Ambuja Cement

Industry Profile :  Cement production in India from FY 07 to FY 17grow at 9.75% CAGR. Due to many reasons Demand growth rate for cement is outpacing supply growth in FY 16. After China (2483.18 million tonne ) , India is second largest cement producer (285.83 million tonne). Though the difference is very large. Lot of untapped potential of infrastructure and development of 100 smart cities are sufficient large boost for Cement sector. Demand for cement is from largely Housing sector 67%, infrastructure 13%, Commercial constriction 11%, Industrial construction 9%. Cement manufacturing   capacity of India is 420 MT at march 2017 with growth of 6% per year. Capacity of cement is largely in hand of few plants. 188 large cement plants  are manufacturing 98% cement, 365 plants accounting for remaining. Andhra Pradesh, Rajasthan and Tamilnadu account for 77 large plants out of 188. As per analyst estimate, in  next 10 years India will be main exporter of gray cement to middle east.

Company Profile  : The company is among major cement and clinker manufacturer in India and also for export. the company is operating in Business to Business segment and also in retail segment. The company also having ready to mix products for special needs and demand. It also manufacturing Ambuja plus product specially made for Roof. the company also holding brands like alcconfine for Metro rail, Dam, flyover, road, Bridge tunnel, the company also manufacturing cement for Rail by taking care of their special needs.

Share Holding  :  Holcim Cement, one of the largest global cement manufacturer holding 63.62% stake. Company is famous among Institutions. Mutual funds holds, 2%, Financial institutions Hold 8.78%. foreign investors hold 18.35% Remaining with 7.25% stake with Public.

Financials and Ratios  : 

 December 11December 12December 13December 14December 15December 16
Revenue8802.1310079.179553.9710407.109819.599844.05
Net Profit1228.861297.061294.571496.36807.56970.09
NPM14.3613.3314.1314.998.5310.46
EPS8.028.438.399.675.214.89
Book Value52.5957.0961.3665.1966.4196.06
Dividend Payout39.9342.7742.9751.7653.8050.15
Dividend per share3.203.63.6052.802.80
ROE15.2214.7313.6414.817.835.08
ROCE1413.7712.7913.917.384.93
ROA10.6410.439.9810.765.704.17
Debt to equity0.0100000
Asset turnover74.1178.3170.6571.7866.8039.85

Future Prospects :  For developing economy like India where govt is trying to give house for everyone, and where large infrastructure projects are also in progress, its not shocking that Cement sector is hot favorite. Birth of 29th state in india, Telangana, and its capital is large opportunity.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter