownership rights, is whether or not a company possesses large amounts of takeover defenses (such as the Macaroni

Defense or the Poison Pill) or

other measures that make it difficult for changes in management, directors and ownership to occur. (To read more on takeover strategies, see The

Wacky World of M&As.)

Structure of the Board of Directors The board of directors is composed of representatives from the company and representatives from outside of the company. The combination of inside and outside directors attempts to provide an independent assessment of management's performance, making sure that the interests of shareholders are represented.

The key word when looking at the board of directors is independence. The board of directors is responsible for protecting shareholder interests and ensuring that the upper management of the company is doing the same. The board possesses the right to hire and fire of the board on behalf of the shareholders. A board filled with insiders will often not serve as objective critics of management and will defend their actions as good and beneficial, regardless of the circumstances.


Valuations While the concept behind discounted

cash flow analysis is simple, its practical application can be a

different matter. The premise of the discounted cash flow method is that the current value of a company is simply the present value of its future cash flows that are attributable to shareholders. Its calculation is as follows:

For simplicity's sake, if we know that a company will generate $1 per share in cash flow for shareholders every year into the future; we can calculate what this type of cash flow is worth today. This value is then compared to the current value of the company to determine whether the company is a good investment, based on it being undervalued or overvalued.

There are several different techniques within the discounted cash flow realm of valuation, essentially differing on what type of cash flow is used in the analysis. The dividend

discount model focuses on the

dividends the company pays to shareholders, while the cash flow model looks at the cash that can be paid to shareholders after all expenses, reinvestments and debt repayments have been made. But conceptually they are the same, as it is the present value of these streams that are taken into consideration.

As we mentioned before, the difficulty lies in the implementation of the model as there are a considerable amount of estimates and assumptions that go into the model. As you can imagine, forecasting the revenue and expenses for a firm five or 10 years into the future can be considerably difficult. Nevertheless, DCF is a valuable tool used by both analysts and everyday investors to estimate a company's value.

For more information and in-depth instructions, see the Discounted

Cash Flow Analysis tutorial.

Ratio Valuation Financial ratios are mathematical calculations using figures mainly from the financial statements, and they are used to gain an idea of a company's valuation and financial performance. Some of the most well-known valuation ratios are price-to-earnings and price-to-book. Each valuation ratio uses different measures in its calculations. For example, price-to-book compares the price per share to the company's book value.

The calculations produced by the valuation ratios are used to gain some understanding of the company's value. The ratios are compared on an absolute basis, in which there are threshold values. For example, in price-to-book, companies trading below '1' are considered undervalued. Valuation ratios are also compared to the historical values of the ratio for the company, along with comparisons to competitors and the overall market itself.


Conclusion Whenever you’re thinking of investing in a company it is vital that you understand what it does, its market and

the

industry

in

which

it

operates.

You

should

never

blindly

invest

in

a

One of the most important areas for any investor to look at when researching a company is the

company.

financial

statements. It is essential to understand the purpose of each part of these statements and how to interpret them.

Let's recap what we've learned:

•

Financial reports are required by law and are published both quarterly and annually.

•

Management discussion and analysis (MD&A) gives investors a better understanding of what the company does and usually points out some key areas where it performed well.

•

Audited financial reports have much more credibility than unaudited ones.

•

The balance sheet lists the assets, liabilities and shareholders' equity.

•

For all balance sheets: Assets = Liabilities + Shareholders’ Equity. The two sides must always equal each other (or balance each other).

•

The income statement includes figures such as revenue, expenses, earnings and earnings per share.

•

For a company, the top line is revenue while the bottom line is net income.

•

The income statement takes into some non-cash items, such as depreciation.


•

The cash flow statement strips away all non-cash items and tells you how much actual money the company generated.

•

The cash flow statement is divided into three parts: cash from operations, financing and investing.

•

Always read the notes to the financial statements. They provide more in-depth information on a wide range of figures reported in the three financial statements.


RESEARCH METHODOLOGY


PROBLEM STATEMENT:¾ Recent Performance of cement sector

RESEARCH OBJECTIVES:¾ To examine overall financial performance of the cement Sector

Research Methodology and analysis The methods used are fundamental basic analysis from “STRATEGIC FINANCIAL MANAGEMENT”. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex, change in working capital, has been calculated on net block taking Fy 06 as a base year, and then it was calculated with different growth rates such as 5%, 8%, 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE has been taken among the 5 companies.


DATA ANALYSIS AND INTERPRETATION


Birla Corporation Ltd. Birla Corporation Ltd.(formerly Birla Jute & Industries), a part of M P Birla Group was established in 1919. The company is into manufacture of cement, jute products, autoancillaries, PVC floor coverings, wallpapers, coated cotton fabrics, etc. Its also has its presence in steel industry.

The company's cement capacity of 4.78 million tpa were spread in its four cement units located in Madhya Pradesh, Uttar Pradesh, Rajasthan and West Bengal. But the jute, carbide, gases, synthetic viscose/cotton yarn and PVC flooring & wall covering divisions are in West Bengal. It also has a steel casting unit in Madhya Pradesh. The Auto Trim division of the company has three plants, each in West Bengal, Maharashtra and Haryana.

The subsidiaries of the company are Assam Jute Supply Company Ltd, Talavadi Cements Ltd and Lok Cements Ltd.

In 1994-95, two units of the company Durgapur Cement Works and Birla Synthetics were awarded the ISO 9002 certification. Satna Cement Works and the jute division have also obtained the same certification. In 1996-97, the company installed 2 DG sets of 6 MW capacity each at Satna and one DG set of similar capacity at Chittor.

The company modernized/upgraded one of its plants at Cittor Cement Works at Chittorgarh during 2001-02. The installed capacity at Chittorgarh and the Company as a whole increased to 20.00 lac tonnes. And debottlenecking carried out in Chittorgarh plant and installed capacity was also increased to 45.10 lac tonnes.

The company come out with a rights issue of 2,20,01,528 ordinary shares of Rs 10 each for cash at a of Rs 9 per share aggregating to Rs 41.8 cr to the existing ordinary shareholders of the company in the ratio of 2:5. An expansion project was also taken up at Raebareli which was completed and as a result the capacity of Cement Grinding was


enhanced to 6.30 lac tonnes from 3.60 lac tonnes. With this expansion the total installed capacity of the cement has increased to 47.80 lac tonnes p.a. The company has expanded its installed capacity of Auto Trim Parts by 36000 Pcs. during 2004-05 and with this expansion the total installed capacity of Auto Trim Parts has increased to 603000 Pcs.

During April 2004 the company has decided to close its Birla Synthetics at Birlapur and in February 2005 the Birla Carbide & Gases unit at Birlapur, since there has been no production in these units.

The company has commenced commercial production in its new unit Durga Hitech Cement at Durgapur, which has a capacity to manufacture 1 Million tonnes Cement during December 2005.

Chettinad Cement Corporation Ltd Incorporated in the year 1962, Chettinad Cement Corporation (CCCL) has been awarded the ISO 9002 certificate by the Bureau of Indian Standards, in 1994. It is the first company in Tamilnadu to be honored with the certificate, in the field of mining. CCCL has diversified into shipping. Its shipping fleet consisits of two bulk carriers viz m.v. Chettinand Tradition and m.v. Chettinad Prince. The Second Cement plant at Karikkali,Tamil Nadu faced some teething problem in 2002 and in 2003 the plant was successful in making it fully operational with optimum efficiency. During 2002-03 the comapny completed the Rights Issue of 84,31,700 equity shares in the ratio of 2:5 at a of Rs.26/- per share.

The company has commissioned a 15 MW Captive Thermal Plant at its plant at Karikal during October 2004.The Karur unit of Chettinad Cements has been functioning with the highest operating ratio for any cement unit in the southern region. In Sep. 94, the company commissioned 16 wind power generators near Poolavadi, Coimbatore. In addition, 26 wind power generators have been installed in Mar.'95, in the same place. While 12 No of 225 KW each of Wind Power Generator commissioned in 1995-96.


Totally 66 wind power generators for a capacity of 17.35 MW have been installed in four phases and they are functioning well. The project was financed by the Industrial Finance Corporation of India (IFCI) and internal accruals. CCCL has diversified into shipping. Its shipping fleet consisits of two bulk carriers viz m.v. Chettinad Tradition and m.v. Chettinad Prince. The Second Cement plant at Karikkali,Tamil Nadu faced some teething problem in 2002 and in 2003 the plant was successful in making it fully operational with optimum efficiency. During 2002-03 the company completed the Rights Issue of 84,31,700 equity shares in the ratio of 2:5 at a of Rs.26/- per share.

The company has commissioned a 15 MW Captive Thermal Plant at its plant at Karikal during October 2004.

India Cements Ltd(ICL) India Cements Ltd(ICL) was established in Feb.'46, it is a diversified company with interests in cement, shipping and real estate development. The first cement unit was commissioned in 1949 at Sankarnagar, Tamilnadu. By 1970, the capacity was raised to 9.1 lac tpa. The second cement plant at Sankari, Tamilnadu, was commissioned in 1963, with a capacity of 2 lac tpa, which was increased to 4 lac tpa in 1966 and to 6 lac tpa in 1971.

The subsidiaries of the company are ICL Securities Ltd, ICL International Ltd, Industrial Chemicals & Monomers Ltd and ICL Financial Services Ltd.

In 1990 with ICL's acquisition of Coromandel Cement plant at Cuddapah, installed Capacity rose to 2.6 million tonnes per annum. During 1991-92, the company started shipping activities by time-chartering dry bulk-cargo carriers. In 1994 ICL successfully floated a US$ 50 million GDR issue. In 1995 it announced a 1:1 Bonus. It acquired its fifth bulk carrier in 1995. The company is also engaged in real estate and property development and it also has a wind farm in Coimbatore.


In 1996 ICL's green field cement plant at Dalavoi commenced commercial production with an Installed capacity 90,000 TPA. In 1997 India cements acquired Aruna Sugars Finance Ltd which was later renamed as India Cements Capital & Finance Ltd. It also acquired Cement Plant of Visaka Cement Industry, at Tandur, Ranga Reddy district of Andhra Pradesh with Installed capacity 9,00,000 Tonnes.

The cement division of Raasi Cement (RCL) was vested with the company from Apr.'98 under a scheme of arrangement. Also during the same year the company hived off its shipping division to ICL Shipping (ICLS). It also acquired Cement Corporation of India's Yerraguntla Cement Plant at Andhra Pradesh with an Installed capacity 4,00,000 Tonnes.

In Oct.'99, ICL Securities, the company wholly owned subsidiary acquired 49.05% of the equity share capital in Sri Vishnu Cement (SVCL), simultaneously, Raasi Cement also acquired 39.5% of the equity capital of SVCL. At present the company along with its subsidiary holds 94.16% of the share capital of SVCL and is now a subsidiary of the company.

The upgradation of the Chilamakur cement plant to 3800 TPD has been completed. The upgradation in another group company -- Sri Vishnu Cement -- from 2750 TPD of clinker to 3400 TPD was complete in the fiscal 2001.

During 2001-02, the company has launched a portal 'homztoday.com' containing A to Z on home making. This is a comprehensive web site focusing on a variety of home needs and providing various categories of s information ranging from property purchase to locating any type of service provider to homes.

During 2004-05, the unique Waste Heat Recovery System for generation of power from waste gas at Vishnupuram plant was commissioned with generating power of 7.7MW. Currently, the plant locations of the company are at Sankarnagar, Sankari and Dalavoi in Tamilnadu, Chilamakur, Yerraguntla and Vishnupuram in Andhra Pradesh.


Madras Cements Ltd(MCL) Madras Cements Ltd(MCL), a flagship of the Ramco group, is a major player in the blended cement category in South India and is very popular for its Ramco brands of cements like `Ramco super steel cement' and `Ramco super grade cement'. It also operates a ready mix concrete plant (RMC) near Chennai.

Between 1980 and 1985, it undertook a modernization programme and replaced its four cement mills in R N Nagar, Tamilnadu, with a single new combined cement mill which ensured substantial reduction in energy and operation costs. In 1986, MCL implemented one more cement plant in Jayanthipuram, Andhra Pradesh.

In 1990-91, the company expanded the capacity of its factory by 100000 tpa at an estimated cost of Rs 21.5 cr. In 1992-93, it diversified into power generation by setting up a 4-MW windmill at Muppandal in Kanyakumari, Tamilnadu, which was upgraded by adding eight wind turbines of 250 kW, thereby taking the generation capacity to 6 MW. In 1994-95, 70 additional wind mills were installed in Poolavadi, TN. The total Installed capacity of these plants, consisting 123 Wind Energy Generators is 34.44 MW. During 2004-05, The company commissioned a 36 MW Thermal Power Plant at Alathiyur.

The company, for the first time in India, commissioned a surface mine to modernize the mine operations at Ramasamyraja Nagar factory. The company received ISO 9002 certification for its units in Ramasamyraja Nagar, Alathiyur and ready mix concrete unit in Vengaivasal.

During 1999-00, the company's slag grinding project at Jayanthipuram for manufacture of blended cement was commissioned and also the capacity of the Alathiyur unit was expanded by 0.2 million TPA. The company's second unit at Alathiyur with a capacity of 15 lac tonnes at an estimated cost of Rs 300 crore was commissioned up to the clinkerisation in Jan.'01. The cement mill was commissioned in May '01. The klin fitted with cross bar cooler, the first of its kind outside US and the Vertical mill for cement


grinding, the highest of its kind in Asia set up in Alathiyur Unit.

The company took over the assets of Karnataka Minerals & Manufacturing Co, a mini cement plant situated at Mathodu, Hosadurga Taluk, Chitradurga Dist. The second klin at R Nagar was upgraded in May'01 with the installation of fixed inlet segment to the cooler, new calciner and modifying preheater cyclone, thereby increasing the capacity of the unit to 11 lac TPA of blended cement.

The company's new project Dry Motor Plant for manufacture of high technology construction products such as render, skimcoat and dryconcrete started production from January 2003 in Sriperumbudur, with the help of M.Tech, who conducted the training assistance to the architects, consultants, builders and contractors to know about the advantages of new product.

The company subdivided its value of Equity shares from Rs 100/- to Rs.10/- in the ratio 1:10 with effective from Nov. 06, 2003

Madras Cements Ltd(MCL) Madras Cements Ltd(MCL), a flagship of the Ramco group, is a major player in the blended cement category in South India and is very popular for its Ramco brands of cements like `Ramco super steel cement' and `Ramco super grade cement'. It also operates a ready mix concrete plant (RMC) near Chennai.

Between 1980 and 1985, it undertook a modernization programme and replaced its four cement mills in R N Nagar, Tamilnadu, with a single new combined cement mill which ensured substantial reduction in energy and operation costs. In 1986, MCL implemented one more cement plant in Jayanthipuram, Andhra Pradesh.

In 1990-91, the company expanded the capacity of its factory by 100000 tpa at an estimated cost of Rs 21.5 cr. In 1992-93, it diversified into power generation by setting up a 4-MW windmill at Muppandal in Kanyakumari, Tamilnadu, which was upgraded by


adding eight wind turbines of 250 kW, thereby taking the generation capacity to 6 MW. In 1994-95, 70 additional wind mills were installed in Poolavadi, TN. The total Installed capacity of these plants, consisting 123 Wind Energy Generators is 34.44 MW. During 2004-05, The company commissioned a 36 MW Thermal Power Plant at Alathiyur.

The company, for the first time in India, commissioned a surface mine to modernize the mine operations at Ramasamyraja Nagar factory. The company received ISO 9002 certification for its units in Ramasamyraja Nagar, Alathiyur and ready mix concrete unit in Vengaivasal.

During 1999-00, the company's slag grinding project at Jayanthipuram for manufacture of blended cement was commissioned and also the capacity of the Alathiyur unit was expanded by 0.2 million TPA. The company's second unit at Alathiyur with a capacity of 15 lac tonnes at an estimated cost of Rs 300 crore was commissioned up to the clinkerisation in Jan.'01. The cement mill was commissioned in May '01. The klin fitted with cross bar cooler, the first of its kind outside US and the Vertical mill for cement grinding, the highest of its kind in Asia set up in Alathiyur Unit.

The company took over the assets of Karnataka Minerals & Manufacturing Co, a mini cement plant situated at Mathodu, Hosadurga Taluk, Chitradurga Dist. The second klin at R Nagar was upgraded in May'01 with the installation of fixed inlet segment to the cooler, new calciner and modifying preheater cyclone, thereby increasing the capacity of the unit to 11 lac TPA of blended cement.

The company's new project Dry Motor Plant for manufacture of high technology construction products such as render, skimcoat and dryconcrete started production from January 2003 in Sriperumbudur, with the help of M.Tech, who conducted the training assistance to the architects, consultants, builders and contractors to know about the advantages of new product.


The company subdivided its value of Equity shares from Rs 100/- to Rs.10/- in the ratio 1:10 with effective from Nov. 06, 2003

K C P Ltd A multi-product company with two sugar mills, a downstream distillery, a cement plant and an engineering division, K was initially a sick sugar unit (cap. : 600 tpd). It was taken over by the late Velagapudi Ramakrishna in 1941. The merger of Challapalli Sugars - a BIFR company - with it in 1988 and expansions have increased its sugar capacity tenfold to 6300 tpd over the last five decades.

The cement factory, set up in 1958, was the first dry process plant in India. The engineering division was set up in 1955 as an in-house venture to manufacture sugar machinery required by the company. Manufacture of machinery required for cement, chemicals, steel castings, etc, were later added to this division. Both the cement and engineering divisions have been accredited with the ISO 9002 and ISO 9001 certification respectively in 1994.

K hived off its sugar and industrial alcohol business, which was transferred to a new company, K Sugar Industries Corporation. The Company also undertook a t venture with Vantech Industries for the manufacture of specialized insecticides. K promoted FCB-K, a t venture with FCB, , in a 40:40 equity participation. The new company is to manufacture and supply state-of-the-art machinery and technology to clients in the sugar industry both in India and abroad.

The cement unit of the company continues to retain the ISO 9001 certification while the engineering unit was accredited to use the symbol 'S' and 'U' of the American Society of Mechanical Engineers (ASME) for the manufacture and assembly of power boilers and pressure vessels, respectively on 15 May'96. K has also received the Certificate of Merit for outstanding export performance during 1994-95 among Non-SSI exporters in industrial machinery for manufacture of sugar, paper, chemical, cement and pharmaceuticals.


The company had set up 5 mini-hydol units aggregating 8.25 MW capacity in the Guntur branch canal of the Nagarjuna Sagar Dam. Electricity generated in this unit is wheeled to the cement unit for use. During 2001-02 the company entered into an agreement with Andhra Pradesh Transmission Corporation Limited(APTRANSCO) for wheeling the generated energy at Hydel stations to the cement plant with a wheeling charge of 2% fixed for a period of 20 years.

ANALYSIS. Financial Analysis of Birla Corporation Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 4th place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 94.28 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates.

BIRLA DEBT EQUITY WACOC=

WACOC=

271.78 65.2272 KeWe*KdWd

6.27

D/E

0.76

INTEREST 13.62 Kd= 5.011406 Ke= 15 TAX 30% TOTAL CAPITAL

% 337.01

The terminal value is calculated as 10th year FCFF (wacoc-growth rate)*100 Value of equity per share varied from 789.39 at growth rate of 5% to -1515.11 at 8% to 967.92 at 12% and -945.36 at 15%. Value of firm is at 6350.54 at 5% growth rate to 11395.39 at 8% to -7181.73 at 12% and -7007.98 at 15%.value of debt is 271.78 cr.


Value of equity varied from 6078.76 at 5% to -11667.17 at 8% to -7453.51 at 12% and 7279.76 at 15%.

Financial Analysis of Chettinad cements Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 3rd place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 76.29.it has been below average ,the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates. chettinad cement DEBT EQUITY WACOC=

WACOC=

304.91 597.6236 KeWe*KdWd

8.25

D/E

1.96


% 902.53

The terminal value is calculated as 10th year FCFF( wacoc-growth rate)*100 Value of equity per share varied from -86.72 at growth rate of 5% to 400.63 at 8% to 4.88 at 12% and 287.76 at 15%. Value of firm is at -2286.66 at 5% growth rate to 12124.93 at 8% to 306.35 at 12% and 1153.89 at 15%.value of debt is 304.91 cr. Value of equity varied from -2591.57 at 5% to 11820.02 at 8% to 1.44 at 12% and 848.98 at 15%.


Financial Analysis of India Cements Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at last place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 83.22 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates. India Cement DEBT

1,525.24

EQUITY

4285.9244

D/E

2.81

INTEREST 148.93 WACOC= KeWe*KdWd

WACOC= 8.98

Kd=

9.764365

Ke=

15

TAX

30%

TOTAL CAPITAL

%

5,811.16

The terminal value is calculated as 10th year FCFF( wacoc-growth rate)*100

Value of equity per share varied 1475.75 at growth rate of 5% to 728.43 at 8% to -314.3 at 12% and -354.98 at 15%. Value of firm is at 3625.04 at 5% growth rate to 16421.52 at 8% to -6557.47 at 12% and -7453.97 at 15%.value of debt is 368.94cr. Value of equity varied from 3256.1 at 5% to 16052.58 at 8% to -6926.41 at 12% and -7822.91 at 15%.


Financial Analysis of K C P Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 2nd place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 90.8 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates. K.C.P.LTD DEBT EQUITY WACOC=

WACOC=

60.71 31.5692 KeWe*KdWd

9.86

D/E

0.52


% 92.28

The terminal value is calculated as 10th year FCFF( wacoc-growth rate)*100 Value of equity per share varied from -145.5 at growth rate of 5% to -2209.19 at 8% to 785 at 12% and 1096.28 at 15%. Value of firm is at -126.87 at 5% growth rate to -11395.39 at 8% to 7181.73 at 12% and -7007.98 at 15%.value of debt is 60.71 cr. Value of equity varied from 187.58 at 5% to -2269.9 at 8% to 724.29 at 12% and 1035.57 at 15%.


Financial Analysis of Madras cements Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 1st place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 73.88 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates. madras cement DEBT EQUITY WACOC=

WACOC=

602.44 1072.3432 KeWe*KdWd

8.10

D/E

1.78


% 1,674.78

The terminal value is calculated as 10th year FCFF( wacoc-growth rate)*100 Value of equity per share varied from -371.59 at growth rate of 5% to 901.83at 8% to -107.62 at 12% and -106 at 15%. Value of firm is at -3469.72 at 5% growth rate to 109524.6at 8% to – 12395.81 at 12% and -12199.99 at 15%.value of debt is 602.44 cr. Value of equity varied from 4072.16 at 5% to -108922.16 at 8% to -12998.25 at 12% and -12802.43 at 15%.


Financial Analysis


CHANGE IN CAPEX



Birla corporation Ltd. 5% NET BLOCK CHANGE IN CAPEX 8% NET BLOCK CHANGE IN CAPEX 12% NET BLOCK CHANGE IN CAPEX 15% NET BLOCK CHANGE IN CAPEX

STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH 1 2 3 4 5 6 7 525.24 551.50 579.08 608.03 638.43 670.36 703.87 25.01 26.26 27.58 28.95 30.40 31.92 33.52 STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH BASE 1 2 3 4 5 6 7 500.23 540.25 583.47 630.15 680.56 735.00 793.80 857.31 40.02 43.22 46.68 50.41 54.44 58.80 63.50 STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH BASE 1 2 3 4 5 6 7 500.23 560.26 627.49 702.79 787.12 881.58 987.37 1105.85 60.03 67.23 75.30 84.33 94.45 105.79 118.48 STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH BASE 1 2 3 4 5 6 7 500.23 575.26 661.55 760.79 874.91 1006.14 1157.06 1330.62 75.03 86.29 99.23 114.12 131.24 150.92 173.56 BASE 500.23

8 739.07 35.19

9 776.02 36.95

10 814.82 38.80

8 925.89 68.58

9 999.96 74.07

10 1079.96 80.00

8 1238.55 132.70

9 1387.18 148.63

10 1553.64 166.46

8 1530.22 199.59

9 1759.75 229.53

10 2023.71 263.96

Chettinad cements ltd. 5% NET BLOCK CHANGE IN CAPEX 8% NET BLOCK CHANGE IN CAPEX 12% NET BLOCK CHANGE IN CAPEX

STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH BASE 1 2 3 4 5 6 7 479.48 503.45 528.63 555.06 582.81 611.95 642.55 674.68 23.97 25.17 26.43 27.75 29.14 30.60 32.13 STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH BASE 1 2 3 4 5 6 7 479.48 517.84 559.27 604.01 652.33 704.51 760.87 821.74 38.36 41.43 44.74 48.32 52.19 56.36 60.87 STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH BASE 1 2 3 4 5 6 7 479.48 537.02 601.46 673.63 754.47 845.01 946.41 1059.98 57.54 64.44 72.18 80.84 90.54 101.40 113.57


8 708.41 33.73

9 743.83 35.42

10 781.02 37.19

8 887.48 65.74

9 958.48 71.00

10 1035.16 76.68

8 1187.17 127.20

9 1329.64 142.46

10 1489.19 159.56

15% NET BLOCK CHANGE IN CAPEX

STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH BASE 1 2 3 4 5 6 7 479.48 551.40 634.11 729.23 838.61 964.41 1109.07 1275.43 71.92 82.71 95.12 109.38 125.79 144.66 166.36

8 1466.74 191.31

9 1686.75 220.01

10 1939.76 253.01

India Cements Ltd. 5%

BASE 2083.99

8%

BASE 2083.99


BASE 2083.99

15%

BASE 2083.99

NET BLOCK CHANGE IN CAPEX



STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH 1 2 3 4 5 6 7 2188.19 2297.60 2412.48 2533.10 2659.76 2792.75 2932.38 104.20 109.41 114.88 120.62 126.66 132.99 139.64 STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH 1 2 3 4 5 6 7 2250.71 2430.77 2625.23 2835.25 3062.07 3307.03 3571.59 166.72 180.06 194.46 210.02 226.82 244.97 264.56 STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH 1 2 3 4 5 6 7 2334.07 2614.16 2927.86 3279.20 3672.70 4113.43 4607.04 250.08 280.09 313.70 351.34 393.50 440.72 493.61 STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH 1 2 3 4 5 6 7 2396.59 2756.08 3169.49 3644.91 4191.65 4820.40 5543.45 312.60 359.49 413.41 475.42 546.74 628.75 723.06


8 3079.00 146.62

9 3232.95 153.95

10 3491.59 258.64

8 3857.32 285.73

9 4165.91 308.59

10 4499.18 333.27

8 5159.88 552.84

9 5779.07 619.19

10 6472.56 693.49

8 6374.97 831.52

9 7331.22 956.25

10 8430.90 1099.68

Madras cements ltd 5%

BASE 989.89

8%

BASE 989.89

12%

BASE 989.89



NET BLOCK CHANGE IN CAPEX 15% NET BLOCK CHANGE IN CAPEX

BASE 989.89

STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH 1 2 3 4 5 6 7 1039.38 1091.35 1145.92 1203.22 1263.38 1326.55 1392.87 49.49 51.97 54.57 57.30 60.16 63.17 66.33 STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH 1 2 3 4 5 6 7 1069.08 1154.61 1246.98 1346.73 1454.47 1570.83 1696.50 79.19 85.53 92.37 99.76 107.74 116.36 125.67 STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH 1 2 3 4 5 6 7 1108.68 1241.72 1390.72 1557.61 1744.52 1953.87 2188.33 118.79 133.04 149.01 166.89 186.91 209.34 234.46 STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH 1 2 3 4 5 6 7 1138.37 1309.13 1505.50 1731.32 1991.02 2289.68 2633.13 148.48 170.76 196.37 225.82 259.70 298.65 343.45

8 1462.52 69.64

9 1535.64 73.13

10 1612.43 76.78

8 1832.22 135.72

9 1978.79 146.58

10 2137.10 158.30

8 2450.93 262.60

9 2745.04 294.11

10 3074.45 329.41

8 3028.10 394.97

9 3482.31 454.21

10 4004.66 522.35

K.C.P.ltd 5% NET BLOCK CHANGE IN CAPEX 8% NET BLOCK CHANGE IN CAPEX 12% NET BLOCK CHANGE IN CAPEX

STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH BASE 1 2 3 4 5 6 7 68.98 72.43 78.22 84.48 91.24 98.54 106.42 114.94 3.45 5.79 6.26 6.76 7.30 7.88 8.51 STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH BASE 1 2 3 4 5 6 7 68.98 74.50 80.46 86.89 93.85 101.35 109.46 118.22 5.52 5.96 6.44 6.95 7.51 8.11 8.76 STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH BASE 1 2 3 4 5 6 7 68.98 77.26 86.53 96.91 108.54 121.57 136.15 152.49 8.28 9.27 10.38 11.63 13.02 14.59 16.34


8 124.13 9.19

9 134.06 9.93

10 144.79 10.72

8 127.68 9.46

9 137.89 10.21

10 148.92 11.03

8 170.79 18.30

9 191.29 20.50

10 214.24 22.95


STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH BASE 1 2 3 4 5 6 7 68.98 79.33 91.23 104.91 120.65 138.74 159.55 183.49 10.35 11.90 13.68 15.74 18.10 20.81 23.93 68.98 79.33 91.23 104.91 120.65 138.74 159.55


8 211.01 27.52 183.49

9 242.66 31.65 211.01

10 279.06 36.40 242.66


CHANGE IN WORKING CAPITAL



BIRLA CORPORATION LTD. STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 % GROWTH AT 5% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC

BASE 105.72 27.7 59.23 124.87 317.52 257.53 50.27 307.8 9.72

1 111.006 29.085 62.1915 131.1135 333.396 270.4065 52.7835 323.19 10.206 0.486

2 116.5563 30.53925 65.30108 137.6692 350.0658 283.9268 55.42268 339.3495 10.7163 0.5103

3 122.3841 32.06621 68.56613 144.5526 367.5691 298.1232 58.19381 356.317 11.25212 0.535815

4 128.5033 33.66952 71.99444 151.7803 385.9475 313.0293 61.1035 374.1328 11.81472 0.562606

5 134.9285 35.353 75.59416 159.3693 405.2449 328.6808 64.15867 392.8395 12.40546 0.590736

6 141.6749 37.12065 79.37386 167.3377 425.5072 345.1148 67.36661 412.4814 13.02573 0.620273

7 148.7587 38.97668 83.34256 175.7046 446.7825 362.3706 70.73494 433.1055 13.67702 0.651286

8 156.1966 40.92552 87.50969 184.4899 469.1217 380.4891 74.27169 454.7608 14.36087 0.683851

9 164.0064 42.97179 91.88517 193.7144 492.5777 399.5136 77.98527 477.4988 15.07891 0.718043

10 172.2067 45.12038 96.47943 203.4001 517.2066 419.4892 81.88453 501.3738 15.83286 0.753946

7 181.1855 47.47293 101.5098 214.0052 544.1735 441.3612 86.15395 527.5151 16.65837 1.233953

8 195.6803 51.27077 109.6306 231.1257 587.7074 476.6701 93.04626 569.7163 17.99104 1.33267

9 211.3348 55.37243 118.401 249.6157 634.7239 514.8037 100.49 615.2936 19.43032 1.439283

10 228.2416 59.80222 127.8731 269.585 685.5019 555.988 108.5292 664.5171 20.98475 1.554426

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 8 % GROWTH AT 8% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC

BASE 105.72 27.7 59.23 124.87 317.52 257.53 50.27 307.8 9.72

1 114.1776 29.916 63.9684 134.8596 342.9216 278.1324 54.2916 332.424 10.4976 0.7776

2 123.3118 32.30928 69.08587 145.6484 370.3553 300.383 58.63493 359.0179 11.33741 0.839808


3 133.1768 34.89402 74.61274 157.3002 399.9838 324.4136 63.32572 387.7394 12.2444 0.906993

4 143.8309 37.68554 80.58176 169.8843 431.9825 350.3667 68.39178 418.7585 13.22395 0.979552

5 155.3374 40.70039 87.0283 183.475 466.5411 378.3961 73.86312 452.2592 14.28187 1.057916

6 167.7644 43.95642 93.99057 198.153 503.8643 408.6677 79.77217 488.4399 15.42442 1.14255


BASE 105.72 27.7 59.23 124.87 317.52 257.53 50.27 307.8 9.72

1 118.4064 31.024 66.3376 139.8544 355.6224 288.4336 56.3024 344.736 10.8864 1.1664

2 132.6152 34.74688 74.29811 156.6369 398.2971 323.0456 63.05869 386.1043 12.19277 1.306368

3 148.529 38.91651 83.21389 175.4334 446.0927 361.8111 70.62573 432.4368 13.6559 1.463132

4 166.3525 43.58649 93.19955 196.4854 499.6239 405.2284 79.10082 484.3293 15.29461 1.638708

5 186.3148 48.81686 104.3835 220.0636 559.5787 453.8559 88.59292 542.4488 17.12996 1.835353

6 208.6725 54.67489 116.9095 246.4712 626.7282 508.3186 99.22407 607.5426 19.18556 2.055595

7 233.7132 61.23587 130.9387 276.0478 701.9356 569.3168 111.131 680.4477 21.48782 2.302267

8 261.7588 68.58418 146.6513 309.1735 786.1678 637.6348 124.4667 762.1015 24.06636 2.578539

9 293.1699 76.81428 164.2495 346.2743 880.508 714.151 139.4027 853.5536 26.95433 2.887963

1 328.350 86.03 183.959 387.827 986.168 799.849 156.13 955.980 30.1888 3.23451

7 281.2173 73.68255 157.553 332.1567 844.6095 685.0349 133.7192 818.7541 25.85539 3.372443

8 323.3999 84.73493 181.1859 381.9802 971.3009 787.7902 153.7771 941.5672 29.7337 3.878309

9 371.9099 97.44517 208.3638 439.2772 1116.996 905.9587 176.8436 1082.802 34.19376 4.460055

1 427.696 112.061 239.618 505.168 1284.54 1041.85 203.370 1245.22 39.3228 5.12906


BASE 105.72 27.7 59.23 124.87 317.52 257.53 50.27 307.8 9.72

1 121.578 31.855 68.1145 143.6005 365.148 296.1595 57.8105 353.97 11.178 1.458


2 139.8147 36.63325 78.33168 165.1406 419.9202 340.5834 66.48208 407.0655 12.8547 1.6767

3 160.7869 42.12824 90.08143 189.9117 482.9082 391.6709 76.45439 468.1253 14.78291 1.928205

4 184.9049 48.44747 103.5936 218.3984 555.3445 450.4216 87.92254 538.3441 17.00034 2.217436

5 212.6407 55.71459 119.1327 251.1582 638.6461 517.9848 101.1109 619.0957 19.55039 2.550051

6 244.5368 64.07178 137.0026 288.8319 734.4431 595.6825 116.2776 711.9601 22.48295 2.932559

CHETTINAD CEMENTS STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 % GROWTH AT 5% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC

BASE 100.17 17.44 21.49 40.76 179.86 77.59 30.09 107.68 72.18

1 105.1785 18.312 22.5645 42.798 188.853 81.4695 31.5945 113.064 75.789 3.609

2 110.4374 19.2276 23.69273 49.2177 217.181 85.54298 33.17423 118.7172 79.57845 3.78945

3 115.9593 20.18898 24.87736 56.60036 249.7581 89.82012 34.83294 124.6531 83.55737 3.978923

4 121.7573 21.19843 26.12123 65.09041 287.2218 94.31113 36.57458 130.8857 87.73524 4.177869

5 127.8451 22.25835 27.42729 74.85397 330.3051 99.02669 38.40331 137.43 92.122 4.386762

6 134.2374 23.37127 28.79866 86.08206 379.8508 103.978 40.32348 144.3015 96.7281 4.6061

7 140.9492 24.53983 30.23859 98.99437 436.8285 109.1769 42.33965 151.5166 101.5645 4.836405

8 147.9967 25.76682 31.75052 113.8435 502.3527 114.6358 44.45663 159.0924 106.6427 5.078225

9 155.3965 27.05516 33.33804 130.9201 577.7056 120.3676 46.67947 167.047 111.9749 5.332137

10 163.1664 28.40792 35.00495 150.5581 664.3615 126.3859 49.01344 175.3994 117.5736 5.598744

7 171.6738 29.8891 36.83008 69.85548 308.2484 132.9756 51.56897 184.5446 123.7038 9.163247

8 185.4077 32.28022 39.77649 75.44392 332.9083 143.6137 55.69449 199.3082 133.6001 9.896307

9 200.2403 34.86264 42.95861 81.47943 359.541 155.1028 60.15005 215.2528 144.2882 10.68801

10 216.2595 37.65165 46.3953 87.99778 388.3043 167.511 64.96205 232.473 155.8312 11.54305


BASE 100.17 17.44 21.49 40.76 179.86 77.59 30.09 107.68 72.18

1 108.1836 18.8352 23.2092 44.0208 194.2488 83.7972 32.4972 116.2944 77.9544 5.7744

2 116.8383 20.34202 25.06594 47.54246 209.7887 90.50098 35.09698 125.598 84.19075 6.236352


3 126.1854 21.96938 27.07121 51.34586 226.5718 97.74105 37.90473 135.6458 90.92601 6.73526

4 136.2802 23.72693 29.23691 55.45353 244.6975 105.5603 40.93711 146.4975 98.20009 7.274081

5 147.1826 25.62508 31.57586 59.88981 264.2733 114.0052 44.21208 158.2172 106.0561 7.856007

6 158.9572 27.67509 34.10193 64.681 285.4152 123.1256 47.74905 170.8746 114.5406 8.484488


BASE 100.17 17.44 21.49 40.76 179.86 77.59 30.09 107.68 72.18

1 112.1904 19.5328 24.0688 45.6512 201.4432 86.9008 33.7008 120.6016 80.8416 8.6616

2 125.6532 21.87674 26.95706 51.12934 225.6164 97.3289 37.7449 135.0738 90.54259 9.700992

3 140.7316 24.50194 30.1919 57.26487 252.6904 109.0084 42.27428 151.2826 101.4077 10.86511

4 157.6194 27.44218 33.81493 64.13665 283.0132 122.0894 47.3472 169.4366 113.5766 12.16892

5 176.5338 30.73524 37.87272 71.83305 316.9748 136.7401 53.02886 189.769 127.2058 13.6292

6 197.7178 34.42347 42.41745 80.45301 355.0117 153.1489 59.39232 212.5412 142.4705 15.2647

7 221.444 38.55428 47.50754 90.10737 397.6132 171.5268 66.5194 238.0462 159.567 17.09646

8 248.0172 43.1808 53.20845 100.9203 445.3267 192.11 74.50173 266.6117 178.715 19.14804

9 277.7793 48.36249 59.59346 113.0307 498.7659 215.1632 83.44194 298.6051 200.1608 21.4458

10 311.1128 54.16599 66.74468 126.5944 558.6179 240.9828 93.45497 334.4377 224.1801 24.0193

7 266.4542 46.39075 57.16383 108.4224 478.4312 206.3909 80.04 286.4309 192.0002 25.04351

8 306.4223 53.34936 65.7384 124.6858 550.1959 237.3496 92.046 329.3956 220.8003 28.80004

9 352.3857 61.35176 75.59916 143.3886 632.7252 272.952 105.8529 378.8049 253.9203 33.12004

10 405.2435 70.55453 86.93904 164.8969 727.634 313.8948 121.7308 435.6257 292.0084 38.08805


BASE 100.17 17.44 21.49 40.76 179.86 77.59 30.09 107.68 72.18

1 115.1955 20.056 24.7135 46.874 206.839 89.2285 34.6035 123.832 83.007 10.827

2 132.4748 23.0644 28.42053 53.9051 237.8649 102.6128 39.79403 142.4068 95.45805 12.45105


3 152.346 26.52406 32.6836 61.99087 273.5446 118.0047 45.76313 163.7678 109.7768 14.31871

4 175.198 30.50267 37.58614 71.28949 314.5763 135.7054 52.6276 188.333 126.2433 16.46651

5 201.4776 35.07807 43.22407 81.98292 361.7627 156.0612 60.52174 216.5829 145.1798 18.93649

6 231.6993 40.33978 49.70768 94.28036 416.0271 179.4704 69.6 249.0704 166.9567 21.77696

INDIA CEMENTS LTD. STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 % GROWTH AT 8% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC

BASE 213.82 240.59 43.62 1014.39 1512.42 387.05

1 224.511 252.6195 45.801 1065.11 1588.041 406.4025

2 235.7366 265.2505 48.09105 1118.365 1667.443 426.7226

3 247.5234 278.513 50.4956 1174.283 1750.815 448.0588

4 259.9 292.439 53.0204 1233 1838.36 470.462

5 272.895 307.061 55.6714 1294.65 1930.27 493.985

6 286.539 322.414 58.455 1359.38 2026.79 518.684

7 300.866 338.534 61.3777 1427.35 2128.13 544.618

8 315.9095 355.461 64.44661 1498.716 2234.533 571.8491

9 331.705 373.2341 67.66894 1573.652 2346.26 600.4416

10 348.2902 391.8958 71.05238 1652.334 2463.573 630.4637

387.05 1125.37

406.4025 1181.639 56.2685

426.7226 1240.72 59.08193

448.0588 1302.756 62.03602

470.462 1367.89 65.1378

493.985 1436.29 68.3947

518.684 1508.1 71.8144

544.618 1583.51 75.4052

571.8491 1662.684 79.17543

600.4416 1745.818 83.1342

630.4637 1833.109 87.29091

7 366.45 412.329 74.757 1738.49 2592.02 663.336 0 663.336 1928.69 142.866

8 395.7659 445.3153 80.73758 1877.565 2799.384 716.4025 0 716.4025 2082.981 154.2949

9 427.4272 480.9405 87.19658 2027.77 3023.335 773.7147 0 773.7147 2249.62 166.6385

10 461.6213 519.4158 94.17231 2189.992 3265.201 835.6119 0 835.6119 2429.589 179.9696


BASE 213.82 240.59 43.62 1014.39 1512.42 387.05 0 387.05 1125.37

1 230.9256 259.8372 47.1096 1095.541 1633.414 418.014 0 418.014 1215.4 90.0296

2 249.3996 280.6242 50.87837 1183.184 1764.087 451.4551 0 451.4551 1312.632 97.23197


3 269.3516 303.0741 54.94864 1277.839 1905.214 487.5715 0 487.5715 1417.642 105.0105

4 290.9 327.32 59.3445 1380.07 2057.63 526.577 0 526.577 1531.05 113.411

5 314.172 353.506 64.0921 1490.47 2222.24 568.703 0 568.703 1653.54 122.484

6 339.305 381.786 69.2195 1609.71 2400.02 614.2 0 614.2 1785.82 132.283


BASE 213.82 240.59 43.62 1014.39 1512.42 387.05 0 387.05 1125.37

1 239.4784 269.4608 48.8544 1136.117 1693.91 433.496 0 433.496 1260.414 135.0444

2 268.2158 301.7961 54.71693 1272.451 1897.18 485.5155 0 485.5155 1411.664 151.2497

3 300.4017 338.0116 61.28296 1425.145 2124.841 543.7774 0 543.7774 1581.064 169.3997

4 336.45 378.573 68.6369 1596.16 2379.82 609.031 0 609.031 1770.79 189.728

5 376.824 424.002 76.8733 1787.7 2665.4 682.114 0 682.114 1983.29 212.495

6 422.043 474.882 86.0981 2002.23 2985.25 763.968 0 763.968 2221.28 237.994

7 472.688 531.868 96.4299 2242.49 3343.48 855.644 0 855.644 2487.83 266.554

8 529.4104 595.692 108.0015 2511.592 3744.696 958.3215 0 958.3215 2786.375 298.5401

9 592.9397 667.175 120.9617 2812.983 4194.06 1073.32 0 1073.32 3120.74 334.365

10 664.0925 747.236 135.4771 3150.541 4697.347 1202.119 0 1202.119 3495.228 374.4888

7 568.765 639.974 116.03 2698.3 4023.07 1029.56 0 1029.56 2993.51 390.457

8 654.0803 735.9703 133.4346 3103.042 4626.527 1183.995 0 1183.995 3442.533 449.026

9 752.1923 846.3659 153.4498 3568.499 5320.506 1361.594 0 1361.594 3958.912 516.3799

10 865.0212 973.3207 176.4672 4103.773 6118.582 1565.833 0 1565.833 4552.749 593.8369


BASE 213.82 240.59 43.62 1014.39 1512.42 387.05 0 387.05 1125.37

1 245.893 276.6785 50.163 1166.549 1739.283 445.1075 0 445.1075 1294.176 168.8055


2 282.777 318.1803 57.68745 1341.531 2000.175 511.8736 0 511.8736 1488.302 194.1263

3 325.1935 365.9073 66.34057 1542.76 2300.202 588.6547 0 588.6547 1711.547 223.2453

4 373.973 420.793 76.2917 1774.17 2645.23 676.953 0 676.953 1968.28 256.732

5 430.068 483.912 87.7354 2040.3 3042.02 778.496 0 778.496 2263.52 295.242

6 494.579 556.499 100.896 2346.35 3498.32 895.27 0 895.27 2603.05 339.528

MADRAS CEMENTS LTD. STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 % GROWTH AT 5% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC

BASE 100.95 49.35 49.3 127.47 327.07 184.15 44.55 228.7 98.37

1 106 51.818 51.765 133.84 343.42 193.36 46.778 240.14 103.29 4.9185

2 111.3 54.408 54.353 140.54 360.59 203.03 49.116 252.14 108.45 5.1644

3 116.86 57.129 57.071 147.56 378.62 213.18 51.572 264.75 113.88 5.4226

4 122.71 59.985 59.924 154.94 397.56 223.84 54.151 277.99 119.57 5.6938

5 128.84 62.984 62.921 162.69 417.43 235.03 56.858 291.89 125.55 5.9785

6 135.28 66.134 66.067 170.82 438.31 246.78 59.701 306.48 131.83 6.2774

7 142.05 69.44 69.37 179.36 460.22 259.12 62.686 321.8 138.42 6.5913

8 149.15 72.912 72.839 188.33 483.23 272.07 65.821 337.89 145.34 6.9208

9 156.61 76.558 76.48 197.75 507.39 285.68 69.112 354.79 152.6 7.2669

10 164.44 80.386 80.305 207.64 532.76 299.96 72.567 372.53 160.23 7.6302

7 173.01 84.577 84.492 218.46 560.54 315.6 76.351 391.95 168.59 12.488

8 186.85 91.343 91.251 235.94 605.38 340.85 82.459 423.31 182.08 13.487

9 201.8 98.651 98.551 254.81 653.81 368.12 89.056 457.17 196.64 14.566

10 217.94 106.54 106.44 275.2 706.12 397.57 96.18 493.75 212.37 15.731


BASE 100.95 49.35 49.3 127.47 327.07 184.15 44.55 228.7 98.37

1 109.03 53.298 53.244 137.67 353.24 198.88 48.114 247 106.24 7.8696


2 117.75 57.562 57.504 148.68 381.49 214.79 51.963 266.76 114.74 8.4992

3 127.17 62.167 62.104 160.58 412.01 231.98 56.12 288.1 123.92 9.1791

4 137.34 67.14 67.072 173.42 444.98 250.53 60.61 311.14 133.83 9.9134

5 148.33 72.511 72.438 187.3 480.57 270.58 65.459 336.04 144.54 10.707

6 160.19 78.312 78.233 202.28 519.02 292.22 70.695 362.92 156.1 11.563

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 12 % GROWTH AT 12% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC GROWTH AT 15% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC

3 1 2 4 5 6 7 113.06 126.63 141.83 158.85 177.91 199.26 223.17 55.272 61.905 69.333 77.653 86.972 97.408 109.1 55.216 61.842 69.263 77.575 86.883 97.309 108.99 142.77 159.9 179.09 200.58 224.65 251.6 281.8 366.32 410.28 459.51 514.65 576.41 645.58 723.05 206.25 231 258.72 289.76 324.54 363.48 407.1 49.896 55.884 62.59 70.1 78.512 87.934 98.486 256.14 286.88 321.31 359.86 403.05 451.41 505.58 110.17 123.4 138.2 154.79 173.36 194.16 217.46 11.804 13.221 14.807 16.584 18.574 20.803 23.3 STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 15 % BASE 100.95 49.35 49.3 127.47 327.07 184.15 44.55 228.7 98.37

BASE 100.95 49.35 49.3 127.47 327.07 184.15 44.55 228.7 98.37

1 116.09 56.753 56.695 146.59 376.13 211.77 51.233 263.01 113.13 14.756


2 133.51 65.265 65.199 168.58 432.55 243.54 58.917 302.46 130.09 16.969

3 153.53 75.055 74.979 193.87 497.43 280.07 67.755 347.82 149.61 19.514

4 176.56 86.313 86.226 222.95 572.05 322.08 77.918 400 172.05 22.441

5 203.05 99.26 99.16 256.39 657.85 370.39 89.606 460 197.86 25.807

6 233.5 114.15 114.03 294.85 756.53 425.95 103.05 529 227.54 29.679

7 268.53 131.27 131.14 339.07 870.01 489.84 118.5 608.35 261.67 34.13

8 249.95 122.19 122.06 315.61 809.81 455.95 110.3 566.25 243.56 26.096

9 279.94 136.85 136.71 353.48 906.99 510.66 123.54 634.2 272.79 29.227

10 313.54 153.27 153.12 395.9 1015.8 571.94 138.37 710.31 305.52 32.735

8 308.81 150.96 150.81 389.93 1000.5 563.32 136.28 699.6 300.92 39.25

9 355.13 173.61 173.43 448.42 1150.6 647.82 156.72 804.54 346.05 45.137

10 408.4 199.65 199.45 515.69 1323.2 744.99 180.23 925.22 397.96 51.908

K.C.P.LTD. STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 % GROWTH AT 5% PARTICULARS INVENTORIES SUNDRY DEBTORS CASH AND BANK LOANS AND ADVANCES TOTAL CURRENT ASSETS CURRENT LIABILITIES PROVISIONS TOTAL CURRENT LIABILITIES WORKING CAPITAL CHANGE IN WC

BASE 51.2 14.06 17.07 56.72 139.05 46.9 22.17 69.07 69.98

1 53.76 14.76 17.92 59.56 146 49.25 23.28 72.52 73.48 3.499

2 56.448 15.501 18.82 62.534 163.52 51.707 24.442 76.15 77.153 3.674

3 59.27 16.28 19.76 65.66 183.1 54.29 25.66 79.96 81.01 3.858

4 62.234 17.09 20.749 68.944 205.12 57.007 26.948 83.955 85.061 4.0505

5 65.346 17.945 21.786 72.391 229.74 59.858 28.295 88.153 89.314 4.2531

6 68.613 18.842 22.875 76.01 257.31 62.85 29.71 92.56 93.78 4.4657

7 72.044 19.784 24.019 79.811 288.18 65.993 31.195 97.188 98.469 4.689

8 75.646 20.773 25.22 83.801 322.77 69.293 32.755 102.05 103.39 4.9234

9 79.428 21.812 26.481 87.991 361.5 72.757 34.393 107.15 108.56 5.1696

10 83.399 22.902 27.805 92.391 404.88 76.395 36.113 112.51 113.99 5.4281

8 94.768 26.024 31.595 104.98 257.37 86.809 41.035 127.84 129.53 9.5947

9 102.35 28.106 34.123 113.38 277.96 93.753 44.318 138.07 139.89 10.362

10 110.54 30.354 36.853 122.45 300.2 101.25 47.863 149.12 151.08 11.191


BASE 51.2 14.06 17.07 56.72 139.05 46.9 22.17 69.07 69.98

1 55.3 15.18 18.44 61.26 150.2 50.65 23.94 74.6 75.58 5.598


2 59.72 16.4 19.91 66.158 162.19 54.704 25.859 80.563 81.625 6.0463

3 64.5 17.71 21.5 71.45 175.2 59.08 27.93 87.01 88.15 6.53

4 69.657 19.128 23.224 77.167 189.18 63.807 30.162 93.969 95.207 7.0524

5 75.23 20.659 25.081 83.34 204.31 68.911 32.575 101.49 102.82 7.6166

6 81.248 22.311 27.088 90.008 220.65 74.424 35.181 109.61 111.05 8.2259

7 87.748 24.096 29.255 97.208 238.31 80.378 37.995 118.37 119.93 8.884


BASE 51.2 14.06 17.07 56.72 139.05 46.9 22.17 69.07 69.98

1 57.34 15.75 19.12 63.53 155.7 52.53 24.83 77.36 78.38 8.398

2 64.225 17.637 21.413 71.15 174.42 58.831 27.81 86.641 87.783 9.4053

3 71.93 19.75 23.98 79.69 195.4 65.89 31.15 97.04 98.32 10.53

4 80.564 22.124 26.86 89.25 218.8 73.798 34.885 108.68 110.11 11.798

5 90.232 24.779 30.083 99.96 245.05 82.654 39.071 121.72 123.33 13.214

6 101.06 27.752 33.693 111.96 274.46 92.572 43.76 136.33 138.13 14.799

7 113.19 31.082 37.736 125.39 307.4 103.68 49.011 152.69 154.7 16.575

8 126.77 34.812 42.265 140.44 344.28 116.12 54.892 171.01 173.27 18.564

9 141.98 38.989 47.336 157.29 385.6 130.06 61.479 191.54 194.06 20.792

10 159.02 43.668 53.017 176.16 431.87 145.66 68.857 214.52 217.35 23.287

8 156.62 43.01 52.218 173.51 425.36 143.47 67.819 211.29 214.07 27.922

9 180.12 49.461 60.05 199.53 489.16 164.99 77.991 242.98 246.18 32.111

10 207.13 56.881 69.058 229.46 562.53 189.74 89.69 279.43 283.11 36.927


BASE 51.2 14.06 17.07 56.72 139.05 46.9 22.17 69.07 69.98

1 58.88 16.17 19.63 65.23 159.9 53.94 25.5 79.43 80.48 10.5


2 67.712 18.594 22.575 75.012 183.89 62.025 29.32 91.345 92.549 12.072

3 77.87 21.38 25.96 86.26 211.5 71.33 33.72 105 106.4 13.88

4 89.549 24.591 29.856 99.204 243.2 82.028 38.775 120.8 122.4 15.965

5 102.98 28.28 34.334 114.08 279.68 94.333 44.592 138.92 140.75 18.359

6 118.43 32.522 39.484 131.2 321.63 108.48 51.281 159.76 161.87 21.113

7 136.19 37.4 45.407 150.88 369.88 124.75 58.973 183.73 186.15 24.28

ROCE


Mar-97 pbit 52.75

BIRLA CORPORATION Ltd. Mar-97 Mar-97 capital_employed pbit/capital_employed*100 559.57 9.426881355

Mar-98 pbit

Mar-98 capital_employed

-5.55

560.9

Mar-99

Mar-99

pbit

capital_employed 0.12

516.45

Mar-00

Mar-00

pbit


502.94

Mar-01 pbit


30.63

524.88

Mar-02 pbit


35.52

482.59

Mar-03

Mar-03

pbit


486.67

Mar-04

Mar-04

pbit


453.51

Mar-05

Mar-05

pbit


544.04

Mar-06 pbit


157.68 avg

646.5

Mar-98 pbit/capital_employed*100 -0.99 Mar-99 pbit/capital_employed*100 0.02 Mar-00 pbit/capital_employed*100 2.86 Mar-01 pbit/capital_employed*100 5.84 Mar-02 pbit/capital_employed*100 7.36 Mar-03 pbit/capital_employed*100 7.86 Mar-04 pbit/capital_employed*100 14.71 Mar-05 pbit/capital_employed*100 21.20 Mar-06 pbit/capital_employed*100 24.39

roce


9.27

Mar-97 pbit 109.12 Mar-98 pbit 115.33 Mar-99 pbit 114.21 Mar-00 pbit 105.51 Mar-01 pbit 123.18 Mar-02 pbit 119.91 Mar-03 pbit 91.06 Mar-04 pbit 105.3 Mar-05 pbit 97.01 Mar-06 pbit 151.57 avg

MADRAS Cements Ltd. Mar-97 Mar-97 capital_employed pbit/capital_employed*100 709.57 15.38 Mar-98 capital_employed 803.93

pbit/capital_employed*100

Mar-99 capital_employed 771.18




Mar-01 capital_employed 1131.43 Mar-02 capital_employed 1000.82

Mar-98 14.35 Mar-99 14.81 Mar-00 11.46 Mar-01 pbit/capital_employed*100 10.89 Mar-02 pbit/capital_employed*100 11.98








Mar-03 9.34 Mar-04 11.61 Mar-05 9.46 Mar-06 pbit/capital_employed*100

roce


15.22 12.45

K cements Ltd. Mar-97 pbit


68.16

44.21


Mar-98 pbit/capital_employed*100

13.45

194.35

6.92

Mar-99

Mar-99

Mar-99

pbit

capital_employed


16.21

199.76

8.11

Mar-00

Mar-00

Mar-00

pbit


pbit/capital_employed*100 195.19

Mar-01 pbit

2.92



18.42

171.18

10.76

Mar-02

Mar-02

Mar-02

pbit

capital_employed


20.39

157.51

12.94

Mar-03

Mar-03

Mar-03

pbit

capital_employed


4.35

152.57

2.85

Mar-04

Mar-04

Mar-04

pbit

capital_employed


7.19

149.38

4.81

Mar-05

Mar-05

Mar-05

pbit

capital_employed


19.51

146.02

13.36

Mar-06

Mar-06

Mar-06

pbit


avg


Mar-98 pbit

Mar-97


roce


17.24 12.412

CHETTINAD Cements Ltd. Mar-97 pbit 48.45 Mar-98 pbit 43.2 Mar-99 pbit 40.9 Mar-00 pbit 34.43 Mar-01 pbit 32.53 Mar-02 pbit 28.52 Mar-03 pbit 22.72 Mar-04 pbit 54.37 Mar-05 pbit 63.9 Mar-06 pbit 83.57 avg

Mar-97 capital_employed 269.52 Mar-98 capital_employed 317.65 Mar-99 capital_employed 314.54 Mar-00 capital_employed 303.66 Mar-01 capital_employed 440.86 Mar-02 capital_employed 464.36 Mar-03 capital_employed 442.24 Mar-04 capital_employed 422 Mar-05 capital_employed 474.14 Mar-06 capital_employed 479.33 roce


Mar-97 pbit/capital_employed*100 17.98 Mar-98 pbit/capital_employed*100 13.60 Mar-99 pbit/capital_employed*100 13.00 Mar-00 pbit/capital_employed*100 11.34 Mar-01 pbit/capital_employed*100 7.38 Mar-02 pbit/capital_employed*100 6.14 Mar-03 pbit/capital_employed*100 5.14 Mar-04 pbit/capital_employed*100 12.88 Mar-05 pbit/capital_employed*100 13.48 Mar-06 pbit/capital_employed*100 17.43 11.84

India cements Ltd. Mar-97 pbit


131

12.75



147.65

1514.22

9.75

Mar-99

Mar-99

Mar-99

pbit

capital_employed


238.88

2079

11.5

Mar-00

Mar-00

Mar-00

pbit

capital_employed


217.72

2411.9

9.02

Mar-01

Mar-01

Mar-01

pbit

capital_employed


241.35

2615.06

9.23

Mar-02

Mar-02

Mar-02

pbit



Mar-03 pbit

8.2



-48.69

2197.17

-2.22

Mar-04

Mar-04

Mar-04

pbit

capital_employed


48.95

2432.16

2.01

Mar-05

Mar-05

Mar-05

pbit

capital_employed


138.08

2350.25

5.86

Mar-06

Mar-06

Mar-06

pbit


avg


Mar-98 pbit

Mar-97


roce


8.25 7.435

Expenses Percentage



BIRLA CORPORATION LTD. Year Net Sales Total Expenditure exp as % of sales

Mar 06(12) 1,216.50 1,026.30 84.36498

Mar 05(12) 1,131.04 1,005.72 88.91993

Mar Mar Mar 04(12) 03(12) 02(12) 973 944.51 959.25 913.67 895.62 909.95 93.90236 94.82377 94.86057 CHETTINAD CEMENTS LTD.

Mar 01(12) 868.46 825.46 95.04871

Mar 00(12) 853.87 833.53 97.6179

Mar 99(12) 744.66 738.72 99.20232

Mar 98(12) 828.32 819.98 98.99314

Mar 97(12 901.47 856.73 95.037

Year Net Sales Total Expenditure exp as % of sales

Mar 06(12) 485.49 423.4 87.21086

Mar 05(12) 427.77 360.62 84.30231

Mar Mar Mar 04(12) 03(12) 02(12) 324.77 266.19 201.81 244.59 223.29 165.41 75.31176 83.88369 81.96323 MADRAS CEMENTS LTD.

Mar 01(12) 185.1 139.7 75.47272

Mar 00(12) 199.28 138.66 69.58049

Mar 99(12) 196 138.15 70.48469

Mar 98(12) 211.65 147.47 69.67635

Mar 97(12 207.03 147.66 71.323

Year Net sales Total expenditure exp as % of sales

Mar 06(12) 1,009.10 795.72 78.85442

Mar 05(12) 738.98 597.28 80.82492

Mar Mar 04(12) 03(12) 695.32 626.14 521.42 476.17 74.98993 76.04849 K.C.P.LTD

Mar 02(12) 706.3 528.38 74.80957

Mar 01(12) 618.34 449.1 72.62994

Mar 00(12) 513.65 379.23 73.83043

Mar 99(12) 521.03 350.77 67.32242

Mar 98(12) 487.32 348.72 71.55873

Mar 97(12 415.24 282.07 67.92939

Year Net Sales Total Expenditure exp as % of sales

Mar 06(12) 165.58 145.84 88.07827

Mar 05(12) 136.73 122.01 89.23426

Mar 02(12) 113.02 99.6 88.126

Mar 01(12) 115.47 96.89 83.90924

Mar 00(12) 108.38 109.89 101.3932

Mar 99(12) 160.31 140.18 87.44308

Mar 98(12) 124.93 116.42 93.18819

Mar 97(12 137.84 125.84 91.29425

Mar 04(12) 117.43 109.41 93.1704

Mar 03(12) 114.39 105.38 92.12344


Average

94.28

Average

76.92

Average

73.88

Average

90.80

INDIA CEMENTS LTD. Year Net Sales Total Expenditure exp as % of sales

Mar 06(12) 1,541.75 1,258.55 81.63126

Mar 05(12) 1,162.14 1,031.87 88.79051

Mar 04(12) 1,016.90 915.06 89.98525

Mar 03(12) 851.58 801.55 94.12504

Avg of four companies CHETTINAD 76.92 BIRLA CEMNTS 94.28 K 90.8 MADRAS 73.88 INDIA CEMENTS 83.22 cogs% 82.63


Mar 02(12) 1,019.11 847.96 83.20593

Mar 01(12) 1,256.95 945.36 75.21063

Mar 00(12) 1,194.85 955.5 79.9682

Mar 99(12) 1,156.67 890.81 77.01505

Mar 98(12) 771.01 623.68 80.8913

Mar 97(12 728.36 592.61 81.36224

Average

83.22


EBIT



Birla corp ltd.

PROJECTION OF SALES AND COST OF GOODS SOLD FOR TEN YEARS growth at 5% cogs at 82% particulars base 2006 1,216.50 sales 1,026.30 cogs ebit 190.2 growth at 8% cogs at 82% particulars base 2006 1,216.50 sales 1,026.30 cogs ebit 190.2 growth at 12% cogs at 82% particulars base 2006 1,216.50 sales 1,026.30 cogs ebit 190.2 growth at 15% cogs at 82% particulars base 2006 1,216.50 sales 1,026.30 cogs ebit 190.2

1 1277.33 1047.41 229.92

2 1341.19 1099.78 241.41

3 1408.25 1154.77 253.49

4 1478.66 1212.50 266.16

5 1552.60 1273.13 279.47

6 1630.23 1336.79 293.44

7 1711.74 1403.62 308.11

8 1797.32 1473.81 323.52

9 1887.19 1547.50 339.69

10 1981.55 1624.87 356.68

1 1313.82 1077.33 236.49

2 1418.93 1163.52 255.41

3 1532.44 1256.60 275.84

4 1655.03 1357.13 297.91

5 1787.44 1465.70 321.74

6 1930.43 1582.95 347.48

7 2084.87 1709.59 375.28

8 2251.66 1846.36 405.30

9 2431.79 1994.07 437.72

10 2626.33 2153.59 472.74

1 1362.48 1117.23 245.25

2 1525.98 1251.30 274.68

3 1709.09 1401.46 307.64

4 1914.19 1569.63 344.55

5 2143.89 1757.99 385.90

6 2401.16 1968.95 432.21

7 2689.29 2205.22 484.07

8 3012.01 2469.85 542.16

9 3373.45 2766.23 607.22

10 3778.26 3098.18 680.09

1 1398.98 1147.16 251.82

2 1608.82 1319.23 289.59

3 1850.14 1517.12 333.03

4 2127.67 1744.69 382.98

5 2446.82 2006.39 440.43

6 2813.84 2307.35 506.49

7 3235.91 2653.45 582.46

8 3721.30 3051.47 669.83

9 4279.50 3509.19 770.31

10 4921.42 4035.57 885.86


Chettinad Cements ltd. growth at 5% cogs at 82% particulars base 2006 485.49 sales 423.4 cogs ebit 62.09 growth at 8% cogs at 82% particulars base 2006 485.49 sales 423.4 cogs ebit 62.09 growth at 12% cogs at 82% particulars base 2006 485.49 sales 423.4 cogs ebit 62.09 growth at 15% cogs at 82% particulars base 2006 485.49 sales 423.4 cogs ebit 62.09

1 509.76 418.01 91.76

2 535.25 438.91 96.35

3 562.02 460.85 101.16

4 590.12 483.90 106.22

5 619.62 508.09 111.53

6 650.60 533.49 117.11

7 683.13 560.17 122.96

8 717.29 588.18 129.11

9 753.15 617.59 135.57

10 790.81 648.47 142.35

1 485.49 398.10 87.39

2 485.49 398.10 87.39

3 485.49 398.10 87.39

4 485.49 398.10 87.39

5 485.49 398.10 87.39

6 485.49 398.10 87.39

7 485.49 398.10 87.39

8 485.49 398.10 87.39

9 485.49 398.10 87.39

10 485.49 398.10 87.39

1 543.75 445.87 97.87

2 609.00 499.38 109.62

3 682.08 559.30 122.77

4 763.93 626.42 137.51

5 855.60 701.59 154.01

6 958.27 785.78 172.49

7 1073.26 880.08 193.19

8 1202.06 985.69 216.37

9 1346.30 1103.97 242.33

10 1507.86 1236.44 271.41

1 558.31 457.82 100.50

2 642.06 526.49 115.57

3 738.37 605.46 132.91

4 849.13 696.28 152.84

5 976.49 800.72 175.77

6 1122.97 920.83 202.13

7 1291.41 1058.96 232.45

8 1485.13 1217.80 267.32

9 1707.89 1400.47 307.42

10 1964.08 1610.54 353.53


India cements Ltd

PROJECTION OF SALES AND COST OF GOODS SOLD FOR TEN YEARS growth at 5% cogs at 82% particulars base 2006 1,541.75 sales 1,258.55 cogs ebit 283.2 growth at 8% cogs at 82% particulars base 2006 1,541.75 sales 1,258.55 cogs ebit 283.2 growth at 12% cogs at 82% particulars base 2006 1,541.75 sales 1,258.55 cogs ebit 283.2 growth at 15% cogs at 82% particulars base 2006 1,541.75 sales 1,258.55 cogs ebit 283.2

1 1618.84 1327.45 291.39

2 1699.78 1393.82 305.96

3 1784.77 1463.51 321.26

4 1874.01 1536.69 337.32

5 1967.71 1613.52 354.19

6 2066.09 1694.20 371.90

7 2169.40 1778.91 390.49

8 2277.87 1867.85 410.02

9 2391.76 1961.24 430.52

10 2511.35 2059.31 452.04

1 1665.09 1365.37 299.72

2 1798.30 1474.60 323.69

3 1942.16 1592.57 349.59

4 2097.53 1719.98 377.56

5 2265.34 1857.58 407.76

6 2446.56 2006.18 440.38

7 2642.29 2166.68 475.61

8 2853.67 2340.01 513.66

9 3081.97 2527.21 554.75

10 3328.52 2729.39 599.13

1 1726.76 1415.94 310.82

2 1933.97 1585.86 348.11

3 2166.05 1776.16 389.89

4 2425.97 1989.30 436.68

5 2717.09 2228.01 489.08

6 3043.14 2495.38 547.77

7 3408.32 2794.82 613.50

8 3817.32 3130.20 687.12

9 4275.39 3505.82 769.57

10 4788.44 3926.52 861.92

1 1773.01 1453.87 319.14

2 2038.96 1671.95 367.01

3 2344.81 1922.74 422.07

4 2696.53 2211.15 485.38

5 3101.01 2542.83 558.18

6 3566.16 2924.25 641.91

7 4101.09 3362.89 738.20

8 4716.25 3867.32 848.92

9 5423.69 4447.42 976.26

10 6237.24 5114.54 1122.70


Madras cements ltd.

PROJECTION OF SALES AND COST OF GOODS SOLD FOR TEN YEARS growth at 5% cogs at 82% particulars base 2006 1,009.10 sales 795.72 cogs ebit 213.38 growth at 8% cogs at 82% particulars base 2006 1,009.10 sales 795.72 cogs ebit 213.38 growth at 12% cogs at 82% particulars base 2006 1,009.10 sales 795.72 cogs ebit 213.38 growth at 15% cogs at 82% particulars base 2006 1,009.10 sales 795.72 cogs ebit 213.38

1 1059.56 868.84 190.72

2 1112.53 912.28 200.26

3 1168.16 957.89 210.27

4 1226.57 1005.79 220.78

5 1287.90 1056.07 231.82

6 1352.29 1108.88 243.41

7 1419.91 1164.32 255.58

8 1490.90 1222.54 268.36

9 1565.45 1283.67 281.78

10 1643.72 1347.85 295.87

1 1089.83 893.66 196.17

2 1177.01 965.15 211.86

3 1271.18 1042.36 228.81

4 1372.87 1125.75 247.12

5 1482.70 1215.81 266.89

6 1601.31 1313.08 288.24

7 1729.42 1418.12 311.30

8 1867.77 1531.57 336.20

9 2017.20 1654.10 363.10

10 2178.57 1786.43 392.14

1 1130.19 926.76 203.43

2 1265.82 1037.97 227.85

3 1417.71 1162.52 255.19

4 1587.84 1302.03 285.81

5 1778.38 1458.27 320.11

6 1991.78 1633.26 358.52

7 2230.80 1829.25 401.54

8 2498.49 2048.77 449.73

9 2798.31 2294.62 503.70

10 3134.11 2569.97 564.14

1 1160.47 951.58 208.88

2 1334.53 1094.32 240.22

3 1534.71 1258.47 276.25

4 1764.92 1447.24 317.69

5 2029.66 1664.32 365.34

6 2334.11 1913.97 420.14

7 2684.23 2201.07 483.16

8 3086.86 2531.23 555.63

9 3549.89 2910.91 638.98

10 4082.37 3347.55 734.83


K.C.P.ltd

PROJECTION OF SALES AND COST OF GOODS SOLD FOR TEN YEARS growth at 5% cogs at 82% particulars base 2006 165.58 sales 145.84 cogs ebit 19.74 growth at 8% cogs at 82% particulars base 2006 165.58 sales 145.84 cogs ebit 19.74 growth at 12% cogs at 82% particulars base 2006 165.58 sales 145.84 cogs ebit 19.74 growth at 15% cogs at 82% particulars base 2006 165.58 sales 145.84 cogs ebit 19.74

1 173.86 142.56 31.29

2 182.55 149.69 32.86

3 191.68 157.18 34.50

4 201.26 165.04 36.23

5 211.33 173.29 38.04

6 221.89 181.95 39.94

7 232.99 191.05 41.94

8 244.64 200.60 44.03

9 256.87 210.63 46.24

10 269.71 221.16 48.55

1 178.83 146.64 32.19

2 191.34 156.90 34.44

3 204.74 167.89 36.85

4 219.07 179.64 39.43

5 234.40 192.21 42.19

6 250.81 205.67 45.15

7 268.37 220.06 48.31

8 287.16 235.47 51.69

9 307.26 251.95 55.31

10 328.77 269.59 59.18

1 185.45 152.07 33.38

2 207.70 170.32 37.39

3 232.63 190.75 41.87

4 260.54 213.65 46.90

5 291.81 239.28 52.53

6 326.83 268.00 58.83

7 366.04 300.16 65.89

8 409.97 336.18 73.79

9 459.17 376.52 82.65

10 514.27 421.70 92.57

1 190.42 156.14 34.28

2 218.98 179.56 39.42

3 251.83 206.50 45.33

4 289.60 237.47 52.13

5 333.04 273.09 59.95

6 383.00 314.06 68.94

7 440.45 361.17 79.28

8 506.51 415.34 91.17

9 582.49 477.64 104.85

10 669.86 549.29 120.58



FCFF



FCFF OF BIRLA CEMENTS

PARTICULARS SALES COGS EBIT TAX EBIT(1-T) LESS:-NET CAPEX LESS:-CHANGE IN WC FCFF

BASE(06) 1,216.50 1,026.30 190.2 30% 133.14

133.14

1 1277.33 1077.62 199.71 30% 139.80 500.23 0.486 -360.92

2 1341.19 1131.50 209.6955 30% 146.79 525.24 0.5103 -378.96

GROWTH AT 5% 3 4 5 1408.25 1478.66 1552.60 1188.07 1247.47 1309.85 220.18028 231.1893 242.7488 30% 30% 30% 154.13 161.83 169.92 551.50 579.08 608.03 0.535815 0.562606 0.590736 -397.91 -417.81 -438.70

terminal value 6 1630.23 1375.34 254.8862 30% 178.42 638.43 0.620273 -460.63

7 1711.74 1444.11 267.6305 30% 187.34 670.36 0.651286 -483.67

8 1797.32 1516.31 281.012 30% 196.71 703.87 0.683851 -507.85

9 1887.19 1592.13 295.0626 30% 206.54 739.07 0.718043 -533.24

value of firm value of debt value of equity value of equity per share=6078.76*10000000)/77005347


10 1981.55 1671.73 309.8158 30% 216.87 0.00 0 216.87

216.87

17776.31 6350.54 271.78 6078.76 789.39453


BASE(06) 1,216.50 1,026.30 190.2 30% 133.14

133.14

1 1313.82 1108.40 205.42 30% 143.79 500.23

2 1418.93 1197.08 221.849 30% 155.29 540.25

GROWTH AT 8% 3 4 5 1532.44 1655.03 1787.44 1292.84 1396.27 1507.97 239.5972 258.765 279.466 30% 30% 30% 167.72 181.14 195.63 583.47 630.15 680.56

0.7776

0.83981

0.906993

0.97955

-357.22

-385.79

-416.66

-449.99

terminal value 6 1930.43 1628.61 301.8235 30% 211.28 735.00

7 2084.87 1758.90 325.969 30% 228.18 793.80

8 2251.66 1899.61 352.047 30% 246.43 857.31

9 2431.79 2051.58 380.211 30% 266.15 925.89

10 2626.33 2215.70 410.6275 30% 287.44 0.00

1.05792

1.14255

1.23395

1.33267

1.43928

0

-485.99

-524.87

-566.86

-612.21

-661.18

287.44

Value of firm value of debt value of equity value of equity per share=(11667.17*10000000)/77005347


287.44

16148.27 11395.39 271.78 11667.17 1515.112

GROWTH AT 12% PARTICULARS SALES COGS EBIT TAX EBIT(1-T) LESS:-NET CAPEX LESS:-CHANGE IN WC FCFF

terminal value BASE(06) 1,216.50 1,026.30 190.2 30% 133.14

133.14

1 1362.48 1149.46 213.024 30% 149.12 500.23 1.1664 -352.28

2 1525.98 1287.39 238.5869 30% 167.01 560.26 1.306368 -394.55

3 1709.09 1441.88 267.21731 30% 187.05 627.49 1.4631322 -441.90

4 1914.19 1614.90 299.2834 30% 209.50 702.79 1.638708 -494.93

5 2143.89 1808.69 335.1974 30% 234.64 787.12 1.835353 -554.32

6 2401.16 2025.73 375.4211 30% 262.79 881.58 2.055595 -620.84

7 2689.29 2268.82 420.4716 30% 294.33 987.37 2.302267 -695.34

8 3012.01 2541.08 470.9282 30% 329.65 1105.85 2.578539 -778.78

9 3373.45 2846.01 527.4396 30% 369.21 1238.55 2.887963 -872.23

value of firm value of debt value of equity value of equity per share=(7453.51*10000000)/77005347


10 3778.26 3187.53 590.7323 30% 413.51 0.00 0 413.51

413.51

-7154.15 -7181.73 271.78 -7453.51 967.9211


BASE(06) 1,216.50 1,026.30 190.2 30% 133.14

133.14

1 1398.98 1180.25 218.73 30% 153.11 500.23 1.458 -348.58

2 1608.82 1357.28 251.5395 30% 176.08 575.26 1.6767 -400.86

GROWTH AT 15% 3 4 5 1850.14 2127.67 2446.82 1560.87 1795.01 2064.26 289.27043 332.661 382.5601 30% 30% 30% 202.49 232.86 267.79 661.55 760.79 874.91 1.928205 2.217436 2.550051 -460.99 -530.14 -609.66

terminal value 6 2813.84 2373.89 439.9442 30% 307.96 1006.14 2.932559 -701.11

7 3235.91 2729.98 505.9358 30% 354.16 1157.06 3.372443 -806.28

8 9 3721.30 4279.50 3139.48 3610.40 581.8261 669.1001 30% 30% 407.28 468.37 1330.62 1530.22 3.878309 4.460055 -927.22 -1066.31 value of firm

value of debt value of equity value of equity per share=(7279.76*10000000)/77005347


10 4921.42 4151.96 769.4651 30% 538.63 0.00 0 538.63

538.63

-6134.74 -7007.98 271.78 -7279.76 945.3577

CHETTINAD CEMENTS Ltd.


BASE(2006) 485.49 423.4 62.09 30% 43.46

43.46

1 509.76 444.57 65.1945 30% 45.64 479.48 3.609 -437.45

2 535.25 466.80 68.45423 30% 47.92 503.45 3.78945 -459.33

GROWTH AT 5% 3 4 5 562.02 590.12 619.62 490.14 514.65 540.38 71.87694 75.47078 79.24432 30% 30% 30% 50.31 52.83 55.47 528.63 555.06 582.81 3.978923 4.177869 4.386762 -482.29 -506.41 -531.73

terminal value 6 650.60 567.40 83.20654 30% 58.24 611.95 4.6061 -558.31

7 683.13 595.77 87.36687 30% 61.16 642.55 4.836405 -586.23

8 717.29 625.55 91.73521 30% 64.21 674.68 5.078225 -615.54

9 753.15 656.83 96.32197 30% 67.43 708.41 5.332137 -646.32



10 790.81 689.67 101.1381 30% 70.80 0.00 0 70.80

2178.36 -2286.66 304.91 -2591.57 86.71693214


BASE(2006) 485.49 423.4 62.09 30% 43.46

43.46

1 524.33 457.27 67.0572 30% 46.94 479.48 5.7744 -438.31

2 566.28 493.85 72.42178 30% 50.70 517.84 6.236352 -473.38

GROWTH AT 8% 3 4 5 611.58 660.50 713.34 533.36 576.03 622.11 78.21552 84.47276 91.23058 30% 30% 30% 54.75 59.13 63.86 559.27 604.01 652.33 6.73526 7.274081 7.856007 -511.25 -552.15 -596.32

terminal value 6 770.41 671.88 98.52903 30% 68.97 704.51 8.484488 -644.03

7 832.04 725.63 106.4113 30% 74.49 760.87 9.163247 -695.55

8 898.61 783.68 114.9243 30% 80.45 821.74 9.896307 -751.19

9 970.50 846.38 124.1182 30% 86.88 887.48 10.68801 -811.29



10 1048.14 914.09 134.0477 30% 93.83 0.00 0 93.83

287.44

37533.34 12124.93 304.91 11820.02 400.6331484


BASE(2006) 485.49 423.4 62.09 30% 43.46

43.46

1 543.75 474.21 69.5408 30% 48.68 479.48 8.6616 -439.46

2 609.00 531.11 77.8857 30% 54.52 537.02 9.700992 -492.20

GROWTH AT 12% 3 4 5 682.08 763.93 855.60 594.85 666.23 746.18 87.23198 97.69982 109.4238 30% 30% 30% 61.06 68.39 76.60 601.46 673.63 754.47 10.86511 12.16892 13.6292 -551.26 -617.41 -691.50

terminal value 6 958.27 835.72 122.5547 30% 85.79 845.01 15.2647 -774.48

7 1073.26 936.00 137.2612 30% 96.08 946.41 17.09646 -867.42

8 1202.06 1048.32 153.7326 30% 107.61 1059.98 19.14804 -971.51

9 1346.30 1174.12 172.1805 30% 120.53 1187.17 21.4458 -1088.09



10 1507.86 1315.02 192.8421 30% 134.99 0.00 0 413.51

413.51

10337.75 306.35 304.91 1.44 4.880801672


BASE(2006) 485.49 423.4 62.09 30% 43.46

43.46

1 558.31 486.91 71.4035 30% 49.98 479.48

2 642.06 559.95 82.11403 30% 57.48 551.40

GROWTH AT 15% 3 4 5 738.37 849.13 976.49 643.94 740.53 851.61 94.43113 108.5958 124.8852 30% 30% 30% 66.10 76.02 87.42 634.11 729.23 838.61

10.827 -440.32

12.45105 -506.37

14.31871 -582.33

16.46651 -669.68

18.93649 -770.13

terminal value 6 1122.97 979.35 143.6179 30% 100.53 964.41

7 1291.41 1126.25 165.1606 30% 115.61 1109.07

8 1485.13 1295.19 189.9347 30% 132.95 1275.43

9 1707.89 1489.47 218.4249 30% 152.90 1466.74

10 1964.08 1712.89 251.1887 30% 175.83 0.00

21.77696 -885.65

25.04351 -1018.50

28.80004 -1171.27

33.12004 -1346.96

0 538.63



538.63

13465.75 1153.89 304.91 848.98 287.757153

INDIA CEMENTS LTD.


BASE(2006) 1,541.75 1,258.55 283.2 30% 198.24

198.24

1 1618.84 1321.48 297.36 30% 208.15 104.20 56.2685 47.68

2 1699.78 1387.55 312.228 30% 218.56 109.41 59.08193 50.07

GROWTH AT 5% 3 4 1784.77 1874.01 1456.93 1529.78 327.8394 344.2314 30% 30% 229.49 240.96 114.88 120.62 62.03602 65.13782 52.57 55.20

terminal value 5 1967.71 1606.26 361.4429 30% 253.01 126.66 68.39471 57.96

6 2066.09 1686.58 379.5151 30% 265.66 132.99 71.81445 60.86

7 2169.40 1770.91 398.4908 30% 278.94 139.64 75.40517 63.90

8 2277.87 1859.45 418.4154 30% 292.89 146.62 79.17543 67.10

9 2391.76 1952.42 439.3362 30% 307.54 153.95 83.1342 70.45



10 2511.35 2050.05 461.303 30% 322.91 0.00 0 322.61

322.61

8105.78 3625.04 368.94 3256.10 147.75


BASE(2006) 1,541.75 1,258.55 283.2 30% 198.24

198.24

1 1665.09 1365.37 299.7162 30% 209.80 166.72 90.0296 -46.95

2 1798.30 1474.60 323.6935 30% 226.59 180.06 97.23197 -50.70

GROWTH AT 8% 3 4 5 1942.16 2097.53 2265.34 1592.57 1719.98 1857.58 349.589 377.5561 407.7606 30% 30% 30% 244.71 264.29 285.43 194.46 210.02 226.82 105.0105 113.4114 122.4843 -54.76 -59.14 -63.87

terminal value 6 2446.56 2006.18 440.3814 30% 308.27 244.97 132.283 -68.98

7 2642.29 2166.68 475.6119 30% 332.93 264.56 142.8657 -74.50

8 2853.67 2340.01 513.6609 30% 359.56 285.73 154.2949 -80.46

9 3081.97 2527.21 554.7538 30% 388.33 308.59 166.6385 -86.90



10 3328.52 2729.39 599.1341 30% 419.39 0.00 0 419.39

385.71

42795.29 16421.52 368.94 16052.58 728.43


BASE(2006) 1,541.75 1,258.55 283.2 30% 198.24

198.24

1 1726.76 1409.58 317.184 30% 222.03 250.08 135.0444 -163.09

2 1933.97 1578.73 355.2461 30% 248.67 280.09 151.2497 -182.67

GROWTH AT 12% 3 4 5 2166.05 2425.97 2717.09 1768.17 1980.35 2218.00 397.8756 445.6207 499.0952 30% 30% 30% 278.51 311.93 349.37 313.70 351.34 393.50 169.3997 189.7277 212.495 -204.59 -229.14 -256.63

terminal value 6 3043.14 2484.15 558.9866 30% 391.29 440.72 237.9944 -287.43

7 3408.32 2782.25 626.065 30% 438.25 493.61 266.5537 -321.92

8 3817.32 3116.12 701.1928 30% 490.83 552.84 298.5401 -360.55

9 4275.39 3490.06 785.3359 30% 549.74 619.19 334.365 -403.82

10 4489.16 3908.87 580.2986 30% 406.21 0.00 0 406.21



406.21

-13450.66 -6557.47 368.94 -6926.41 -314.30

MADRAS CEMENTS


BASE(2006) 1,009.10 795.72 213.38 30% 149.37

149.37

1 1059.56 868.84 190.7199 30% 133.50 989.89 4.9185 -861.30

2 1112.53 912.28 200.2559 30% 140.18 1039.38 5.164425 -904.37

GROWTH AT 5% 3 4 5 1168.16 1226.57 1287.90 957.89 1005.79 1056.07 210.2687 220.7821 231.8212 30% 30% 30% 147.19 154.55 162.27 1091.35 1145.92 1203.22 5.422646 5.693779 5.978467 -949.59 -997.07 -1046.92

terminal value 6 1352.29 1108.88 243.4123 30% 170.39 1263.38 6.277391 -1099.27

7 1419.91 1164.32 255.5829 30% 178.91 1326.55 6.59126 -1154.23

8 1490.90 1222.54 268.3621 30% 187.85 1392.87 6.920823 -1211.94

9 1565.45 1283.67 281.7802 30% 197.25 1462.52 7.266865 -1272.54



10 1643.72 1347.85 295.8692 30% 207.11 0.00 0 207.11

6680.92 -3469.72 602.44 -4072.16 -3371.59


BASE(2006) 1,009.10 795.72 213.38 30% 149.37

149.37

1 1089.83 893.66 196.169 30% 137.32 989.89 7.8696 -860.44

2 1177.01 965.15 211.8626 30% 148.30 1069.08 8.499168 -929.28

GROWTH AT 8% 3 4 5 1271.18 1372.87 1482.70 1042.36 1125.75 1215.81 228.8116 247.1165 266.8858 30% 30% 30% 160.17 172.98 186.82 1154.61 1246.98 1346.73 9.179101 9.91343 10.7065 -1003.62 -1083.91 -1170.62

terminal value 6 1601.31 1313.08 288.2367 30% 201.77 1454.47 11.56302 -1264.27

7 1729.42 1418.12 311.2956 30% 217.91 1570.83 12.48807 -1365.41

8 1867.77 1531.57 336.1993 30% 235.34 1696.50 13.48711 -1474.65

9 2017.20 1654.10 363.0952 30% 254.17 1832.22 14.56608 -1592.62



10 2178.57 1786.43 392.1428 30% 274.50 0.00 0 274.50

274499.97 109524.60 602.44 108922.16 90183.40


BASE(2006) 1,009.10 795.72 213.38 30% 149.37

149.37

1 1130.19 926.76 203.4346 30% 142.40 989.89 11.8044 -859.29

2 1265.82 1037.97 227.8467 30% 159.49 1108.68 13.22093 -962.41

GROWTH AT 12% 3 4 1417.71 1587.84 1162.52 1302.03 255.1883 285.8109 30% 30% 178.63 200.07 1241.72 1390.72 14.80744 16.58433 -1077.89 -1207.24

terminal value 5 1778.38 1458.27 320.1082 30% 224.08 1557.61 18.57445 -1352.11

6 1991.78 1633.26 358.5212 30% 250.96 1744.52 20.80339 -1514.36

7 2230.80 1829.25 401.5437 30% 281.08 1953.87 23.29979 -1696.09

8 2498.49 2048.77 449.729 30% 314.81 2188.33 26.09577 -1899.62

9 2798.31 2294.62 503.6965 30% 352.59 2450.93 29.22726 -2127.57



10 3134.11 2569.97 564.1401 30% 394.90 0.00 0 394.90

-10125.59 -12395.81 602.44 -12998.25 -10762.06


BASE(2006) 1,009.10 795.72 213.38 30% 149.37

149.37

1 1160.47 951.58 208.8837 30% 146.22 989.89 14.7555 -858.43

2 1334.53 1094.32 240.2163 30% 168.15 1138.37 16.96883 -987.19

GROWTH AT 15% 3 4 5 1534.71 1764.92 2029.66 1258.47 1447.24 1664.32 276.2487 317.686 365.3389 30% 30% 30% 193.37 222.38 255.74 1309.13 1505.50 1731.32 19.51415 22.44127 25.80746 -1135.27 -1305.56 -1501.39

terminal value 6 2334.11 1913.97 420.1397 30% 294.10 1991.02 29.67858 -1726.60

7 2684.23 2201.07 483.1607 30% 338.21 2289.68 34.13037 -1985.59

8 3086.86 2531.23 555.6348 30% 388.94 2633.13 39.24992 -2283.43

9 3549.89 2910.91 638.98 30% 447.29 3028.10 45.13741 -2625.95



10 4082.37 3347.55 734.827 30% 514.38 0.00 0 514.38

-7454.77 -12199.99 602.44 -12802.43 -10599.92


BASE(2006) 165.58 145.84 19.74 30% 13.82

13.82

1 173.86 142.56 31.29 30% 21.91 68.98 3.499 -50.57

2 182.55 149.69 32.86 30% 23.00 72.43 3.674 -53.10

GROWTH AT 5% 3 4 5 191.68 201.26 211.33 157.18 165.04 173.29 34.502 36.227 38.039 30% 30% 30% 24.15 25.36 26.63 78.22 84.48 91.24 3.8576 4.0505 4.2531 -57.93 -63.17 -68.87

terminal value 6 221.89 181.95 39.941 30% 27.96 98.54 4.4657 -75.05

7 232.99 191.05 41.9378 30% 29.36 106.42 4.68899 -81.75

8 244.64 200.60 44.0347 30% 30.82 114.94 4.92344 -89.03

9 256.87 210.63 46.236 30% 32.37 124.13 5.1696 -96.93

10 269.71 221.16 48.54822701 30% 33.98 0.00 0 33.98



699.25 -126.87 60.71 -187.58 -145.50


BASE(2006) 165.58 145.84 19.74 30% 13.82

13.82

1 178.83 146.64 32.19 30% 22.53 68.98 5.598 -52.05

2 193.13 158.37 34.76 30% 24.33 74.50 6.046 -56.21

GROWTH AT 8% 3 4 5 208.58 225.27 243.29 171.04 184.72 199.50 37.545 40.549 43.792 30% 30% 30% 26.28 28.38 30.65 80.46 86.89 93.85 6.53 7.0524 7.6166 -60.71 -65.56 -70.81

terminal value 6 262.75 215.46 47.296 30% 33.11 101.35 8.2259 -76.47

7 283.78 232.70 51.0795 30% 35.76 109.46 8.88396 -82.59

8 306.48 251.31 55.1659 30% 38.62 118.22 9.59467 -89.20

9 331.00 271.42 59.579 30% 41.71 127.68 10.362 -96.33

10 357.47 293.13 64.34546419 30% 45.04 o 0 45.04

value of firm value of debt value of equity value of equity per share=(419*10000000)/12892116


-4991.91 479.71 60.71 419.00 325.00


BASE(2006) 165.58 145.84 19.74 30% 13.82

1 185.45 152.07 33.38 30% 23.37 68.98 8.398

2 207.70 170.32 37.39 30% 26.17 77.26 9.405

GROWTH AT 12% 3 4 5 232.63 260.54 291.81 190.75 213.65 239.28 41.873 46.898 52.526 30% 30% 30% 29.31 32.83 36.77 86.53 96.91 108.54 10.534 11.798 13.214

13.82

-54.01

-60.49

-67.75

-75.88

-84.99

terminal value 6 326.83 268.00 58.829 30% 41.18 121.57 14.799

7 366.04 300.16 65.888 30% 46.12 136.15 16.5754

8 409.97 336.18 73.7946 30% 51.66 152.49 18.5644

-95.19

-106.61

-119.40

9 459.17 376.52 82.65 30% 57.85 170.79 20.792 133.73

10 514.27 421.70 92.56794234 30% 64.80 0.00 0



64.80

3483.74 785.00 60.71 724.29 561.81


BASE(2006) 165.58 145.84 19.74 30% 13.82

1 190.42 156.14 34.28 30% 23.99 68.98 10.5

2 218.98 179.56 39.42 30% 27.59 79.33 12.07

13.82

-55.48

-63.81

GROWTH AT 15% 3 4 5 251.83 289.60 333.04 206.50 237.47 273.09 45.329 52.128 59.947 30% 30% 30% 31.73 36.49 41.96 91.23 104.91 120.65 13.882 15.965 18.359 -73.38

-84.38

-97.04

terminal value 6 383.00 314.06 68.939 30% 48.26 138.74 21.113 111.60

7 440.45 361.17 79.2803 30% 55.50 159.55 24.2802

8 506.51 415.34 91.1723 30% 63.82 183.49 27.9222

-128.34

-147.59

9 582.49 477.64 104.85 30% 73.39 211.01 32.111 169.73

10 669.86 549.29 120.575421 30% 84.40 0.00 0



84.40

84.40

4537.78 1096.28 60.71 1035.57 803.26


BASE(2006) 1,541.75 1,258.55 283.2 30% 198.24

198.24

1 1773.01 1447.33 325.68 30% 227.98 312.60 168.8055 -253.43

2 2038.96 1664.43 374.532 30% 262.17 359.49 194.1263 -291.44

GROWTH AT 15% 3 4 5 2344.81 2696.53 3101.01 1914.10 2201.21 2531.39 430.7118 495.3186 569.6164 30% 30% 30% 301.50 346.72 398.73 413.41 475.42 546.74 223.2453 256.7321 295.2419 -335.16 -385.43 -443.25

terminal value 6 3566.16 2911.10 655.0588 30% 458.54 628.75 339.5282 -509.73

7 4101.09 3347.77 753.3176 30% 527.32 723.06 390.4574 -586.19

8 4716.25 3849.93 866.3153 30% 606.42 831.52 449.026 -674.12

9 5423.69 4427.42 996.2626 30% 697.38 956.25 516.3799 -775.24



10 6237.24 5091.54 1145.702 30% 801.99 0.00 0 801.99

801.99

-13322.09 1153.89 304.91 848.98

287.757153


CONCLUSION


Conclusion. We can conclude by the above performance of the companies . that some companies have performed well and some are still lagging behind. BIRLA CORPORATION LTD. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 3rd place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 76.29.it has been below average ,the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates.

Chettinad cements Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 3rd place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 76.29.it has been below average ,the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rate.

The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth


rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at last place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 83.22 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates.

K C P Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 2nd place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 90.8 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates.

Madras cements Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at 1st place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 73.88 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates

Financial Analysis of India Cements Ltd. The companies financial was calculated on the basis of FUTURE CASH FLOW OF THE FIRM is calculated on the basis of different growth rates such as 5%, 8%, 125 and 15%.Change in Capex , change in working capital, has been calculated on net block taking Fy 06 as a base year. 500.23 cr was taken as a base as Net Block and then it was calculated with different growth rates such as 5%, 8% , 12% and 15%.Rate of Capital expenses is calculated as (PBIT/Capital


employed)*100. it has been calculated from 1997-2006. it has been compared along with other 4 companies it ROCE stands at last place among the 5 companies. the average expenses percentage of other 4 companies is 82.63 where its expenses percentage is 83.22 .the average 5 of expenses is taken as 82%. Ebit has also been calculated on various growth rates


BIBILIOGRAPHY


Bibliography and Annexure ¾ The Indian cement industry, ICRA, JULY 2006 ¾ Indian cement industry-a perspective of environment friendliness’ ¾ Indian cement industry on concrete foundation, moneycontrol.com ¾ “The Indian Cement Industry”, ICRA Industry Watch Series#1, Update-II, Aug 1995 ¾ Cement, equitymaster.com, November 28,2006 ¾ www.capitaline.com ¾ www.saurasthracements.com ¾ www.kltd.com ¾ www.birlacorpltd.com ¾ www.madrascement.com ¾ www.nseindia.com ¾ www.bseindia.com




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