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 Administration

Of
Bangalore University
By

VISHAL CHOPRA

Reg. No: 05XQCM6116

Under the Guidance and Supervision

Of
Prof.S.SANTHANAM

Associate Bharathiya Vidya Bhavan

#43, Race Course Road, BANGALORE-560001
 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
Administration 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 Vishal Chopra

Date: (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.

Place: Bangalore Prof.S.SANTHANAM

Date: (Faculty, MPBIM)
This to certify that this report
entitled
Performance of Cement Industry”,

Principal’s Certificate

“Analysis of Financial

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 of Business Administration at Bangalore
University, under the guidance and 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

Place: Bangalore (Dr. N S Malavalli)

Date: Principal
 ACKNOWLEDGMENT

I sincerely thank Dr.Nagesh.S.Malavalli (Principal), , 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.

Place: Bangalore VISHAL CHOPRA.V.

Date: (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 Empirical Results

5. 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 terms 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 accounts 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 terms 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 Germany. As expected, the emerging markets are on course to register 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 accounting 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.
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 France 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 50-
kg 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 pass 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 pass 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 account 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 account 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 premiums to
strengthen their presence in the Indian market should come as no surprise with the
domestic cement industry registering 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, Germany 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 account 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), registering 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 terms 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 account of buoyancy in the end user 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 support 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 pass 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 account 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 accounts 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
policy makers should continue with their emphasis on construction and infrastructure
development.”

The present scenario of cement industry is very good in terms 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
registering 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 demand-
supply 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 accounting for nearly
50 per cent of the installed capacity of about 160 million tonnes and with small, regional
players holding the balance. By all accounts, 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 accounts 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 2006-
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 members
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 terms 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 accountants 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 administrative 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 Wal-
Mart 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. Remember, 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 Wal-
Mart 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 pass 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 accounting 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 accounts

receivables.
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 members 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 terms 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 members 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 company.

One of the most important areas for any investor to look at when researching a company is the 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 account 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, auto-
ancillaries, 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 premium 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 premium 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
premium 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 users 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, Germany 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, Germany 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, KCP 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.

KCP hived off its sugar and industrial alcohol business, which was transferred to a new
company, KCP Sugar Industries Corporation. The Company also undertook a joint
venture with Vantech Industries for the manufacture of specialized insecticides. KCP
promoted FCB-KCP, a joint venture with FCB, France, 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. KCP has also received the Certificate of
Merit for outstanding export performance during 1994-95 among Non-SSI exporters in
industrial machinery panel 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
th
1997-2006. it has been compared along with other 4 companies it ROCE stands at 4
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 271.78 D/E 0.76

EQUITY 65.2272
INTEREST 13.62
WACOC= KeWe*KdWd Kd= 5.011406
Ke= 15 %
TAX 30%
WACOC= 6.27 TOTAL CAPITAL 337.01

th
The terminal value is calculated as 10 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 304.91 D/E 1.96
EQUITY 597.6236
INTEREST 19.41
WACOC= KeWe*KdWd Kd= 6.365813
Ke= 15 %
TAX 30%
WACOC= 8.25 TOTAL CAPITAL 902.53
th
The terminal value is calculated as 10 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 D/E 2.81
EQUITY 4285.9244
INTEREST 148.93
WACOC= KeWe*KdWd Kd= 9.764365
Ke= 15 %
TAX 30%
WACOC= 8.98 TOTAL CAPITAL 5,811.16

th
The terminal value is calculated as 10 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 60.71 D/E 0.52

EQUITY 31.5692
INTEREST 4.44
WACOC= KeWe*KdWd Kd= 7.313457
Ke= 15 %
TAX 30%
WACOC= 9.86 TOTAL CAPITAL 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
st
companies it ROCE stands at 1 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 602.44 D/E 1.78

EQUITY 1072.3432
INTEREST 36.3
WACOC= KeWe*KdWd Kd= 6.025496
Ke= 15 %
TAX 30%
WACOC= 8.10 TOTAL CAPITAL 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.
STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH
5% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 500.23 525.24 551.50 579.08 608.03 638.43 670.36 703.87 739.07 776.02 814.82
CHANGE IN CAPEX 25.01 26.26 27.58 28.95 30.40 31.92 33.52 35.19 36.95 38.80
STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH
8% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 500.23 540.25 583.47 630.15 680.56 735.00 793.80 857.31 925.89 999.96 1079.96
CHANGE IN CAPEX 40.02 43.22 46.68 50.41 54.44 58.80 63.50 68.58 74.07 80.00
STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH
12% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 500.23 560.26 627.49 702.79 787.12 881.58 987.37 1105.85 1238.55 1387.18 1553.64
CHANGE IN CAPEX 60.03 67.23 75.30 84.33 94.45 105.79 118.48 132.70 148.63 166.46
STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH
15% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 500.23 575.26 661.55 760.79 874.91 1006.14 1157.06 1330.62 1530.22 1759.75 2023.71
CHANGE IN CAPEX 75.03 86.29 99.23 114.12 131.24 150.92 173.56 199.59 229.53 263.96
Chettinad cements ltd.
STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH
5% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 479.48 503.45 528.63 555.06 582.81 611.95 642.55 674.68 708.41 743.83 781.02
CHANGE IN CAPEX 23.97 25.17 26.43 27.75 29.14 30.60 32.13 33.73 35.42 37.19
STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH
8% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 479.48 517.84 559.27 604.01 652.33 704.51 760.87 821.74 887.48 958.48 1035.16
CHANGE IN CAPEX 38.36 41.43 44.74 48.32 52.19 56.36 60.87 65.74 71.00 76.68
STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH
12% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 479.48 537.02 601.46 673.63 754.47 845.01 946.41 1059.98 1187.17 1329.64 1489.19
CHANGE IN CAPEX 57.54 64.44 72.18 80.84 90.54 101.40 113.57 127.20 142.46 159.56
 STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH
15% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 479.48 551.40 634.11 729.23 838.61 964.41 1109.07 1275.43 1466.74 1686.75 1939.76
CHANGE IN CAPEX 71.92 82.71 95.12 109.38 125.79 144.66 166.36 191.31 220.01 253.01
India Cements Ltd.
STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH
5% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 2083.99 2188.19 2297.60 2412.48 2533.10 2659.76 2792.75 2932.38 3079.00 3232.95 3491.59
CHANGE IN CAPEX 104.20 109.41 114.88 120.62 126.66 132.99 139.64 146.62 153.95 258.64
STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH
8% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 2083.99 2250.71 2430.77 2625.23 2835.25 3062.07 3307.03 3571.59 3857.32 4165.91 4499.18
CHANGE IN CAPEX 166.72 180.06 194.46 210.02 226.82 244.97 264.56 285.73 308.59 333.27
STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH
12% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 2083.99 2334.07 2614.16 2927.86 3279.20 3672.70 4113.43 4607.04 5159.88 5779.07 6472.56
CHANGE IN CAPEX 250.08 280.09 313.70 351.34 393.50 440.72 493.61 552.84 619.19 693.49
STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH
15% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 2083.99 2396.59 2756.08 3169.49 3644.91 4191.65 4820.40 5543.45 6374.97 7331.22 8430.90
CHANGE IN CAPEX 312.60 359.49 413.41 475.42 546.74 628.75 723.06 831.52 956.25 1099.68
Madras cements ltd
STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH
5% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 989.89 1039.38 1091.35 1145.92 1203.22 1263.38 1326.55 1392.87 1462.52 1535.64 1612.43
CHANGE IN CAPEX 49.49 51.97 54.57 57.30 60.16 63.17 66.33 69.64 73.13 76.78
STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH
8% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 989.89 1069.08 1154.61 1246.98 1346.73 1454.47 1570.83 1696.50 1832.22 1978.79 2137.10
CHANGE IN CAPEX 79.19 85.53 92.37 99.76 107.74 116.36 125.67 135.72 146.58 158.30
STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH
12% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 989.89 1108.68 1241.72 1390.72 1557.61 1744.52 1953.87 2188.33 2450.93 2745.04 3074.45
CHANGE IN CAPEX 118.79 133.04 149.01 166.89 186.91 209.34 234.46 262.60 294.11 329.41
STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH
15% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 989.89 1138.37 1309.13 1505.50 1731.32 1991.02 2289.68 2633.13 3028.10 3482.31 4004.66
CHANGE IN CAPEX 148.48 170.76 196.37 225.82 259.70 298.65 343.45 394.97 454.21 522.35
K.C.P.ltd
STATEMENT SHOWING CHANGE IN CAPEX AT 5% GROWTH
5% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 68.98 72.43 78.22 84.48 91.24 98.54 106.42 114.94 124.13 134.06 144.79
CHANGE IN CAPEX 3.45 5.79 6.26 6.76 7.30 7.88 8.51 9.19 9.93 10.72
STATEMENT SHOWING CHANGE IN CAPEX AT 8% GROWTH
8% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 68.98 74.50 80.46 86.89 93.85 101.35 109.46 118.22 127.68 137.89 148.92
CHANGE IN CAPEX 5.52 5.96 6.44 6.95 7.51 8.11 8.76 9.46 10.21 11.03
STATEMENT SHOWING CHANGE IN CAPEX AT 12% GROWTH
12% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 68.98 77.26 86.53 96.91 108.54 121.57 136.15 152.49 170.79 191.29 214.24
CHANGE IN CAPEX 8.28 9.27 10.38 11.63 13.02 14.59 16.34 18.30 20.50 22.95
 STATEMENT SHOWING CHANGE IN CAPEX AT 15% GROWTH
15% BASE 1 2 3 4 5 6 7 8 9 10
NET BLOCK 68.98 79.33 91.23 104.91 120.65 138.74 159.55 183.49 211.01 242.66 279.06
CHANGE IN CAPEX 10.35 11.90 13.68 15.74 18.10 20.81 23.93 27.52 31.65 36.40
68.98 79.33 91.23 104.91 120.65 138.74 159.55 183.49 211.01 242.66
CHANGE IN WORKING CAPITAL
 BIRLA CORPORATION LTD.

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 %

GROWTH AT 5%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 105.72 111.006 116.5563 122.3841 128.5033 134.9285 141.6749 148.7587 156.1966 164.0064 172.2067
SUNDRY DEBTORS 27.7 29.085 30.53925 32.06621 33.66952 35.353 37.12065 38.97668 40.92552 42.97179 45.12038
CASH AND BANK 59.23 62.1915 65.30108 68.56613 71.99444 75.59416 79.37386 83.34256 87.50969 91.88517 96.47943
LOANS AND ADVANCES 124.87 131.1135 137.6692 144.5526 151.7803 159.3693 167.3377 175.7046 184.4899 193.7144 203.4001
TOTAL CURRENT ASSETS 317.52 333.396 350.0658 367.5691 385.9475 405.2449 425.5072 446.7825 469.1217 492.5777 517.2066
CURRENT LIABILITIES 257.53 270.4065 283.9268 298.1232 313.0293 328.6808 345.1148 362.3706 380.4891 399.5136 419.4892
PROVISIONS 50.27 52.7835 55.42268 58.19381 61.1035 64.15867 67.36661 70.73494 74.27169 77.98527 81.88453
TOTAL CURRENT LIABILITIES 307.8 323.19 339.3495 356.317 374.1328 392.8395 412.4814 433.1055 454.7608 477.4988 501.3738
WORKING CAPITAL 9.72 10.206 10.7163 11.25212 11.81472 12.40546 13.02573 13.67702 14.36087 15.07891 15.83286
CHANGE IN WC 0.486 0.5103 0.535815 0.562606 0.590736 0.620273 0.651286 0.683851 0.718043 0.753946

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 8 %

GROWTH AT 8%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 105.72 114.1776 123.3118 133.1768 143.8309 155.3374 167.7644 181.1855 195.6803 211.3348 228.2416
SUNDRY DEBTORS 27.7 29.916 32.30928 34.89402 37.68554 40.70039 43.95642 47.47293 51.27077 55.37243 59.80222
CASH AND BANK 59.23 63.9684 69.08587 74.61274 80.58176 87.0283 93.99057 101.5098 109.6306 118.401 127.8731
LOANS AND ADVANCES 124.87 134.8596 145.6484 157.3002 169.8843 183.475 198.153 214.0052 231.1257 249.6157 269.585
TOTAL CURRENT ASSETS 317.52 342.9216 370.3553 399.9838 431.9825 466.5411 503.8643 544.1735 587.7074 634.7239 685.5019
CURRENT LIABILITIES 257.53 278.1324 300.383 324.4136 350.3667 378.3961 408.6677 441.3612 476.6701 514.8037 555.988
PROVISIONS 50.27 54.2916 58.63493 63.32572 68.39178 73.86312 79.77217 86.15395 93.04626 100.49 108.5292
TOTAL CURRENT LIABILITIES 307.8 332.424 359.0179 387.7394 418.7585 452.2592 488.4399 527.5151 569.7163 615.2936 664.5171
WORKING CAPITAL 9.72 10.4976 11.33741 12.2444 13.22395 14.28187 15.42442 16.65837 17.99104 19.43032 20.98475
CHANGE IN WC 0.7776 0.839808 0.906993 0.979552 1.057916 1.14255 1.233953 1.33267 1.439283 1.554426
 STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 12 %
GROWTH AT 12%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 1
INVENTORIES 105.72 118.4064 132.6152 148.529 166.3525 186.3148 208.6725 233.7132 261.7588 293.1699 328.350
SUNDRY DEBTORS 27.7 31.024 34.74688 38.91651 43.58649 48.81686 54.67489 61.23587 68.58418 76.81428 86.03
CASH AND BANK 59.23 66.3376 74.29811 83.21389 93.19955 104.3835 116.9095 130.9387 146.6513 164.2495 183.959
LOANS AND ADVANCES 124.87 139.8544 156.6369 175.4334 196.4854 220.0636 246.4712 276.0478 309.1735 346.2743 387.827
TOTAL CURRENT ASSETS 317.52 355.6224 398.2971 446.0927 499.6239 559.5787 626.7282 701.9356 786.1678 880.508 986.168
CURRENT LIABILITIES 257.53 288.4336 323.0456 361.8111 405.2284 453.8559 508.3186 569.3168 637.6348 714.151 799.849
PROVISIONS 50.27 56.3024 63.05869 70.62573 79.10082 88.59292 99.22407 111.131 124.4667 139.4027 156.13
TOTAL CURRENT LIABILITIES 307.8 344.736 386.1043 432.4368 484.3293 542.4488 607.5426 680.4477 762.1015 853.5536 955.980
WORKING CAPITAL 9.72 10.8864 12.19277 13.6559 15.29461 17.12996 19.18556 21.48782 24.06636 26.95433 30.1888
CHANGE IN WC 1.1664 1.306368 1.463132 1.638708 1.835353 2.055595 2.302267 2.578539 2.887963 3.23451

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 15 %

GROWTH AT 15%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 1
INVENTORIES 105.72 121.578 139.8147 160.7869 184.9049 212.6407 244.5368 281.2173 323.3999 371.9099 427.696
SUNDRY DEBTORS 27.7 31.855 36.63325 42.12824 48.44747 55.71459 64.07178 73.68255 84.73493 97.44517 112.061
CASH AND BANK 59.23 68.1145 78.33168 90.08143 103.5936 119.1327 137.0026 157.553 181.1859 208.3638 239.618
LOANS AND ADVANCES 124.87 143.6005 165.1406 189.9117 218.3984 251.1582 288.8319 332.1567 381.9802 439.2772 505.168
TOTAL CURRENT ASSETS 317.52 365.148 419.9202 482.9082 555.3445 638.6461 734.4431 844.6095 971.3009 1116.996 1284.54
CURRENT LIABILITIES 257.53 296.1595 340.5834 391.6709 450.4216 517.9848 595.6825 685.0349 787.7902 905.9587 1041.85
PROVISIONS 50.27 57.8105 66.48208 76.45439 87.92254 101.1109 116.2776 133.7192 153.7771 176.8436 203.370
TOTAL CURRENT LIABILITIES 307.8 353.97 407.0655 468.1253 538.3441 619.0957 711.9601 818.7541 941.5672 1082.802 1245.22
WORKING CAPITAL 9.72 11.178 12.8547 14.78291 17.00034 19.55039 22.48295 25.85539 29.7337 34.19376 39.3228
CHANGE IN WC 1.458 1.6767 1.928205 2.217436 2.550051 2.932559 3.372443 3.878309 4.460055 5.12906
 CHETTINAD CEMENTS
STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 %
GROWTH AT 5%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.17 105.1785 110.4374 115.9593 121.7573 127.8451 134.2374 140.9492 147.9967 155.3965 163.1664
SUNDRY DEBTORS 17.44 18.312 19.2276 20.18898 21.19843 22.25835 23.37127 24.53983 25.76682 27.05516 28.40792
CASH AND BANK 21.49 22.5645 23.69273 24.87736 26.12123 27.42729 28.79866 30.23859 31.75052 33.33804 35.00495
LOANS AND ADVANCES 40.76 42.798 49.2177 56.60036 65.09041 74.85397 86.08206 98.99437 113.8435 130.9201 150.5581
TOTAL CURRENT ASSETS 179.86 188.853 217.181 249.7581 287.2218 330.3051 379.8508 436.8285 502.3527 577.7056 664.3615
CURRENT LIABILITIES 77.59 81.4695 85.54298 89.82012 94.31113 99.02669 103.978 109.1769 114.6358 120.3676 126.3859
PROVISIONS 30.09 31.5945 33.17423 34.83294 36.57458 38.40331 40.32348 42.33965 44.45663 46.67947 49.01344
TOTAL CURRENT LIABILITIES 107.68 113.064 118.7172 124.6531 130.8857 137.43 144.3015 151.5166 159.0924 167.047 175.3994
WORKING CAPITAL 72.18 75.789 79.57845 83.55737 87.73524 92.122 96.7281 101.5645 106.6427 111.9749 117.5736
CHANGE IN WC 3.609 3.78945 3.978923 4.177869 4.386762 4.6061 4.836405 5.078225 5.332137 5.598744

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 8 %

GROWTH AT 8%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.17 108.1836 116.8383 126.1854 136.2802 147.1826 158.9572 171.6738 185.4077 200.2403 216.2595
SUNDRY DEBTORS 17.44 18.8352 20.34202 21.96938 23.72693 25.62508 27.67509 29.8891 32.28022 34.86264 37.65165
CASH AND BANK 21.49 23.2092 25.06594 27.07121 29.23691 31.57586 34.10193 36.83008 39.77649 42.95861 46.3953
LOANS AND ADVANCES 40.76 44.0208 47.54246 51.34586 55.45353 59.88981 64.681 69.85548 75.44392 81.47943 87.99778
TOTAL CURRENT ASSETS 179.86 194.2488 209.7887 226.5718 244.6975 264.2733 285.4152 308.2484 332.9083 359.541 388.3043
CURRENT LIABILITIES 77.59 83.7972 90.50098 97.74105 105.5603 114.0052 123.1256 132.9756 143.6137 155.1028 167.511
PROVISIONS 30.09 32.4972 35.09698 37.90473 40.93711 44.21208 47.74905 51.56897 55.69449 60.15005 64.96205
TOTAL CURRENT LIABILITIES 107.68 116.2944 125.598 135.6458 146.4975 158.2172 170.8746 184.5446 199.3082 215.2528 232.473
WORKING CAPITAL 72.18 77.9544 84.19075 90.92601 98.20009 106.0561 114.5406 123.7038 133.6001 144.2882 155.8312
CHANGE IN WC 5.7744 6.236352 6.73526 7.274081 7.856007 8.484488 9.163247 9.896307 10.68801 11.54305
 STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 12 %
GROWTH AT 12%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.17 112.1904 125.6532 140.7316 157.6194 176.5338 197.7178 221.444 248.0172 277.7793 311.1128
SUNDRY DEBTORS 17.44 19.5328 21.87674 24.50194 27.44218 30.73524 34.42347 38.55428 43.1808 48.36249 54.16599
CASH AND BANK 21.49 24.0688 26.95706 30.1919 33.81493 37.87272 42.41745 47.50754 53.20845 59.59346 66.74468
LOANS AND ADVANCES 40.76 45.6512 51.12934 57.26487 64.13665 71.83305 80.45301 90.10737 100.9203 113.0307 126.5944
TOTAL CURRENT ASSETS 179.86 201.4432 225.6164 252.6904 283.0132 316.9748 355.0117 397.6132 445.3267 498.7659 558.6179
CURRENT LIABILITIES 77.59 86.9008 97.3289 109.0084 122.0894 136.7401 153.1489 171.5268 192.11 215.1632 240.9828
PROVISIONS 30.09 33.7008 37.7449 42.27428 47.3472 53.02886 59.39232 66.5194 74.50173 83.44194 93.45497
TOTAL CURRENT LIABILITIES 107.68 120.6016 135.0738 151.2826 169.4366 189.769 212.5412 238.0462 266.6117 298.6051 334.4377
WORKING CAPITAL 72.18 80.8416 90.54259 101.4077 113.5766 127.2058 142.4705 159.567 178.715 200.1608 224.1801
CHANGE IN WC 8.6616 9.700992 10.86511 12.16892 13.6292 15.2647 17.09646 19.14804 21.4458 24.0193

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 15 %

GROWTH AT 15%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.17 115.1955 132.4748 152.346 175.198 201.4776 231.6993 266.4542 306.4223 352.3857 405.2435
SUNDRY DEBTORS 17.44 20.056 23.0644 26.52406 30.50267 35.07807 40.33978 46.39075 53.34936 61.35176 70.55453
CASH AND BANK 21.49 24.7135 28.42053 32.6836 37.58614 43.22407 49.70768 57.16383 65.7384 75.59916 86.93904
LOANS AND ADVANCES 40.76 46.874 53.9051 61.99087 71.28949 81.98292 94.28036 108.4224 124.6858 143.3886 164.8969
TOTAL CURRENT ASSETS 179.86 206.839 237.8649 273.5446 314.5763 361.7627 416.0271 478.4312 550.1959 632.7252 727.634
CURRENT LIABILITIES 77.59 89.2285 102.6128 118.0047 135.7054 156.0612 179.4704 206.3909 237.3496 272.952 313.8948
PROVISIONS 30.09 34.6035 39.79403 45.76313 52.6276 60.52174 69.6 80.04 92.046 105.8529 121.7308
TOTAL CURRENT LIABILITIES 107.68 123.832 142.4068 163.7678 188.333 216.5829 249.0704 286.4309 329.3956 378.8049 435.6257
WORKING CAPITAL 72.18 83.007 95.45805 109.7768 126.2433 145.1798 166.9567 192.0002 220.8003 253.9203 292.0084
CHANGE IN WC 10.827 12.45105 14.31871 16.46651 18.93649 21.77696 25.04351 28.80004 33.12004 38.08805
 INDIA CEMENTS LTD.

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 %

GROWTH AT 8%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 213.82 224.511 235.7366 247.5234 259.9 272.895 286.539 300.866 315.9095 331.705 348.2902
SUNDRY DEBTORS 240.59 252.6195 265.2505 278.513 292.439 307.061 322.414 338.534 355.461 373.2341 391.8958
CASH AND BANK 43.62 45.801 48.09105 50.4956 53.0204 55.6714 58.455 61.3777 64.44661 67.66894 71.05238
LOANS AND ADVANCES 1014.39 1065.11 1118.365 1174.283 1233 1294.65 1359.38 1427.35 1498.716 1573.652 1652.334
TOTAL CURRENT ASSETS 1512.42 1588.041 1667.443 1750.815 1838.36 1930.27 2026.79 2128.13 2234.533 2346.26 2463.573
CURRENT LIABILITIES 387.05 406.4025 426.7226 448.0588 470.462 493.985 518.684 544.618 571.8491 600.4416 630.4637
PROVISIONS
TOTAL CURRENT LIABILITIES 387.05 406.4025 426.7226 448.0588 470.462 493.985 518.684 544.618 571.8491 600.4416 630.4637
WORKING CAPITAL 1125.37 1181.639 1240.72 1302.756 1367.89 1436.29 1508.1 1583.51 1662.684 1745.818 1833.109
CHANGE IN WC 56.2685 59.08193 62.03602 65.1378 68.3947 71.8144 75.4052 79.17543 83.1342 87.29091

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 8 %

GROWTH AT 8%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 213.82 230.9256 249.3996 269.3516 290.9 314.172 339.305 366.45 395.7659 427.4272 461.6213
SUNDRY DEBTORS 240.59 259.8372 280.6242 303.0741 327.32 353.506 381.786 412.329 445.3153 480.9405 519.4158
CASH AND BANK 43.62 47.1096 50.87837 54.94864 59.3445 64.0921 69.2195 74.757 80.73758 87.19658 94.17231
LOANS AND ADVANCES 1014.39 1095.541 1183.184 1277.839 1380.07 1490.47 1609.71 1738.49 1877.565 2027.77 2189.992
TOTAL CURRENT ASSETS 1512.42 1633.414 1764.087 1905.214 2057.63 2222.24 2400.02 2592.02 2799.384 3023.335 3265.201
CURRENT LIABILITIES 387.05 418.014 451.4551 487.5715 526.577 568.703 614.2 663.336 716.4025 773.7147 835.6119
PROVISIONS 0 0 0 0 0 0 0 0 0 0 0
TOTAL CURRENT LIABILITIES 387.05 418.014 451.4551 487.5715 526.577 568.703 614.2 663.336 716.4025 773.7147 835.6119
WORKING CAPITAL 1125.37 1215.4 1312.632 1417.642 1531.05 1653.54 1785.82 1928.69 2082.981 2249.62 2429.589
CHANGE IN WC 90.0296 97.23197 105.0105 113.411 122.484 132.283 142.866 154.2949 166.6385 179.9696
 STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 12 %
GROWTH AT 12%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 213.82 239.4784 268.2158 300.4017 336.45 376.824 422.043 472.688 529.4104 592.9397 664.0925
SUNDRY DEBTORS 240.59 269.4608 301.7961 338.0116 378.573 424.002 474.882 531.868 595.692 667.175 747.236
CASH AND BANK 43.62 48.8544 54.71693 61.28296 68.6369 76.8733 86.0981 96.4299 108.0015 120.9617 135.4771
LOANS AND ADVANCES 1014.39 1136.117 1272.451 1425.145 1596.16 1787.7 2002.23 2242.49 2511.592 2812.983 3150.541
TOTAL CURRENT ASSETS 1512.42 1693.91 1897.18 2124.841 2379.82 2665.4 2985.25 3343.48 3744.696 4194.06 4697.347
CURRENT LIABILITIES 387.05 433.496 485.5155 543.7774 609.031 682.114 763.968 855.644 958.3215 1073.32 1202.119
PROVISIONS 0 0 0 0 0 0 0 0 0 0 0
TOTAL CURRENT LIABILITIES 387.05 433.496 485.5155 543.7774 609.031 682.114 763.968 855.644 958.3215 1073.32 1202.119
WORKING CAPITAL 1125.37 1260.414 1411.664 1581.064 1770.79 1983.29 2221.28 2487.83 2786.375 3120.74 3495.228
CHANGE IN WC 135.0444 151.2497 169.3997 189.728 212.495 237.994 266.554 298.5401 334.365 374.4888

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 15 %

GROWTH AT 15%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 213.82 245.893 282.777 325.1935 373.973 430.068 494.579 568.765 654.0803 752.1923 865.0212
SUNDRY DEBTORS 240.59 276.6785 318.1803 365.9073 420.793 483.912 556.499 639.974 735.9703 846.3659 973.3207
CASH AND BANK 43.62 50.163 57.68745 66.34057 76.2917 87.7354 100.896 116.03 133.4346 153.4498 176.4672
LOANS AND ADVANCES 1014.39 1166.549 1341.531 1542.76 1774.17 2040.3 2346.35 2698.3 3103.042 3568.499 4103.773
TOTAL CURRENT ASSETS 1512.42 1739.283 2000.175 2300.202 2645.23 3042.02 3498.32 4023.07 4626.527 5320.506 6118.582
CURRENT LIABILITIES 387.05 445.1075 511.8736 588.6547 676.953 778.496 895.27 1029.56 1183.995 1361.594 1565.833
PROVISIONS 0 0 0 0 0 0 0 0 0 0 0
TOTAL CURRENT LIABILITIES 387.05 445.1075 511.8736 588.6547 676.953 778.496 895.27 1029.56 1183.995 1361.594 1565.833
WORKING CAPITAL 1125.37 1294.176 1488.302 1711.547 1968.28 2263.52 2603.05 2993.51 3442.533 3958.912 4552.749
CHANGE IN WC 168.8055 194.1263 223.2453 256.732 295.242 339.528 390.457 449.026 516.3799 593.8369
MADRAS CEMENTS LTD.

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 %

GROWTH AT 5%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.95 106 111.3 116.86 122.71 128.84 135.28 142.05 149.15 156.61 164.44
SUNDRY DEBTORS 49.35 51.818 54.408 57.129 59.985 62.984 66.134 69.44 72.912 76.558 80.386
CASH AND BANK 49.3 51.765 54.353 57.071 59.924 62.921 66.067 69.37 72.839 76.48 80.305
LOANS AND ADVANCES 127.47 133.84 140.54 147.56 154.94 162.69 170.82 179.36 188.33 197.75 207.64
TOTAL CURRENT ASSETS 327.07 343.42 360.59 378.62 397.56 417.43 438.31 460.22 483.23 507.39 532.76
CURRENT LIABILITIES 184.15 193.36 203.03 213.18 223.84 235.03 246.78 259.12 272.07 285.68 299.96
PROVISIONS 44.55 46.778 49.116 51.572 54.151 56.858 59.701 62.686 65.821 69.112 72.567
TOTAL CURRENT LIABILITIES 228.7 240.14 252.14 264.75 277.99 291.89 306.48 321.8 337.89 354.79 372.53
WORKING CAPITAL 98.37 103.29 108.45 113.88 119.57 125.55 131.83 138.42 145.34 152.6 160.23
CHANGE IN WC 4.9185 5.1644 5.4226 5.6938 5.9785 6.2774 6.5913 6.9208 7.2669 7.6302

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 8 %

GROWTH AT 8%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.95 109.03 117.75 127.17 137.34 148.33 160.19 173.01 186.85 201.8 217.94
SUNDRY DEBTORS 49.35 53.298 57.562 62.167 67.14 72.511 78.312 84.577 91.343 98.651 106.54
CASH AND BANK 49.3 53.244 57.504 62.104 67.072 72.438 78.233 84.492 91.251 98.551 106.44
LOANS AND ADVANCES 127.47 137.67 148.68 160.58 173.42 187.3 202.28 218.46 235.94 254.81 275.2
TOTAL CURRENT ASSETS 327.07 353.24 381.49 412.01 444.98 480.57 519.02 560.54 605.38 653.81 706.12
CURRENT LIABILITIES 184.15 198.88 214.79 231.98 250.53 270.58 292.22 315.6 340.85 368.12 397.57
PROVISIONS 44.55 48.114 51.963 56.12 60.61 65.459 70.695 76.351 82.459 89.056 96.18
TOTAL CURRENT LIABILITIES 228.7 247 266.76 288.1 311.14 336.04 362.92 391.95 423.31 457.17 493.75
WORKING CAPITAL 98.37 106.24 114.74 123.92 133.83 144.54 156.1 168.59 182.08 196.64 212.37
CHANGE IN WC 7.8696 8.4992 9.1791 9.9134 10.707 11.563 12.488 13.487 14.566 15.731
 STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 12 %
GROWTH AT 12%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.95 113.06 126.63 141.83 158.85 177.91 199.26 223.17 249.95 279.94 313.54
SUNDRY DEBTORS 49.35 55.272 61.905 69.333 77.653 86.972 97.408 109.1 122.19 136.85 153.27
CASH AND BANK 49.3 55.216 61.842 69.263 77.575 86.883 97.309 108.99 122.06 136.71 153.12
LOANS AND ADVANCES 127.47 142.77 159.9 179.09 200.58 224.65 251.6 281.8 315.61 353.48 395.9
TOTAL CURRENT ASSETS 327.07 366.32 410.28 459.51 514.65 576.41 645.58 723.05 809.81 906.99 1015.8
CURRENT LIABILITIES 184.15 206.25 231 258.72 289.76 324.54 363.48 407.1 455.95 510.66 571.94
PROVISIONS 44.55 49.896 55.884 62.59 70.1 78.512 87.934 98.486 110.3 123.54 138.37
TOTAL CURRENT LIABILITIES 228.7 256.14 286.88 321.31 359.86 403.05 451.41 505.58 566.25 634.2 710.31
WORKING CAPITAL 98.37 110.17 123.4 138.2 154.79 173.36 194.16 217.46 243.56 272.79 305.52
CHANGE IN WC 11.804 13.221 14.807 16.584 18.574 20.803 23.3 26.096 29.227 32.735
STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 15 %
GROWTH AT 15%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 100.95 116.09 133.51 153.53 176.56 203.05 233.5 268.53 308.81 355.13 408.4
SUNDRY DEBTORS 49.35 56.753 65.265 75.055 86.313 99.26 114.15 131.27 150.96 173.61 199.65
CASH AND BANK 49.3 56.695 65.199 74.979 86.226 99.16 114.03 131.14 150.81 173.43 199.45
LOANS AND ADVANCES 127.47 146.59 168.58 193.87 222.95 256.39 294.85 339.07 389.93 448.42 515.69
TOTAL CURRENT ASSETS 327.07 376.13 432.55 497.43 572.05 657.85 756.53 870.01 1000.5 1150.6 1323.2
CURRENT LIABILITIES 184.15 211.77 243.54 280.07 322.08 370.39 425.95 489.84 563.32 647.82 744.99
PROVISIONS 44.55 51.233 58.917 67.755 77.918 89.606 103.05 118.5 136.28 156.72 180.23
TOTAL CURRENT LIABILITIES 228.7 263.01 302.46 347.82 400 460 529 608.35 699.6 804.54 925.22
WORKING CAPITAL 98.37 113.13 130.09 149.61 172.05 197.86 227.54 261.67 300.92 346.05 397.96
CHANGE IN WC 14.756 16.969 19.514 22.441 25.807 29.679 34.13 39.25 45.137 51.908
K.C.P.LTD.

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 5 %

GROWTH AT 5%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 51.2 53.76 56.448 59.27 62.234 65.346 68.613 72.044 75.646 79.428 83.399
SUNDRY DEBTORS 14.06 14.76 15.501 16.28 17.09 17.945 18.842 19.784 20.773 21.812 22.902
CASH AND BANK 17.07 17.92 18.82 19.76 20.749 21.786 22.875 24.019 25.22 26.481 27.805
LOANS AND ADVANCES 56.72 59.56 62.534 65.66 68.944 72.391 76.01 79.811 83.801 87.991 92.391
TOTAL CURRENT ASSETS 139.05 146 163.52 183.1 205.12 229.74 257.31 288.18 322.77 361.5 404.88
CURRENT LIABILITIES 46.9 49.25 51.707 54.29 57.007 59.858 62.85 65.993 69.293 72.757 76.395
PROVISIONS 22.17 23.28 24.442 25.66 26.948 28.295 29.71 31.195 32.755 34.393 36.113
TOTAL CURRENT LIABILITIES 69.07 72.52 76.15 79.96 83.955 88.153 92.56 97.188 102.05 107.15 112.51
WORKING CAPITAL 69.98 73.48 77.153 81.01 85.061 89.314 93.78 98.469 103.39 108.56 113.99
CHANGE IN WC 3.499 3.674 3.858 4.0505 4.2531 4.4657 4.689 4.9234 5.1696 5.4281

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 8 %

GROWTH AT 8%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 51.2 55.3 59.72 64.5 69.657 75.23 81.248 87.748 94.768 102.35 110.54
SUNDRY DEBTORS 14.06 15.18 16.4 17.71 19.128 20.659 22.311 24.096 26.024 28.106 30.354
CASH AND BANK 17.07 18.44 19.91 21.5 23.224 25.081 27.088 29.255 31.595 34.123 36.853
LOANS AND ADVANCES 56.72 61.26 66.158 71.45 77.167 83.34 90.008 97.208 104.98 113.38 122.45
TOTAL CURRENT ASSETS 139.05 150.2 162.19 175.2 189.18 204.31 220.65 238.31 257.37 277.96 300.2
CURRENT LIABILITIES 46.9 50.65 54.704 59.08 63.807 68.911 74.424 80.378 86.809 93.753 101.25
PROVISIONS 22.17 23.94 25.859 27.93 30.162 32.575 35.181 37.995 41.035 44.318 47.863
TOTAL CURRENT LIABILITIES 69.07 74.6 80.563 87.01 93.969 101.49 109.61 118.37 127.84 138.07 149.12
WORKING CAPITAL 69.98 75.58 81.625 88.15 95.207 102.82 111.05 119.93 129.53 139.89 151.08
CHANGE IN WC 5.598 6.0463 6.53 7.0524 7.6166 8.2259 8.884 9.5947 10.362 11.191
 STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 12 %
GROWTH AT 12%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 51.2 57.34 64.225 71.93 80.564 90.232 101.06 113.19 126.77 141.98 159.02
SUNDRY DEBTORS 14.06 15.75 17.637 19.75 22.124 24.779 27.752 31.082 34.812 38.989 43.668
CASH AND BANK 17.07 19.12 21.413 23.98 26.86 30.083 33.693 37.736 42.265 47.336 53.017
LOANS AND ADVANCES 56.72 63.53 71.15 79.69 89.25 99.96 111.96 125.39 140.44 157.29 176.16
TOTAL CURRENT ASSETS 139.05 155.7 174.42 195.4 218.8 245.05 274.46 307.4 344.28 385.6 431.87
CURRENT LIABILITIES 46.9 52.53 58.831 65.89 73.798 82.654 92.572 103.68 116.12 130.06 145.66
PROVISIONS 22.17 24.83 27.81 31.15 34.885 39.071 43.76 49.011 54.892 61.479 68.857
TOTAL CURRENT LIABILITIES 69.07 77.36 86.641 97.04 108.68 121.72 136.33 152.69 171.01 191.54 214.52
WORKING CAPITAL 69.98 78.38 87.783 98.32 110.11 123.33 138.13 154.7 173.27 194.06 217.35
CHANGE IN WC 8.398 9.4053 10.53 11.798 13.214 14.799 16.575 18.564 20.792 23.287

STATEMENT SHOWING CHANGE IN WORKING CAPITAL AT 15 %

GROWTH AT 15%
PARTICULARS BASE 1 2 3 4 5 6 7 8 9 10
INVENTORIES 51.2 58.88 67.712 77.87 89.549 102.98 118.43 136.19 156.62 180.12 207.13
SUNDRY DEBTORS 14.06 16.17 18.594 21.38 24.591 28.28 32.522 37.4 43.01 49.461 56.881
CASH AND BANK 17.07 19.63 22.575 25.96 29.856 34.334 39.484 45.407 52.218 60.05 69.058
LOANS AND ADVANCES 56.72 65.23 75.012 86.26 99.204 114.08 131.2 150.88 173.51 199.53 229.46
TOTAL CURRENT ASSETS 139.05 159.9 183.89 211.5 243.2 279.68 321.63 369.88 425.36 489.16 562.53
CURRENT LIABILITIES 46.9 53.94 62.025 71.33 82.028 94.333 108.48 124.75 143.47 164.99 189.74
PROVISIONS 22.17 25.5 29.32 33.72 38.775 44.592 51.281 58.973 67.819 77.991 89.69
TOTAL CURRENT LIABILITIES 69.07 79.43 91.345 105 120.8 138.92 159.76 183.73 211.29 242.98 279.43
WORKING CAPITAL 69.98 80.48 92.549 106.4 122.4 140.75 161.87 186.15 214.07 246.18 283.11
CHANGE IN WC 10.5 12.072 13.88 15.965 18.359 21.113 24.28 27.922 32.111 36.927
ROCE
 BIRLA CORPORATION Ltd.
Mar-97 Mar-97 Mar-97
pbit capital_employed pbit/capital_employed*100
52.75 559.57 9.426881355

Mar-98 Mar-98 Mar-98

pbit capital_employed pbit/capital_employed*100
-5.55 560.9 -0.99

Mar-99 Mar-99 Mar-99

pbit capital_employed pbit/capital_employed*100
0.12 516.45 0.02

Mar-00 Mar-00 Mar-00

pbit capital_employed pbit/capital_employed*100
14.37 502.94 2.86

Mar-01 Mar-01 Mar-01

pbit capital_employed pbit/capital_employed*100
30.63 524.88 5.84

Mar-02 Mar-02 Mar-02

pbit capital_employed pbit/capital_employed*100
35.52 482.59 7.36

Mar-03 Mar-03 Mar-03

pbit capital_employed pbit/capital_employed*100
38.25 486.67 7.86

Mar-04 Mar-04 Mar-04

pbit capital_employed pbit/capital_employed*100
66.71 453.51 14.71

Mar-05 Mar-05 Mar-05

pbit capital_employed pbit/capital_employed*100
115.36 544.04 21.20

Mar-06 Mar-06 Mar-06

pbit capital_employed pbit/capital_employed*100
157.68 646.5 24.39
avg roce 9.27
 MADRAS Cements Ltd.
Mar-97 Mar-97 Mar-97
pbit capital_employed pbit/capital_employed*100
109.12 709.57 15.38

Mar-98 Mar-98 Mar-98

pbit capital_employed pbit/capital_employed*100
115.33 803.93 14.35

Mar-99 Mar-99 Mar-99

pbit capital_employed pbit/capital_employed*100
114.21 771.18 14.81

Mar-00 Mar-00 Mar-00

pbit capital_employed pbit/capital_employed*100
105.51 920.58 11.46

Mar-01 Mar-01 Mar-01

pbit capital_employed pbit/capital_employed*100
123.18 1131.43 10.89

Mar-02 Mar-02 Mar-02

pbit capital_employed pbit/capital_employed*100
119.91 1000.82 11.98

Mar-03 Mar-03 Mar-03

pbit capital_employed pbit/capital_employed*100
91.06 974.5 9.34

Mar-04 Mar-04 Mar-04

pbit capital_employed pbit/capital_employed*100
105.3 906.88 11.61

Mar-05 Mar-05 Mar-05

pbit capital_employed pbit/capital_employed*100
97.01 1025.81 9.46

Mar-06 Mar-06 Mar-06

pbit capital_employed pbit/capital_employed*100
151.57 995.62 15.22
avg roce 12.45
 KCP cements Ltd.
Mar-97 Mar-97 Mar-97
pbit capital_employed pbit/capital_employed*100
68.16 154.16 44.21

Mar-98 Mar-98 Mar-98

pbit capital_employed pbit/capital_employed*100
13.45 194.35 6.92

Mar-99 Mar-99 Mar-99

pbit capital_employed pbit/capital_employed*100
16.21 199.76 8.11

Mar-00 Mar-00 Mar-00

pbit capital_employed pbit/capital_employed*100
5.7 195.19 2.92

Mar-01 Mar-01 Mar-01

pbit capital_employed pbit/capital_employed*100
18.42 171.18 10.76

Mar-02 Mar-02 Mar-02

pbit capital_employed pbit/capital_employed*100
20.39 157.51 12.94

Mar-03 Mar-03 Mar-03

pbit capital_employed pbit/capital_employed*100
4.35 152.57 2.85

Mar-04 Mar-04 Mar-04

pbit capital_employed pbit/capital_employed*100
7.19 149.38 4.81

Mar-05 Mar-05 Mar-05

pbit capital_employed pbit/capital_employed*100
19.51 146.02 13.36

Mar-06 Mar-06 Mar-06

pbit capital_employed pbit/capital_employed*100
29.29 169.85 17.24
avg roce 12.412
 CHETTINAD Cements Ltd.
Mar-97 Mar-97 Mar-97
pbit capital_employed pbit/capital_employed*100
48.45 269.52 17.98

Mar-98 Mar-98 Mar-98

pbit capital_employed pbit/capital_employed*100
43.2 317.65 13.60

Mar-99 Mar-99 Mar-99

pbit capital_employed pbit/capital_employed*100
40.9 314.54 13.00

Mar-00 Mar-00 Mar-00

pbit capital_employed pbit/capital_employed*100
34.43 303.66 11.34

Mar-01 Mar-01 Mar-01

pbit capital_employed pbit/capital_employed*100
32.53 440.86 7.38

Mar-02 Mar-02 Mar-02

pbit capital_employed pbit/capital_employed*100
28.52 464.36 6.14

Mar-03 Mar-03 Mar-03

pbit capital_employed pbit/capital_employed*100
22.72 442.24 5.14

Mar-04 Mar-04 Mar-04

pbit capital_employed pbit/capital_employed*100
54.37 422 12.88

Mar-05 Mar-05 Mar-05

pbit capital_employed pbit/capital_employed*100
63.9 474.14 13.48

Mar-06 Mar-06 Mar-06

pbit capital_employed pbit/capital_employed*100
83.57 479.33 17.43
avg roce 11.84
 India cements Ltd.
Mar-97 Mar-97 Mar-97
pbit capital_employed pbit/capital_employed*100
131 1027.57 12.75

Mar-98 Mar-98 Mar-98

pbit capital_employed pbit/capital_employed*100
147.65 1514.22 9.75

Mar-99 Mar-99 Mar-99

pbit capital_employed pbit/capital_employed*100
238.88 2079 11.5

Mar-00 Mar-00 Mar-00

pbit capital_employed pbit/capital_employed*100
217.72 2411.9 9.02

Mar-01 Mar-01 Mar-01

pbit capital_employed pbit/capital_employed*100
241.35 2615.06 9.23

Mar-02 Mar-02 Mar-02

pbit capital_employed pbit/capital_employed*100
197.88 2413.21 8.2

Mar-03 Mar-03 Mar-03

pbit capital_employed pbit/capital_employed*100
-48.69 2197.17 -2.22

Mar-04 Mar-04 Mar-04

pbit capital_employed pbit/capital_employed*100
48.95 2432.16 2.01

Mar-05 Mar-05 Mar-05

pbit capital_employed pbit/capital_employed*100
138.08 2350.25 5.86

Mar-06 Mar-06 Mar-06

pbit capital_employed pbit/capital_employed*100
198.9 2411.23 8.25
avg roce 7.435
Expenses Percentage
 BIRLA CORPORATION LTD.
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
Year 06(12) 05(12) 04(12) 03(12) 02(12) 01(12) 00(12) 99(12) 98(12) 97(12 Average
Net Sales 1,216.50 1,131.04 973 944.51 959.25 868.46 853.87 744.66 828.32 901.47
Total Expenditure 1,026.30 1,005.72 913.67 895.62 909.95 825.46 833.53 738.72 819.98 856.73
exp as % of sales 84.36498 88.91993 93.90236 94.82377 94.86057 95.04871 97.6179 99.20232 98.99314 95.037 94.28
CHETTINAD CEMENTS LTD.
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
Year 06(12) 05(12) 04(12) 03(12) 02(12) 01(12) 00(12) 99(12) 98(12) 97(12 Average
Net Sales 485.49 427.77 324.77 266.19 201.81 185.1 199.28 196 211.65 207.03
Total Expenditure 423.4 360.62 244.59 223.29 165.41 139.7 138.66 138.15 147.47 147.66
exp as % of sales 87.21086 84.30231 75.31176 83.88369 81.96323 75.47272 69.58049 70.48469 69.67635 71.323 76.92
MADRAS CEMENTS LTD.
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
Year 06(12) 05(12) 04(12) 03(12) 02(12) 01(12) 00(12) 99(12) 98(12) 97(12 Average
Net sales 1,009.10 738.98 695.32 626.14 706.3 618.34 513.65 521.03 487.32 415.24
Total expenditure 795.72 597.28 521.42 476.17 528.38 449.1 379.23 350.77 348.72 282.07
exp as % of sales 78.85442 80.82492 74.98993 76.04849 74.80957 72.62994 73.83043 67.32242 71.55873 67.92939 73.88
K.C.P.LTD
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
Year 06(12) 05(12) 04(12) 03(12) 02(12) 01(12) 00(12) 99(12) 98(12) 97(12 Average
Net Sales 165.58 136.73 117.43 114.39 113.02 115.47 108.38 160.31 124.93 137.84
Total Expenditure 145.84 122.01 109.41 105.38 99.6 96.89 109.89 140.18 116.42 125.84
exp as % of sales 88.07827 89.23426 93.1704 92.12344 88.126 83.90924 101.3932 87.44308 93.18819 91.29425 90.80
 INDIA CEMENTS LTD.
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
Year 06(12) 05(12) 04(12) 03(12) 02(12) 01(12) 00(12) 99(12) 98(12) 97(12 Average
Net Sales 1,541.75 1,162.14 1,016.90 851.58 1,019.11 1,256.95 1,194.85 1,156.67 771.01 728.36
Total Expenditure 1,258.55 1,031.87 915.06 801.55 847.96 945.36 955.5 890.81 623.68 592.61
exp as % of sales 81.63126 88.79051 89.98525 94.12504 83.20593 75.21063 79.9682 77.01505 80.8913 81.36224 83.22

Avg of four companies

CHETTINAD 76.92
BIRLA CEMNTS 94.28
KCP 90.8
MADRAS 73.88
INDIA CEMENTS 83.22
cogs% 82.63
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 2 3 4 5 6 7 8 9 10
sales 1,216.50 1277.33 1341.19 1408.25 1478.66 1552.60 1630.23 1711.74 1797.32 1887.19 1981.55
cogs 1,026.30 1047.41 1099.78 1154.77 1212.50 1273.13 1336.79 1403.62 1473.81 1547.50 1624.87
ebit 190.2 229.92 241.41 253.49 266.16 279.47 293.44 308.11 323.52 339.69 356.68
growth at 8%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,216.50 1313.82 1418.93 1532.44 1655.03 1787.44 1930.43 2084.87 2251.66 2431.79 2626.33
cogs 1,026.30 1077.33 1163.52 1256.60 1357.13 1465.70 1582.95 1709.59 1846.36 1994.07 2153.59
ebit 190.2 236.49 255.41 275.84 297.91 321.74 347.48 375.28 405.30 437.72 472.74
growth at 12%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,216.50 1362.48 1525.98 1709.09 1914.19 2143.89 2401.16 2689.29 3012.01 3373.45 3778.26
cogs 1,026.30 1117.23 1251.30 1401.46 1569.63 1757.99 1968.95 2205.22 2469.85 2766.23 3098.18
ebit 190.2 245.25 274.68 307.64 344.55 385.90 432.21 484.07 542.16 607.22 680.09
growth at 15%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,216.50 1398.98 1608.82 1850.14 2127.67 2446.82 2813.84 3235.91 3721.30 4279.50 4921.42
cogs 1,026.30 1147.16 1319.23 1517.12 1744.69 2006.39 2307.35 2653.45 3051.47 3509.19 4035.57
ebit 190.2 251.82 289.59 333.03 382.98 440.43 506.49 582.46 669.83 770.31 885.86
Chettinad Cements ltd.
growth at 5%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 485.49 509.76 535.25 562.02 590.12 619.62 650.60 683.13 717.29 753.15 790.81
cogs 423.4 418.01 438.91 460.85 483.90 508.09 533.49 560.17 588.18 617.59 648.47
ebit 62.09 91.76 96.35 101.16 106.22 111.53 117.11 122.96 129.11 135.57 142.35
growth at 8%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 485.49 485.49 485.49 485.49 485.49 485.49 485.49 485.49 485.49 485.49 485.49
cogs 423.4 398.10 398.10 398.10 398.10 398.10 398.10 398.10 398.10 398.10 398.10
ebit 62.09 87.39 87.39 87.39 87.39 87.39 87.39 87.39 87.39 87.39 87.39
growth at 12%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 485.49 543.75 609.00 682.08 763.93 855.60 958.27 1073.26 1202.06 1346.30 1507.86
cogs 423.4 445.87 499.38 559.30 626.42 701.59 785.78 880.08 985.69 1103.97 1236.44
ebit 62.09 97.87 109.62 122.77 137.51 154.01 172.49 193.19 216.37 242.33 271.41
growth at 15%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 485.49 558.31 642.06 738.37 849.13 976.49 1122.97 1291.41 1485.13 1707.89 1964.08
cogs 423.4 457.82 526.49 605.46 696.28 800.72 920.83 1058.96 1217.80 1400.47 1610.54
ebit 62.09 100.50 115.57 132.91 152.84 175.77 202.13 232.45 267.32 307.42 353.53
India cements Ltd
PROJECTION OF SALES AND COST OF GOODS SOLD FOR TEN YEARS
growth at 5%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,541.75 1618.84 1699.78 1784.77 1874.01 1967.71 2066.09 2169.40 2277.87 2391.76 2511.35
cogs 1,258.55 1327.45 1393.82 1463.51 1536.69 1613.52 1694.20 1778.91 1867.85 1961.24 2059.31
ebit 283.2 291.39 305.96 321.26 337.32 354.19 371.90 390.49 410.02 430.52 452.04
growth at 8%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,541.75 1665.09 1798.30 1942.16 2097.53 2265.34 2446.56 2642.29 2853.67 3081.97 3328.52
cogs 1,258.55 1365.37 1474.60 1592.57 1719.98 1857.58 2006.18 2166.68 2340.01 2527.21 2729.39
ebit 283.2 299.72 323.69 349.59 377.56 407.76 440.38 475.61 513.66 554.75 599.13
growth at 12%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,541.75 1726.76 1933.97 2166.05 2425.97 2717.09 3043.14 3408.32 3817.32 4275.39 4788.44
cogs 1,258.55 1415.94 1585.86 1776.16 1989.30 2228.01 2495.38 2794.82 3130.20 3505.82 3926.52
ebit 283.2 310.82 348.11 389.89 436.68 489.08 547.77 613.50 687.12 769.57 861.92
growth at 15%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,541.75 1773.01 2038.96 2344.81 2696.53 3101.01 3566.16 4101.09 4716.25 5423.69 6237.24
cogs 1,258.55 1453.87 1671.95 1922.74 2211.15 2542.83 2924.25 3362.89 3867.32 4447.42 5114.54
ebit 283.2 319.14 367.01 422.07 485.38 558.18 641.91 738.20 848.92 976.26 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 2 3 4 5 6 7 8 9 10
sales 1,009.10 1059.56 1112.53 1168.16 1226.57 1287.90 1352.29 1419.91 1490.90 1565.45 1643.72
cogs 795.72 868.84 912.28 957.89 1005.79 1056.07 1108.88 1164.32 1222.54 1283.67 1347.85
ebit 213.38 190.72 200.26 210.27 220.78 231.82 243.41 255.58 268.36 281.78 295.87
growth at 8%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,009.10 1089.83 1177.01 1271.18 1372.87 1482.70 1601.31 1729.42 1867.77 2017.20 2178.57
cogs 795.72 893.66 965.15 1042.36 1125.75 1215.81 1313.08 1418.12 1531.57 1654.10 1786.43
ebit 213.38 196.17 211.86 228.81 247.12 266.89 288.24 311.30 336.20 363.10 392.14
growth at 12%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,009.10 1130.19 1265.82 1417.71 1587.84 1778.38 1991.78 2230.80 2498.49 2798.31 3134.11
cogs 795.72 926.76 1037.97 1162.52 1302.03 1458.27 1633.26 1829.25 2048.77 2294.62 2569.97
ebit 213.38 203.43 227.85 255.19 285.81 320.11 358.52 401.54 449.73 503.70 564.14
growth at 15%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 1,009.10 1160.47 1334.53 1534.71 1764.92 2029.66 2334.11 2684.23 3086.86 3549.89 4082.37
cogs 795.72 951.58 1094.32 1258.47 1447.24 1664.32 1913.97 2201.07 2531.23 2910.91 3347.55
ebit 213.38 208.88 240.22 276.25 317.69 365.34 420.14 483.16 555.63 638.98 734.83
K.C.P.ltd
PROJECTION OF SALES AND COST OF GOODS SOLD FOR TEN YEARS
growth at 5%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 165.58 173.86 182.55 191.68 201.26 211.33 221.89 232.99 244.64 256.87 269.71
cogs 145.84 142.56 149.69 157.18 165.04 173.29 181.95 191.05 200.60 210.63 221.16
ebit 19.74 31.29 32.86 34.50 36.23 38.04 39.94 41.94 44.03 46.24 48.55
growth at 8%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 165.58 178.83 191.34 204.74 219.07 234.40 250.81 268.37 287.16 307.26 328.77
cogs 145.84 146.64 156.90 167.89 179.64 192.21 205.67 220.06 235.47 251.95 269.59
ebit 19.74 32.19 34.44 36.85 39.43 42.19 45.15 48.31 51.69 55.31 59.18
growth at 12%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 165.58 185.45 207.70 232.63 260.54 291.81 326.83 366.04 409.97 459.17 514.27
cogs 145.84 152.07 170.32 190.75 213.65 239.28 268.00 300.16 336.18 376.52 421.70
ebit 19.74 33.38 37.39 41.87 46.90 52.53 58.83 65.89 73.79 82.65 92.57
growth at 15%
cogs at 82%
particulars base 2006 1 2 3 4 5 6 7 8 9 10
sales 165.58 190.42 218.98 251.83 289.60 333.04 383.00 440.45 506.51 582.49 669.86
cogs 145.84 156.14 179.56 206.50 237.47 273.09 314.06 361.17 415.34 477.64 549.29
ebit 19.74 34.28 39.42 45.33 52.13 59.95 68.94 79.28 91.17 104.85 120.58
FCFF
 FCFF OF BIRLA CEMENTS

terminal
GROWTH AT 5% value
PARTICULARS BASE(06) 1 2 3 4 5 6 7 8 9 10
SALES 1,216.50 1277.33 1341.19 1408.25 1478.66 1552.60 1630.23 1711.74 1797.32 1887.19 1981.55
COGS 1,026.30 1077.62 1131.50 1188.07 1247.47 1309.85 1375.34 1444.11 1516.31 1592.13 1671.73
EBIT 190.2 199.71 209.6955 220.18028 231.1893 242.7488 254.8862 267.6305 281.012 295.0626 309.8158
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 133.14 139.80 146.79 154.13 161.83 169.92 178.42 187.34 196.71 206.54 216.87 216.87
LESS:-NET CAPEX 500.23 525.24 551.50 579.08 608.03 638.43 670.36 703.87 739.07 0.00
LESS:-CHANGE IN WC 0.486 0.5103 0.535815 0.562606 0.590736 0.620273 0.651286 0.683851 0.718043 0
FCFF 133.14 -360.92 -378.96 -397.91 -417.81 -438.70 -460.63 -483.67 -507.85 -533.24 216.87 17776.31
value of firm 6350.54
value of debt 271.78
value of equity 6078.76
value of equity per
share=6078.76*10000000)/77005347 789.39453
 terminal
GROWTH AT 8% value
PARTICULARS BASE(06) 1 2 3 4 5 6 7 8 9 10
SALES 1,216.50 1313.82 1418.93 1532.44 1655.03 1787.44 1930.43 2084.87 2251.66 2431.79 2626.33
COGS 1,026.30 1108.40 1197.08 1292.84 1396.27 1507.97 1628.61 1758.90 1899.61 2051.58 2215.70
EBIT 190.2 205.42 221.849 239.5972 258.765 279.466 301.8235 325.969 352.047 380.211 410.6275
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 133.14 143.79 155.29 167.72 181.14 195.63 211.28 228.18 246.43 266.15 287.44 287.44
LESS:-NET CAPEX 500.23 540.25 583.47 630.15 680.56 735.00 793.80 857.31 925.89 0.00
LESS:-CHANGE IN
WC 0.7776 0.83981 0.906993 0.97955 1.05792 1.14255 1.23395 1.33267 1.43928 0
-
FCFF 133.14 -357.22 -385.79 -416.66 -449.99 -485.99 -524.87 -566.86 -612.21 -661.18 287.44 16148.27
-
Value of firm 11395.39
value of debt 271.78
-
value of equity 11667.17
value of equity per share=(- -
11667.17*10000000)/77005347 1515.112
 terminal
GROWTH AT 12% value
PARTICULARS BASE(06) 1 2 3 4 5 6 7 8 9 10
SALES 1,216.50 1362.48 1525.98 1709.09 1914.19 2143.89 2401.16 2689.29 3012.01 3373.45 3778.26
COGS 1,026.30 1149.46 1287.39 1441.88 1614.90 1808.69 2025.73 2268.82 2541.08 2846.01 3187.53
EBIT 190.2 213.024 238.5869 267.21731 299.2834 335.1974 375.4211 420.4716 470.9282 527.4396 590.7323
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 133.14 149.12 167.01 187.05 209.50 234.64 262.79 294.33 329.65 369.21 413.51 413.51
LESS:-NET CAPEX 500.23 560.26 627.49 702.79 787.12 881.58 987.37 1105.85 1238.55 0.00
LESS:-CHANGE IN WC 1.1664 1.306368 1.4631322 1.638708 1.835353 2.055595 2.302267 2.578539 2.887963 0
FCFF 133.14 -352.28 -394.55 -441.90 -494.93 -554.32 -620.84 -695.34 -778.78 -872.23 413.51 -7154.15

value of firm -7181.73

value of debt 271.78
value of equity -7453.51
value of equity per share=(- -
7453.51*10000000)/77005347 967.9211
 terminal
GROWTH AT 15% value
PARTICULARS BASE(06) 1 2 3 4 5 6 7 8 9 10
SALES 1,216.50 1398.98 1608.82 1850.14 2127.67 2446.82 2813.84 3235.91 3721.30 4279.50 4921.42
COGS 1,026.30 1180.25 1357.28 1560.87 1795.01 2064.26 2373.89 2729.98 3139.48 3610.40 4151.96
EBIT 190.2 218.73 251.5395 289.27043 332.661 382.5601 439.9442 505.9358 581.8261 669.1001 769.4651
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 133.14 153.11 176.08 202.49 232.86 267.79 307.96 354.16 407.28 468.37 538.63 538.63
LESS:-NET CAPEX 500.23 575.26 661.55 760.79 874.91 1006.14 1157.06 1330.62 1530.22 0.00
LESS:-CHANGE IN WC 1.458 1.6767 1.928205 2.217436 2.550051 2.932559 3.372443 3.878309 4.460055 0
FCFF 133.14 -348.58 -400.86 -460.99 -530.14 -609.66 -701.11 -806.28 -927.22 -1066.31 538.63 -6134.74
value of firm -7007.98
value of debt 271.78
value of equity -7279.76
value of equity per share=(- -
7279.76*10000000)/77005347 945.3577
 CHETTINAD CEMENTS Ltd.

terminal
GROWTH AT 5% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 485.49 509.76 535.25 562.02 590.12 619.62 650.60 683.13 717.29 753.15 790.81
COGS 423.4 444.57 466.80 490.14 514.65 540.38 567.40 595.77 625.55 656.83 689.67
EBIT 62.09 65.1945 68.45423 71.87694 75.47078 79.24432 83.20654 87.36687 91.73521 96.32197 101.1381
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 43.46 45.64 47.92 50.31 52.83 55.47 58.24 61.16 64.21 67.43 70.80
LESS:-NET CAPEX 479.48 503.45 528.63 555.06 582.81 611.95 642.55 674.68 708.41 0.00
LESS:-CHANGE IN WC 3.609 3.78945 3.978923 4.177869 4.386762 4.6061 4.836405 5.078225 5.332137 0
FCFF 43.46 -437.45 -459.33 -482.29 -506.41 -531.73 -558.31 -586.23 -615.54 -646.32 70.80 2178.36
value of firm -2286.66
value of debt 304.91
value of equity -2591.57
value of equity per share=(- -
2558.44*10000000)/29503350 86.71693214
 terminal
GROWTH AT 8% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 485.49 524.33 566.28 611.58 660.50 713.34 770.41 832.04 898.61 970.50 1048.14
COGS 423.4 457.27 493.85 533.36 576.03 622.11 671.88 725.63 783.68 846.38 914.09
EBIT 62.09 67.0572 72.42178 78.21552 84.47276 91.23058 98.52903 106.4113 114.9243 124.1182 134.0477
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 43.46 46.94 50.70 54.75 59.13 63.86 68.97 74.49 80.45 86.88 93.83 287.44
LESS:-NET CAPEX 479.48 517.84 559.27 604.01 652.33 704.51 760.87 821.74 887.48 0.00
LESS:-CHANGE IN WC 5.7744 6.236352 6.73526 7.274081 7.856007 8.484488 9.163247 9.896307 10.68801 0
FCFF 43.46 -438.31 -473.38 -511.25 -552.15 -596.32 -644.03 -695.55 -751.19 -811.29 93.83 37533.34
value of firm 12124.93
value of debt 304.91
value of equity 11820.02
value of equity per
share=(11820.02*10000000)/29503350 400.6331484
 terminal
GROWTH AT 12% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 485.49 543.75 609.00 682.08 763.93 855.60 958.27 1073.26 1202.06 1346.30 1507.86
COGS 423.4 474.21 531.11 594.85 666.23 746.18 835.72 936.00 1048.32 1174.12 1315.02
EBIT 62.09 69.5408 77.8857 87.23198 97.69982 109.4238 122.5547 137.2612 153.7326 172.1805 192.8421
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 43.46 48.68 54.52 61.06 68.39 76.60 85.79 96.08 107.61 120.53 134.99 413.51
LESS:-NET CAPEX 479.48 537.02 601.46 673.63 754.47 845.01 946.41 1059.98 1187.17 0.00
LESS:-CHANGE IN WC 8.6616 9.700992 10.86511 12.16892 13.6292 15.2647 17.09646 19.14804 21.4458 0
FCFF 43.46 -439.46 -492.20 -551.26 -617.41 -691.50 -774.48 -867.42 -971.51 -1088.09 413.51 10337.75
value of firm 306.35
value of debt 304.91
value of equity 1.44
value of equity per
share=(1.44*10000000)/29503350 4.880801672
 terminal
GROWTH AT 15% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 485.49 558.31 642.06 738.37 849.13 976.49 1122.97 1291.41 1485.13 1707.89 1964.08
COGS 423.4 486.91 559.95 643.94 740.53 851.61 979.35 1126.25 1295.19 1489.47 1712.89
EBIT 62.09 71.4035 82.11403 94.43113 108.5958 124.8852 143.6179 165.1606 189.9347 218.4249 251.1887
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 43.46 49.98 57.48 66.10 76.02 87.42 100.53 115.61 132.95 152.90 175.83 538.63
LESS:-NET CAPEX 479.48 551.40 634.11 729.23 838.61 964.41 1109.07 1275.43 1466.74 0.00
LESS:-CHANGE IN
WC 10.827 12.45105 14.31871 16.46651 18.93649 21.77696 25.04351 28.80004 33.12004 0
FCFF 43.46 -440.32 -506.37 -582.33 -669.68 -770.13 -885.65 -1018.50 -1171.27 -1346.96 538.63 13465.75
value of firm 1153.89
value of debt 304.91
value of equity 848.98
value of equity per
share=(848.98*10000000)/29503350 287.757153
 INDIA CEMENTS LTD.

terminal
GROWTH AT 5% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,541.75 1618.84 1699.78 1784.77 1874.01 1967.71 2066.09 2169.40 2277.87 2391.76 2511.35
COGS 1,258.55 1321.48 1387.55 1456.93 1529.78 1606.26 1686.58 1770.91 1859.45 1952.42 2050.05
EBIT 283.2 297.36 312.228 327.8394 344.2314 361.4429 379.5151 398.4908 418.4154 439.3362 461.303
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 198.24 208.15 218.56 229.49 240.96 253.01 265.66 278.94 292.89 307.54 322.91 322.61
LESS:-NET CAPEX 104.20 109.41 114.88 120.62 126.66 132.99 139.64 146.62 153.95 0.00
LESS:-CHANGE IN WC 56.2685 59.08193 62.03602 65.13782 68.39471 71.81445 75.40517 79.17543 83.1342 0
FCFF 198.24 47.68 50.07 52.57 55.20 57.96 60.86 63.90 67.10 70.45 322.61 8105.78

value of firm 3625.04

value of debt 368.94
value of equity 3256.10
value of equity per
share=(3256.1*10000000)/220373657 147.75
 terminal
GROWTH AT 8% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,541.75 1665.09 1798.30 1942.16 2097.53 2265.34 2446.56 2642.29 2853.67 3081.97 3328.52
COGS 1,258.55 1365.37 1474.60 1592.57 1719.98 1857.58 2006.18 2166.68 2340.01 2527.21 2729.39
EBIT 283.2 299.7162 323.6935 349.589 377.5561 407.7606 440.3814 475.6119 513.6609 554.7538 599.1341
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 198.24 209.80 226.59 244.71 264.29 285.43 308.27 332.93 359.56 388.33 419.39 385.71
LESS:-NET CAPEX 166.72 180.06 194.46 210.02 226.82 244.97 264.56 285.73 308.59 0.00
LESS:-CHANGE IN WC 90.0296 97.23197 105.0105 113.4114 122.4843 132.283 142.8657 154.2949 166.6385 0
FCFF 198.24 -46.95 -50.70 -54.76 -59.14 -63.87 -68.98 -74.50 -80.46 -86.90 419.39 42795.29
value of firm 16421.52
value of debt 368.94
value of equity 16052.58
value of equity per
share=(16052.58*10000000)/220373657 728.43
 terminal
GROWTH AT 12% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,541.75 1726.76 1933.97 2166.05 2425.97 2717.09 3043.14 3408.32 3817.32 4275.39 4489.16
COGS 1,258.55 1409.58 1578.73 1768.17 1980.35 2218.00 2484.15 2782.25 3116.12 3490.06 3908.87
EBIT 283.2 317.184 355.2461 397.8756 445.6207 499.0952 558.9866 626.065 701.1928 785.3359 580.2986
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 198.24 222.03 248.67 278.51 311.93 349.37 391.29 438.25 490.83 549.74 406.21 406.21
LESS:-NET CAPEX 250.08 280.09 313.70 351.34 393.50 440.72 493.61 552.84 619.19 0.00
LESS:-CHANGE IN WC 135.0444 151.2497 169.3997 189.7277 212.495 237.9944 266.5537 298.5401 334.365 0
FCFF 198.24 -163.09 -182.67 -204.59 -229.14 -256.63 -287.43 -321.92 -360.55 -403.82 406.21 -13450.66
value of firm -6557.47
value of debt 368.94
value of equity -6926.41
value of equity per share=(-
6926.41*10000000)/220373657 -314.30
 MADRAS CEMENTS

terminal
GROWTH AT 5% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,009.10 1059.56 1112.53 1168.16 1226.57 1287.90 1352.29 1419.91 1490.90 1565.45 1643.72
COGS 795.72 868.84 912.28 957.89 1005.79 1056.07 1108.88 1164.32 1222.54 1283.67 1347.85
EBIT 213.38 190.7199 200.2559 210.2687 220.7821 231.8212 243.4123 255.5829 268.3621 281.7802 295.8692
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 149.37 133.50 140.18 147.19 154.55 162.27 170.39 178.91 187.85 197.25 207.11
LESS:-NET CAPEX 989.89 1039.38 1091.35 1145.92 1203.22 1263.38 1326.55 1392.87 1462.52 0.00
LESS:-CHANGE IN WC 4.9185 5.164425 5.422646 5.693779 5.978467 6.277391 6.59126 6.920823 7.266865 0
FCFF 149.37 -861.30 -904.37 -949.59 -997.07 -1046.92 -1099.27 -1154.23 -1211.94 -1272.54 207.11 6680.92
value of firm -3469.72
value of debt 602.44
value of equity -4072.16
value of equity per share=(-
4072.16*10000000)/12077850 -3371.59
 terminal
GROWTH AT 8% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,009.10 1089.83 1177.01 1271.18 1372.87 1482.70 1601.31 1729.42 1867.77 2017.20 2178.57
COGS 795.72 893.66 965.15 1042.36 1125.75 1215.81 1313.08 1418.12 1531.57 1654.10 1786.43
EBIT 213.38 196.169 211.8626 228.8116 247.1165 266.8858 288.2367 311.2956 336.1993 363.0952 392.1428
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 149.37 137.32 148.30 160.17 172.98 186.82 201.77 217.91 235.34 254.17 274.50
LESS:-NET CAPEX 989.89 1069.08 1154.61 1246.98 1346.73 1454.47 1570.83 1696.50 1832.22 0.00
LESS:-CHANGE IN WC 7.8696 8.499168 9.179101 9.91343 10.7065 11.56302 12.48807 13.48711 14.56608 0
FCFF 149.37 -860.44 -929.28 -1003.62 -1083.91 -1170.62 -1264.27 -1365.41 -1474.65 -1592.62 274.50 274499.97
value of firm 109524.60
value of debt 602.44
value of equity 108922.16
value of equity per
share=(108922.16*10000000)/12077850 90183.40
 terminal
GROWTH AT 12% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,009.10 1130.19 1265.82 1417.71 1587.84 1778.38 1991.78 2230.80 2498.49 2798.31 3134.11
COGS 795.72 926.76 1037.97 1162.52 1302.03 1458.27 1633.26 1829.25 2048.77 2294.62 2569.97
EBIT 213.38 203.4346 227.8467 255.1883 285.8109 320.1082 358.5212 401.5437 449.729 503.6965 564.1401
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 149.37 142.40 159.49 178.63 200.07 224.08 250.96 281.08 314.81 352.59 394.90
LESS:-NET CAPEX 989.89 1108.68 1241.72 1390.72 1557.61 1744.52 1953.87 2188.33 2450.93 0.00
LESS:-CHANGE IN WC 11.8044 13.22093 14.80744 16.58433 18.57445 20.80339 23.29979 26.09577 29.22726 0
FCFF 149.37 -859.29 -962.41 -1077.89 -1207.24 -1352.11 -1514.36 -1696.09 -1899.62 -2127.57 394.90 -10125.59

value of firm -12395.81

value of debt 602.44
value of equity -12998.25
value of equity per share=(-
12998.25*10000000)/12077850 -10762.06
 terminal
GROWTH AT 15% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,009.10 1160.47 1334.53 1534.71 1764.92 2029.66 2334.11 2684.23 3086.86 3549.89 4082.37
COGS 795.72 951.58 1094.32 1258.47 1447.24 1664.32 1913.97 2201.07 2531.23 2910.91 3347.55
EBIT 213.38 208.8837 240.2163 276.2487 317.686 365.3389 420.1397 483.1607 555.6348 638.98 734.827
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 149.37 146.22 168.15 193.37 222.38 255.74 294.10 338.21 388.94 447.29 514.38
LESS:-NET CAPEX 989.89 1138.37 1309.13 1505.50 1731.32 1991.02 2289.68 2633.13 3028.10 0.00
LESS:-CHANGE IN WC 14.7555 16.96883 19.51415 22.44127 25.80746 29.67858 34.13037 39.24992 45.13741 0
FCFF 149.37 -858.43 -987.19 -1135.27 -1305.56 -1501.39 -1726.60 -1985.59 -2283.43 -2625.95 514.38 -7454.77
value of firm -12199.99
value of debt 602.44
value of equity -12802.43
value of equity per share=(-
12802.43*10000000)/12077850 -10599.92
 terminal
GROWTH AT 5% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 165.58 173.86 182.55 191.68 201.26 211.33 221.89 232.99 244.64 256.87 269.71
COGS 145.84 142.56 149.69 157.18 165.04 173.29 181.95 191.05 200.60 210.63 221.16
EBIT 19.74 31.29 32.86 34.502 36.227 38.039 39.941 41.9378 44.0347 46.236 48.54822701
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 13.82 21.91 23.00 24.15 25.36 26.63 27.96 29.36 30.82 32.37 33.98
LESS:-NET CAPEX 68.98 72.43 78.22 84.48 91.24 98.54 106.42 114.94 124.13 0.00
LESS:-CHANGE IN WC 3.499 3.674 3.8576 4.0505 4.2531 4.4657 4.68899 4.92344 5.1696 0
FCFF 13.82 -50.57 -53.10 -57.93 -63.17 -68.87 -75.05 -81.75 -89.03 -96.93 33.98 699.25
value of firm -126.87
value of debt 60.71
value of equity -187.58
value of equity per share=(-
187.58*10000000)/12892116 -145.50
 terminal
GROWTH AT 8% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 165.58 178.83 193.13 208.58 225.27 243.29 262.75 283.78 306.48 331.00 357.47
COGS 145.84 146.64 158.37 171.04 184.72 199.50 215.46 232.70 251.31 271.42 293.13
EBIT 19.74 32.19 34.76 37.545 40.549 43.792 47.296 51.0795 55.1659 59.579 64.34546419
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 13.82 22.53 24.33 26.28 28.38 30.65 33.11 35.76 38.62 41.71 45.04
LESS:-NET CAPEX 68.98 74.50 80.46 86.89 93.85 101.35 109.46 118.22 127.68 o
LESS:-CHANGE IN WC 5.598 6.046 6.53 7.0524 7.6166 8.2259 8.88396 9.59467 10.362 0
FCFF 13.82 -52.05 -56.21 -60.71 -65.56 -70.81 -76.47 -82.59 -89.20 -96.33 45.04 -4991.91

value of firm 479.71

value of debt 60.71
value of equity 419.00
value of equity per
share=(419*10000000)/12892116 325.00
 terminal
GROWTH AT 12% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 165.58 185.45 207.70 232.63 260.54 291.81 326.83 366.04 409.97 459.17 514.27
COGS 145.84 152.07 170.32 190.75 213.65 239.28 268.00 300.16 336.18 376.52 421.70
EBIT 19.74 33.38 37.39 41.873 46.898 52.526 58.829 65.888 73.7946 82.65 92.56794234
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 13.82 23.37 26.17 29.31 32.83 36.77 41.18 46.12 51.66 57.85 64.80
LESS:-NET CAPEX 68.98 77.26 86.53 96.91 108.54 121.57 136.15 152.49 170.79 0.00
LESS:-CHANGE IN WC 8.398 9.405 10.534 11.798 13.214 14.799 16.5754 18.5644 20.792 0
-
FCFF 13.82 -54.01 -60.49 -67.75 -75.88 -84.99 -95.19 -106.61 -119.40 133.73 64.80 3483.74
value of firm 785.00
value of debt 60.71
value of equity 724.29
value of equity per
share=(724.29*10000000)/12892116 561.81
 terminal
GROWTH AT 15% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 165.58 190.42 218.98 251.83 289.60 333.04 383.00 440.45 506.51 582.49 669.86
COGS 145.84 156.14 179.56 206.50 237.47 273.09 314.06 361.17 415.34 477.64 549.29
EBIT 19.74 34.28 39.42 45.329 52.128 59.947 68.939 79.2803 91.1723 104.85 120.575421
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 13.82 23.99 27.59 31.73 36.49 41.96 48.26 55.50 63.82 73.39 84.40 84.40
LESS:-NET CAPEX 68.98 79.33 91.23 104.91 120.65 138.74 159.55 183.49 211.01 0.00
LESS:-CHANGE IN WC 10.5 12.07 13.882 15.965 18.359 21.113 24.2802 27.9222 32.111 0
- -
FCFF 13.82 -55.48 -63.81 -73.38 -84.38 -97.04 111.60 -128.34 -147.59 169.73 84.40 4537.78
value of firm 1096.28
value of debt 60.71
value of equity 1035.57
value of equity per
share=(1035.57*10000000)/12892116 803.26
 terminal
GROWTH AT 15% value
PARTICULARS BASE(2006) 1 2 3 4 5 6 7 8 9 10
SALES 1,541.75 1773.01 2038.96 2344.81 2696.53 3101.01 3566.16 4101.09 4716.25 5423.69 6237.24
COGS 1,258.55 1447.33 1664.43 1914.10 2201.21 2531.39 2911.10 3347.77 3849.93 4427.42 5091.54
EBIT 283.2 325.68 374.532 430.7118 495.3186 569.6164 655.0588 753.3176 866.3153 996.2626 1145.702
TAX 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
EBIT(1-T) 198.24 227.98 262.17 301.50 346.72 398.73 458.54 527.32 606.42 697.38 801.99 801.99
LESS:-NET CAPEX 312.60 359.49 413.41 475.42 546.74 628.75 723.06 831.52 956.25 0.00
LESS:-CHANGE IN WC 168.8055 194.1263 223.2453 256.7321 295.2419 339.5282 390.4574 449.026 516.3799 0
FCFF 198.24 -253.43 -291.44 -335.16 -385.43 -443.25 -509.73 -586.19 -674.12 -775.24 801.99 -13322.09

value of firm 1153.89

value of debt 304.91
value of equity 848.98
value of equity per
share=(848.98*10000000)/29503350 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
st
companies it ROCE stands at 1 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.kcpltd.com
¾ www.birlacorpltd.com
¾ www.madrascement.com
¾ www.nseindia.com
¾ www.bseindia.com