INDUSTRIAL EXPOSURE PROJECT

A Study of cement industry In India

“AMBUJA CEMENT”
Submitted in Partial Fulfillment of the requirements for the
Award of Degree of Bachelor of Business Administration (BBA)

2016-2019

Submitted by: NEHA

Under the guidance of: MR. Shakti Sharma

BHARATI VIDYAPEETHUNIVERSITY
SCHOOL OF DISTANCE EDUCATION,
Academic Study Center – BVIMR, New Delhi

(A Constituent Unit of Bharati Vidyapeeth University

,Pune)AnISO9001:2000CertifiedInstitute

NAAC Re-Accreditation Grade “A” University

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ACKNOWLEDGEMENT

This project is a result of dedicated effort. It gives us immense pleasure to prepare

this is A Study of cement industry In India “AMBUJA CEMENT” We would
like to thank our project guide MR. SHAKTI SHARMA, for consultative help
and constructive suggestions on the matter on this project. We would like to thanks
our parents and colleagues who have helped us in making this project a successful
one.

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DECLARATION

This is to certify that I have completed a Project titled " A Study of cement
industry In India “AMBUJA CEMENT” under the guidance of MR. SHAKTI
SHARMA in the partial fulfillment of the requirement for the award of Bachelors
of Business Administration of BharatiVidyapeeth University, New Delhi. This is
an original piece of work & I have not submitted it earlier elsewhere.

NEHA

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CONTENTS
CHAPTER 1:- Introduction to Company
1.1:- Nature of Business/History
1.2:- Type & Ownership pattern
1.3:- Organisational structure
1.4:- Production Layout
1.5:-Organizational Policies
CHAPTER 2:- Industrial Analysis
2.1:- Industrial Overview
2.2:- Current Issues
2.3:- Key Competitors
2.4:- Environmental Scanning (PESTEL analysis)
2.5:-Porter’s Five Forces Model of Competition
CHAPTER 3:- Marketing Strategy
3.1:- Products of the company
3.2:- 4'Ps
3.3:- STP (Segmenting Targeting and Positioning)
3.4:- Distribution Channels
3.5:- Promotion Strategy
CHAPTER 4:- Financial Analysis
4.1:- Sources of Finances
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4.2:- Ratio Analysis (Any 3)
4.3:-Net Profit or Net Balance Sheet
CHAPTER 5:- Key learning from the company and Recommendations
5.1:- Performance Analysis of the company [Minimum 4-5 lines]
5.2:- Reasons for the diversification of the company
5.3:- Comment on Organizational Leadership
5.4:- Market Share / Growth Rate of the company
5.5:- SWOT Analysis of the company
CHAPTER 6:- Finding
CHAPTER 7:- Conclusion

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1.1 Nature of Business/History:-
NATURE OF AMBUJA CEMENT

ORGANISATION PROFILE

Ambuja Cements Limited (ACL) is India’s leading cement company. It

commenced cement production in 1986. Ambuja Cement is a premier cement
brand in India for Ordinary Portland Cement (OPC) and Pozzolana Portland
Cement (PPC), with a significant footprint across the western, eastern and northern
markets of India. Our customers range from individual house builders (IHBs) to
governments to global construction firms. For 2015, the total cement capacity was
29.65 MTPA, its production 21.54 MT cement and total number of permanent
employees 5622.

NATURE OF COMPANY OWNERSHIP:

Ambuja Cements Limited is a public limited company listed on the Bombay Stock
Exchange Limited and National Stock Exchange of India Limited. The GDRs
issued by the Company are listed on the Luxembourg Stock Exchange.
LafargeHolcim Limited, Switzerland is the majority shareholder with 50.35%
equity. For the detailed shareholding pattern please see the Annual Report on our
website: www.ambujacement.com

INTEGRATED CEMENT PLANTS:

 Ambujanagar, Taluka Kodinar District Gir Somnath, Gujarat

 Darlaghat, District Solan, Himachal Pradesh

 Maratha Cement Works, District Chandrapur, Maharashtra

 Rabriyawas, District Pali, Rajasthan.

 Bhatapara, District Raipur, Chhattisgarh

GRINDING STATIONS:

 Roopnagar (Ropar), Punjab

 Bathinda, Punjab

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 Sankrail, District Howrah, West Bengal

 Roorkee, District Haridwar, Uttaranchal

 Farakka, District Murshidabad, West Bengal

 Dadri, District Gautam Budh Nagar, Uttar Pradesh

 Nalagarh, District Solan, Himachal Pradesh

 Magdalla, District Surat, Gujarat

BULK CEMENT TERMINALS:

 Muldwarka, District Gir Somnath, Gujarat

 Panvel, District Raigad, Maharashtra

 Cochin, Kerala

 Surat, Gujarat

 Mangalore, Karnataka

HISTORY

1981

- The Company was Incorporated on 20th October, as Ambuja Cements Pvt. Ltd.
It was jointly promoted by Gujarat Industrial Investment Corporation Ltd. (GIIC)
and N.S. Sekhsaria and his associates, Vinod K. Neotia and Suresh Mulani, for
setting up a cement project in the joint sector. The Company was converted into a
public limited company on 19th March, 1983 and its name was changed to Gujarat
Ambuja Cements, Ltd., on 19th May, 1983.

- The Company's object is to manufacture cement.

- The Company adopted the latest dry process precalcination technology

incorporating five stage preheater for the main pyro processing system of the
cement plant. For grinding the raw material, the Company undertook to instal the
latest air swept roller mills of polysius design which were extremely energy
efficient.

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- A computerised process control system with field instruments supplied by
Larsen & Tourbo was also being installed to give consistently high quality cement
with maximum productivity.

- In addition, electronic packing machines were being obtained from Haver &
Boecker, West Germany, and reverse air baghouse equipment from Zurn
Industries, USA.

- The company entered into an agreement with Krupp Polysius AG, (KP) West
Germany, for supply of plant, equipment and service for the project, KP agreed to
supply raw material and coal grinding vertical roller mills, homogenising and kiln
feed, burning, cooling and coal firing equipment and pneumatic transport pumps.

- KP have a collaboration agreement with Buckau Wolf India, Ltd. who are
supplying the balance items of the main plant as per KP design. The scope of the
agreement with KP provides for complete engineering of the plant, technical
documentation and information and supervision of erection and commissioning of
the project.

1983

- All shares subscribed for by signatories to the Memorandum of Association,

promoters, etc.

1985

- A letter of intent was received to increase the installed capacity from 7,00,000
tonnes to 14,00,000 tonnes per annum.

- 146,44,500 No. of equity shares issued at par out of which the following shares
were reserved for firm allotment: 38,24,448 shares to GIIC; 21,20,000 shares to
overseas companies of non-resident Indian promoters on repatriation basis and
15,50,052 shares to N.S. Sekhsaria, Vinod K. Neotia and their associates.

- Out of the balance 71,50,000 shares, 28,60,000 shares to non-resident Indians

with repatriation rights and 8,75,500 shares to employees (including Indian
working directors)/workers and business associates of the Company were reserved
for preferential allotment. The remaining 34,14,500 shares were offered for public

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subscription during November. Out of the oversubscription, 33,50,000 shares were
retained and allotted to the public.

1986

- 20,00,000 No. of equity shares issued at par of which 2,00,000 shares allotted to
private promoters and their associates and the balance of 18,00,000 shares offered
and allotted to the equity shareholders as rights in prop. 1:1.

1988

- Production declined marginally to 8,02,301 tonnes due to heavy rains in July-

August 1989 coupled with flash floods on 16th July.

1989

- The 12.6 MW diesel generating sets which were imported during 1988-89 were
commissioned during the year.

1990

- Necessary approvals were received for setting up another cement plant with 1
million tonne capacity per annum at village Suli, Tehsil Arki, District Solan of
Himachal Pradesh.

1991

- In order to meet long-term working capital requirements, the Company issued

10,00,000 - 17.5% secured redeemable non-convertible debentures on private
placement basis. These debentures would be redeemed in three equal annual
instalments commencing at the end of the 6th year from the date of issue of the
debentures, at a prem. of 5% of the face value of the debentures.

- In order to part finance its expansion projects, the Company proposed to issue
52,62,500 No. of equity shares of Rs.10 each at a prem. of Rs.190 per share. Out of
the total issue, 50,00,000 shares were to be offered to the existing equity
shareholders of the Company as rights in the prop. of 1:4 and the balance of
2,62,500 shares were to be offered to the employees, directors and the business
associates of the company.

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- In order to part finance its expansion projects, the Company also proposed to
issue 52,62,500 - 17.5% secured redeemable non-convertible debentures
aggregating to Rs.210.50 crores. Out of the total issue, 50,00,000 debentures were
to be offered to the equity shareholders of the Company on rights basis in the prop.
of 1 debenture for every 4 equity shares held and the balance of 2,62,500
debentures were to be offered to the employees, directors and business associates
of the Company.

- Each non-convertible debenture would be attached with a detachable warrant and

the holder of one such warrant would be entitled to apply for and be allotted one
equity share of the Company at a price of Rs.300 per equity share (Rs.10 towards
face value and Rs.290 as prem.).

- The warrant holders at the time of exercising their right/option to subscribe for
their equity shares entitlement would have further option either to pay a price of
Rs.300 per share of the Company or to surrender the equivalent number of
debentures as subscription for allotment of equity shares.

2001

- The Company has completed the issue of FCCBs of about $100 million issued in
the international markets.

- Gujarat Ambuja Cements Ltd., the fourth largest cement maker in the country,
has closed its issue of secured non-convertible debentures after raising the targeted
Rs 200 crore.

- Gujarat Ambuja Cements Ltd is planning to issue fresh equity shares on a

prefrential basis to non-promoter groups.

- Gujarat Ambuja Cements Ltd (GACL) has received Rs 200 crore from foreign
equity investor, Warburg Pincus, as part of its proposed Rs 360-crore investment in
the form of equity shares and convertible ants.

- The company will buyback shares worth Rs 50 crore at a maximum share price of
Rs 170 per share through the open market route, it said. Gujarat Ambuja Cements
has clocked a 112 per cent rise in net profit at Rs 53.23 crore during the first
quarter of the financial year 2001-02.

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2002

-Commercial production commences at Gujarat Ambuja Cements Maratha Cement

Works plant -Board approves merger of Ambuja Cement Rajasthan with the
company

-Mops up Rs 50 cr by issuing non Convertible Debentures (NCD)

-Allots 80 lacs warrants to Affinity Investments, an Affiliate of Warburg Pincus

Equity Partners L.P

-Securities Appellate Tribunal (SAT) directs Sebi to examine Guj Ambuja deal for
ACC stake

2003

-SEBI finds no violation of Regulation 12 of the SEBI (Substantial Acquisition of

Shares and Takeovers) Regulation, 1997 by Gujarat Ambuja Cements Ltd. with
regard to the ACC deal

-Raises $80 million through External Commercial Borrowings (ECB)

2004

-BIFR sanctions the rehabilitation scheme for merger of Ambuja Cement

Rajasthan with Gujarat Ambuja Cements Ltd.

-Gujarat Ambuja Cements Ltd has informed that Shri NP Ghuwalewala has been
appointed as the Wholetime Director of the Company at the Board meeting held
today on June 28, 2004

2005

- Gujarat Ambuja Cement Ltd - Issue of Bonus shares

- Gujarat Ambuja gives Rs 25 lakh aid for quake victims

-Ambuja Cements has given the Bonus in the Ratio of 1:2

-Company has splits its Face value of Shares from Rs 10 to Rs 2

2006

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- Holcim raises stake in Gujarat Ambuja Cements

- Gujarat Ambuja - Change in Accounting Year

2007

- Company name has been changed from Gujarat Ambuja Cements Ltd to Ambuja
Cements Ltd.

2008

- Ambuja Cements Ltd has appointed Mr. Naresh Chandra as an additional

director.

2009

- The Company launched its knowledge initiative i.e. Ambuja Knowledge

Center,to enable industry professionals get a first-hand feel of the world of cement
and concrete. During the year, three centers became operational in the cities of
Jaipur, Ahmedabad and Kolkata.

-Ambuja Cements - Grant of Stock Option under ESOS

2010

- On 24th February 2010, Ambuja Cements Ltd (ACL) inaugurated its cement
plant (grinding unit) at Dadri, Uttar Pradesh. Capacity: 1.5 million tonnes.

- On 27 March, 2010, Ambuja Cements Ltd (ACL) inaugurated its cement plant
(grinding unit) at Nalagarh, Himachal Pradesh. Capacity: 1.5 million tonnes.

- In December 2010, the Dadri Grinding Unit in its very first year of operation
received the Integrated Management System (IMS) Certification, including ISO
9001:2008, ISO 14001:2004, and OHSAS 18001:2007 by BSI (U.K.).

2011

-Completes 25 years of operation. Celebrates silver jubilee at all integrated plants.

- Achieves water-positive status, as certified by an independent foundation, Det
Norske Veritas. Ambuja Cements gives back to the community double the amount
of water the Company consumes at its facilities.

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- Ambuja Cements Ltd has acquired 85% equity shares of Dang Cement Industries
Pvt. Ltd., Nepal

- Ambuja Cements Ltd has acquired 60% equity shares from the existing
promoters of Dirk India Pvt. Ltd.

2016

-Ambuja Cement won FICCI CSR award 2016 under 'Category 5 - Any Other' for
its exemplary Water Resource Management Program

-Ambuja Cement conferred with the Bombay Chamber Civic Award for social
development

-Ambuja Cement & ACC win prestigious accolades at CII-ITC Sustainability

Awards 2016

1.2 Type and Ownership Pattern:-

Holder's Name No of Shares % Share Holding

ForeignInstitutions 339500795 17.1%

ForeignPromoter 1253156361 63.11%

FinancialInstitutions 161173616 8.12%

GeneralPublic 88058742 4.43%

NBanksMutualFunds 75273612 3.79%

Others 51718526 2.6%

GDR 14007233 0.71%

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CentralGovt 2756344 0.14%

1.3 Organizational Structure:-

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1.4Production Layout
CEMENT MANUFACTURING PROCESS PHASES

Production of cement completes after passing of raw materials from the

following six phases. These are;

1. Raw material extraction/ Quarry

2. Grinding, Proportioning and Blending

3. Pre-heater Phase

4. Kiln Phase

5. Cooling and Final Grinding

6. Packing & Shipping

CEMENT MANUFACTURING PROCESS PHASE 1: RAW MATERIAL

EXTRACTION

Cement uses raw materials that cover calcium, silicon, iron and aluminum.
Such raw materials are limestone, clay and sand. Limestone is for calcium.
It is combined with much smaller proportions of sand and clay. Sand & clay
fulfill the need of silicon, iron and aluminum.

Extraction of raw material and crushing of material

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Generally cement plants are fixed where the quarry of limestone is near
bye. This saves the extra fuel cost and makes cement somehow
economical.  Raw materials are extracted from the quarry and by means of
conveyor belt material is transported to the cement plant.

There are also various other raw materials used for cement manufacturing.
For example shale, fly ash, mill scale and bauxite. These raw materials are
directly brought from other sources because of small requirements.

Before transportation of raw materials to the cement plant, large size rocks
are crushed into smaller size rocks with the help of crusher at quarry.
Crusher reduces the size of large rocks to the size of gravels.

CEMENT MANUFACTURING PROCESS PHASE II: PROPORTIONING,

BLENDING & GRINDING

The raw materials from quarry are now routed in plant laboratory where,
they are analyzed and proper proportioning of limestone and clay are
making possible before the beginning of grinding. Generally, limestone is
80% and remaining 20% is the clay.

Proportioning of raw material at cement plant laboratory

Now cement plant grind the raw mix with the help of heavy wheel type
rollers and rotating table. Rotating table rotates continuously under the
roller and brought the raw mix in contact with the roller. Roller crushes the

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material to a fine powder and finishes the job. Raw mix is stored in a pre-
homogenization pile after grinding raw mix to fine powder.

CEMENT MANUFACTURING PROCESS PHASE III: PRE-HEATING RAW

MATERIAL

After final grinding, the material is ready to face the pre-heating chamber.
Pre-heater chamber consists of series of vertical cyclone from where the
raw material passes before facing the kiln. Pre-heating chamber utilizes the
emitting hot gases from kiln. Pre-heating of the material saves the energy
and make plant environmental friendly.

Preheating of raw material | Vertical cyclone

CEMENT MANUFACTURING PROCESS PHASE IV: KILN PHASE

Kiln is a huge rotating furnace also called as the heart of cement making
process. Here, raw material is heated up to 1450 ⁰C. This temperature
begins a chemical reaction so called decarbonation. In this reaction
material (like limestone) releases the carbon dioxide. High temperature of
kiln makes slurry of the material.

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Rotary kiln

The series of chemical reactions between calcium and silicon dioxide

compounds form the primary constituents of cement i.e., calcium silicate.
Kiln is heating up from the exit side by the use of natural gas and coal.
When material reaches the lower part of the kiln, it forms the shape of
clinker.

CEMENT MANUFACTURING PROCESS PHASE V: COOLING AND

FINAL GRINDING

After passing out from the kiln, clinkers are cooled by mean of forced air.
Clinker released the absorb heat and cool down to lower temperature.
Released heat by clinker is reused by recirculating it back to the kiln. This
too saves energy.

Clinker cooling | Cement making process

Final process of 5th phase is the final grinding. There is a horizontal filled

with steel balls. Clinker reach in this rotating drum after cooling. Here, steel
balls tumble and crush the clinker into a very fine powder. This fine powder

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is considered as cement. During grinding gypsum is also added to the mix
in small percentage that controls the setting of cement.

Rotating ball mill

CEMENT MANUFACTURING PROCESS PHASE VI: PACKING AND

SHIPPING

Transportation of cement from silos

Material is directly conveyed to the silos (silos are the large storage tanks
of cement) from the grinding mills. Further, it is packed to about 20-40 kg
bags. Only a small percent of cement is packed in the bags only for those
customers whom need is very small. The remaining cement is shipped in
bulk quantities by mean of trucks, rails or ships.

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1.5:- Organizational Policies:-
Climate Change Mitigation Policy

Ambuja Cements Ltd. recognises the significant global threat caused by high
concentration of Green House Gases (GHG) in the atmosphere. We consider
ourselves responsible and shall put in efforts for limiting our impact on climate
change. Our efforts shall be implemented in all plants and offices. Our strategy for
preventing climate change commits us to the following:

Ÿ Inventorisation of carbon emissions throughout our processes

Ÿ Integrating energy efficient considerations into all aspects of our business

including manufacturing, transportation and investments

Ÿ Exploring/implementing alternative sources of energy

Ÿ Increasing production of blended cement

Ÿ Retrofitting energy efficient technology including installation of CFLs in our

buildings, lighting controls and metering systems

Ÿ Reducing our travel emissions wherever possible

Ÿ Offsetting our carbon emissions through plantation

Ÿ Promoting 3R's in all our activities and processes

Ÿ Creating awareness amongst employees and their families on the benefits of

energy efficiency and rewarding employees who achieve reduction of GHG
emissions

Corporate Social Responsibility (CSR) has been an integral part of the way we
have been doing our business since inception. For more than 25 years, the
Company's CSR initiatives has played pivotal role in improving the lives of the
communities and society at large and in & around our operations with an objective
to energize, involve and enable them to realise their potential. This has also
enabled us to fulfil our commitment to be a socially responsible corporate citizen.

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I. OBJECTIVE
The main objective of Ambuja's CSR policy is
Ÿ to lay down guidelines to make CSR a key business process for
sustainable development of the society
Ÿ to directly/indirectly undertake projects/programs which will enhance
the uality of life and economic well-being of the communities in and
around our plant and society at large
Ÿ to generate goodwill and recognition among all stakeholders of the
company.
II. OUR RESPONSIBILITIES
A) Towards our communities
We will involve communities surrounding our operations to bring about a
positive change in their lives through holistic, sustainable and integrated
development.
B) Towards our Customers
We will build gainful partnerships with the customers to understand their needs
and provide right product and service solutions. We will adopt and actively
encourage the best and fair business practices and shall endeavour to build
solid bonds with them.
C) Towards our Business Partners
We will support our suppliers to cultivate ethical and fair business practices
and give preference over other to those who demonstrate this.
D) As a Corporate Citizen
We reaffirm our commitment to conduct our business with environmental
accountability. We will endeavour to adopt environment-friendly technologies
and energy efficiency in our operations while continuously monitoring and
reducing emissions. Corporate Social Responsibility Policy
E) Responsibilities toward our Employees
We will foster a work culture with high ethical principles and standards and
encourage our employees to perform with total integrity, commitment and
ownership. We will do all we can to support their professional growth and
recognise high achievers. We will continue to raise the bar of our OH&S
standards and guidelines. We recognise that our employees and contractors
deserve to work in safe and healthy work environment and will make it our
responsibility to ensure zero harm to people.
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2.1 Industrial Overview:-
Ambuja Cements Ltd, a part of the global conglomerate LafargeHolcim, is among
the leading cement companies in India. The company sells cement under the
Ambuja brand.

Ambuja Cements Ltd (ACL) was incorporated in the year 1981 as Ambuja
Cements Pvt Ltd. The company was established as a joint venture between the
public sector Gujarat Industrial Investment Corporation (GIIC) and Narottam
Sekhsaria & Associates. In May 19, 1983, the company was rehabilitated into a
public limited company. Subsequently, the company name was changed to Gujarat
Ambuja Cements Ltd. Further, the name was changed to Ambuja Cements Ltd.

Ambuja Cements is a major cement producing company in India. The principal

activity of the company is to manufacture and market cement and clinker for both
domestic and export markets. The company has five integrated cement
manufacturing plants and eight cement grinding units. It is the first Indian cement
manufacturer having a captive port with three terminals along the countrys western
coastline to facilitate timely, cost effective and environmentally cleaner shipments
of bulk cement to its customer. The company has its own fleet of ships. The
company subsidiaries include Dang Cement Industries Private Ltd, M.G.T
Cements Private Ltd, Chemical Limes Mundwa Private Ltd and Dirk India Pvt Ltd.

In the year 1985, the company set up a cement plant in technical collaboration with
Krupp Polysius, Germany, Bakau Wolf and Fuller KCP. During the year 1988-89,
the company commissioned the 12.6 MW diesel-generating sets. In the year 1991,
the company got necessary approvals for setting up another cement plant with 1
million tonne capacity per annum at Himachal Pradesh. The company undertook
bulk cement transportation, by sea, to the major markets of Mumbai, Surat and
other deficit zones on the West Coast.

In the year 1997, the company started commercial production in Kodinar plant
with an enhanced capacity. In the year 1998, they set up a $20 million clinker
Grinding unit in Sri Lanka. In the year 2000, giants Larsen & Tubro (L&T) and
Gujarat Ambuja Cements entered a unique agreement to reduce transportation
costs in dispatching bulk cement in Gujarat. Also, they entered into an annual

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contract with a Soinhalese firm, Mahaveli Marine Cement, to supply around 2.5
lakh tonnes of cement.

In the year 2002, the company started commercial production at Maratha Cement
Works plant. In June 2002, they started commercial production in the new 2-
million tonne Greenfield cement plant at Chandrapur, Maharashtra. In the year
2004, Ambuja Cement Rajasthan was amalgamated with the company.

In February 2005, the company set up a cement mill with a capacity of 80 TPH at
Darlaghat and commenced commercial production. They commissioned a captive
thermal power plant with two 12 MW Steam Turbo Generators (STG), with two
boilers of 45 TPH capacity each at a cost of Rs.94 crore. The first STG was
commissioned in February 2005 and the second in May 2005.

In July 2005, Indo-Nippon Special Cements Ltd, a subsidiary company was

amalgamated with the company. The company set up new clinker capacity at
Bhatapara in Chattisgarh and Rauri in Himachal Pradesh, each having a capacity of
2.2 million tonnes per annum at a cost of Rs. 1600 crore. In 2006, Global Cement
Major Holcim acquired management control of the company.

The company commenced commercial production at two new 2.2 million tonne
clinker production lines, at Bhatapara (Chattisgarh) and Rauri (HP) in December
2009 and January 2010 respectively. In February 24, 2010, the company
inaugurated their cement plant (grinding unit) at Dadri, Uttar Pradesh with the
capacity of 1.5 million tonnes. In March 27, 2010, they inaugurated their cement
plant (grinding unit) at Nalagarh, Himachal Pradesh with the capacity of 1.5
million tonnes.

During the year, the company commissioned an additional 30 MW captive power

unit at Ambujanagar (Gujarat). In October 2010, the company signed an agreement
with the Rajasthan State Industrial Development and Investment Corporation, to
set up a 2.2 million tonne clinkerisation unit in Nagaur district. In December 2010,
the Dadri Grinding Unit in its very first year of operation received the Integrated
Management System (IMS) Certification, including ISO 9001:2008, ISO
14001:2004, and OHSAS 18001:2007 by BSI (U.K.).

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In the year 2011, the company started commercial production in a new cement mill
at a cost of approx Rs. 185 crore at Bhatapara plant. Also, they commissioned a
new cement mill of 0.9 million tonne cement grinding capacity at Maratha Cement
Works plant at a cost of approx Rs 61 crore.

The company commissioned a 7.5 MW Wind Mill project in Kutch, Gujarat at a

cost of Rs 46 crore. The company increased the installed capacity in Bhatinda
grinding unit in Punjab by 0.1 million tonne to reach at 0.6 million tonne. Also,
they increased the installed capacity in Farraka grinding unit in West Bengal by
0.25 million tonne to reach at 1.25 million tonnes.

In June 2011, the company made strategic investments in Dang Cement Industries
Pvt. Ltd, Nepal and acquired 85% shareholding for Rs 19.13 crore to help further
expansion of capacity in the northern region of India and Nepal. In September
2011, they acquired 60% shareholding in Dirk India Pvt Ltd, Maharashtra Rs.
16.51 crore. The company entered into a joint venture for speciality cement
manufacturing facility in Goa with Counto Microfine Products Pvt Ltd.

On 24 July 2013, the Board of Directors of Ambuja Cements approved a proposal

to acquire 50.01% stake in ACC. It was decided that Ambuja will first acquire
from Holderind Investments Ltd., Mauritius (Holcim), a 24% stake in Holcim
India for a cash consideration of Rs. 3500 crore, followed by a merger of Holcim
India into Ambuja.

On 24 May 2016, Ambuja Cement announced the completion of its Rs 338-crore

expansion project at its Sankrail grinding unit near Kolkata, thereby raising the
capacity of the unit to 2.4 million tonne per annum from 1.5 million tonne per
annum.

On 15 November 2016, Ambuja Cements overseas parent company LafargeHolcim

announced that its subsidiary Holderind Investments Ltd. has increased its
shareholding in Ambuja Cement Ltd. to 63.11% post the acquisition of additional
3.91 crore shares.

On 29 April 2017, Ambuja Cement announced the launch of a superior composite

cement product for better sustainability under the brand Ambuja Compocem.

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Ambuja Cements Board of Directors at its meeting held on 5 May 2017 approved
constitution of a special committee of directors with majority of independent
directors to explore the possibility of a merger of Ambuja Cement and ACC.

2.2: Current Issues

ACC, Ambuja Cements trade weak as merger plans put on hold

Shares of ACC and Ambuja Cements were trading lower by upto 4% on the BSE,

after these companies on Monday post market hours said they are not proceeding
with the merger at this juncture. The Indian units of LafargeHolcim
announced merger plan in May last year.

Ambuja Cements was trading 4% lower at Rs 253, while ACC down 2% at Rs

1,625 on the BSE. On comparison, the S&P BSE Sensex was down 0.3% at 34,344
points at 10:23 am.

"On the basis of a comprehensive evaluation carried out by both the special
committee and Board of Directors of the company, the board is of the opinion that
there are at present certain constraints in implementing a merger between the
company and Ambuja Cements," ACC said in a filing on BSE.

The company is therefore not proceeding with the merger at this juncture, though
this remains the ultimate objective, it added.

In a filing to the bourses, Ambuja Cements also said it was not pursuing

a merger with ACC at this point of time, though it remains the ultimate goal.

“The announcement is negative for the both ACC and Ambuja Cements, in our

view. Although, we highlight that off late both companies have been indicating in
their respective investor interactions that merger was only a bull case scenario and
not a base case scenario. But the street still seems to factor in some kind of synergy
benefits in the estimates,” analysts at Antique Stock Broking said in event update.

“The outlook on fructification of these swap based synergies is hazy, in our view.
Managements have also communicated in the past that some part of common
28
procurement based synergies (not part of current announcement) have been
realized already. Both companies have been amongst the less preferred names in
the space for us,” added note with ‘HOLD’ rating on both the stocks.

ACC, Ambuja Cements put merger on hold over mines hurdle

ACC Ltd and Ambuja Cements Ltd, both controlled by LafargeHolcim Ltd, said
they were putting on hold their proposed merger, citing constraints related to
transfer of mines under current laws. The merger, which would have potentially
created India’s second largest cement maker, still remains the “ultimate objective”,
the companies said.

“The current regime on transfer of mineral concessions is still evolving and does
not provide for a merger currently,” a spokesperson for ACC said in an emailed
response to a query. “Given the challenges of achieving such transfers across 18-20
states, it was found prudent not to pursue the same at this point of time.”

For now, ACC and Ambuja said that their boards have approved an arrangement to
work with each other for mutual purchase and sale of services to maximize
synergies and unlock value for shareholders.

In May 2017, the boards of the two companies agreed to evaluate a potential ACC-
Ambuja merger “with a view to combine the strengths of both businesses”. A
special committee, comprising largely of independent directors, was formed to
begin the evaluation, ACC and Ambuja Cements had said.

“On the basis of a comprehensive evaluation carried out by both the Special
Committee and the board of directors of the company, the company is of the
opinion that there are at present certain constraints in implementing a merger
between the company and ACL,” ACC said in a filing on Monday.

“The company is therefore not proceeding with the merger at this juncture, though
this remains the ultimate objective,” ACC added in the filing.

ACC also said that it will come out with details about maximizing synergies and
unlocking value for investors through a notice for postal ballot.

29
Ambuja Cements holds about a 50% stake in ACC, while LafargeHolcim owns a
4.48% stake through its unit Holderind Investments Ltd, according to data
from Bloomberg. Holderind holds about 63.56% in Ambuja Cement.

According to Rohit Natarajan, an analyst with IDBI Capital, investors were not
convinced about the rationale of the proposed ACC-Ambuja merger.

“If EV/tonne is any benchmark to go by, ACC was cheaper than Ambuja. There
are two perspectives to play the spread here: first, there will be a favourable
exchange ratio, implying a merger arbitrage for ACC holders. Second, Ambuja
could buy ACC at a less favourable rate, implying a gain for Ambuja holders.
Either ways, both trades knock off with the latest event. However, with ACC
management maintaining merger as the ultimate objective, we will be revisiting the
script again,” Natarajan said.

2.3: Key-Competitors
Name Last Price Market Cap. Sales Net Profit Total Assets
(Rs. cr.) Turnover

Ultra Tech Cement 3,950.00 108,448.01 23,891.43 2,627.72 28,278.58

Shree Cements 16,273.45 56,692.18 8,429.16 1,339.11 8,280.18

Ambuja Cements 231.10 45,888.26 10,446.85 1,249.57 19,097.14

ACC 1,533.15 28,790.60 13,284.60 915.45 8,711.46

Dalmia Bharat 2,831.40 25,242.87 222.51 63.37 1,591.33

Ramco Cements 740.00 17,758.28 3,949.54 649.29 4,759.39

Rain Industries 372.45 12,527.19 59.62 32.11 1,261.38

OCL India 1,295.45 7,371.14 2,911.87 383.87 3,459.88

J. K. Cement 992.15 6,937.83 3,797.27 259.58 4,299.71

Prism Cement 113.40 5,708.06 5,019.57 17.51 2,160.75

30
JK Lakshmi Cem 458.00 5,389.29 2,910.41 82.00 3,142.92

Birla Corp 685.35 5,277.56 3,345.12 214.00 4,970.24

India Cements 141.25 4,352.65 5,794.03 173.35 7,663.53

Heidelberg Cem 145.20 3,290.42 1,717.46 76.21 1,542.14

Orient Cement 137.15 2,809.78 1,875.14 -32.10 2,177.57

KCP 128.70 1,659.22 818.29 29.60 679.66

Mangalam Cement 319.65 853.27 908.57 36.63 805.44

Andhra Cement 9.40 275.91 349.29 -103.12 853.82

Guj Sidhee Cem 26.25 226.15 437.36 -39.04 165.69

Burnpur Cement 7.55 65.02 74.34 -53.88 76.22

Barak Vally Cem 28.30 62.71 122.53 1.35 141.63

2.4: Environmental Scanning(PESTEL analysis)

Political:

1. The price of cement is primarily controlled by following rates which are

predominantly controlled by government; Coal rates, oil rates, taxes like GST,

Royalties, Limestone mining charges etc.

2. The government is trying a lot to invest in infrastructure, to the tune of 1 trillion

$, so

cement industries have a lot to look forward to.

31
3. Govt. programs like NREGS, Indira Awaas Yojana, rising minimum support
prices

enhance rural income which boosts cement demand in rural areas

4. The total Government levies and taxes which include Royalty on Limestone,
Royalty

on Coal,Electricity Duty, VAT/Sales Tax etc., on cement constitute about 60% or

more of the ex-factoryprice of cement.

Economical:

1. With government looking to boost the economy and increase development, the

infrastructure sector will ensure topline growth of the sector.

2. The per capita consumption of cement in India (about 155 kg) is much less

compared to average per capita consumption (about 380 kg) for the rest of the
world.

Hence Indian cement industry has large potential to grow.

3. Growth in tourism sector is fuelling the increase in the construction of hotels in

the

country.

4. The government’s decision to allow 100 % FDI in the sector has also been very

instrumental in allowing cement industries to reach the level they are at today.

5. Upcoming industrial clusters and infrastructure development in emerging tier-II

and tier IIIcities 

6. Looking at the growth rate of Indian cement industry and capacity expansions, it
is

32
expected thatcement industry will create good number of jobs in the next 4-5 years.

Social:

1. The cement industry’s growth is directly related to growth of the country and

increased income of people.

2. It has been able to provide employment to a lot of people.

3. Cement industry firms have been very actively indulging in CSR activities,
promoting

education for unprivileged, supporting clean and green tech etc.

4. Since cement industry is an energy intensive industry with high emissions, latest

technologies have to be used to have energy efficiency and to meet the

environmental

standards.

Technological:

1. The wet process is now being replaced by the dry process. It reflects need for
energy

conservation.

2. Changes are being made in the design of cement kiln and blowing furnaces
which

promote use of kiln for utilization of wastes.

3. Renewable sources of fuel, unlike coal are being researched to be used in the
plants.

4. Transport systems for transport of cement are being updated.

33
5. Effectively and accurately finding limestone reserves and better mining
techniques

can reduce per unit cost of limestone.

2.5:Porters five forces model of competition

►The Five Forces were Porter’s conclusions on the reasons for differing
levels of

competition, and hence profitability, in differing industries.

►They are empirically derived, i.e. by observation of real companies in real

markets,rather than the result of economic analysis.

►Porter’s Five Forces is a useful generic structure for thinking about the
nature of industries.

A brief description of what Porter’s five forces entail:

 Threat of New Entrants: Power is also affected by the ability of people to

enter your market.If it costs little in time or money to enter your market and
compete effectively, if there arefew economies of scale in place, or if you
have little protection for your key technologies ,then new competitors can
quickly enter your market and weaken your position. If you have strong and
durable barriers to entry, then you can preserve a favorable position and
take fairadvantage of it.

Supplier Power: Here you assess how easy it is for suppliers to drive up
prices. This is driven by the number of suppliers of each key input, the
uniqueness of their product or service, theirstrength and control over you,
the cost of switching from one to another, and so on. Thefewer the supplier
choices you have, and the more you need suppliers' help, the
more powerful your suppliers are.

34
Power of Buyers: Here you ask yourself how easy it is for buyers to drive
prices down.Again, this is driven by the number of buyers, the importance
of each individual buyer toyour business, the cost to them of switching from
your products and services to those ofsomeone else, and so on. If you deal
with few, powerful buyers, then they are often able todictate terms to you.

Threat of Substitution: This is affected by the ability of your customers to

find a differentway of doing what you do– for example, if you supply a
unique software product thatautomates an important process, people may
substitute by doing the process manually or byoutsourcing it. If substitution
is easy and substitution is viable, then this weakens your power.

Competitive Rivalry: What is important here is the number and capability

of yourcompetitors. If you have many competitors, and they offer equally
attractive products andservices, then you'll most likely have little power in
the situation, because suppliers and buyers will go elsewhere if they don't
get a good deal from you. On the other hand, if no-oneelse can do what
you do, then you can often have tremendous strength.

35
36
3.1 Products
An established brand in India, Ambuja Cement is known for its high strength, high
performance cement which has become the byword for strong and durable
structures. The company currently has a manufacturing capacity of 29.65 million
tonnes. 

Through use of state-of-the-art technology and strong thrust on research and

development, Ambuja Cement has developed products to cater to its three
customer segments – Individual House Builders, Masons and Contractors, and
Professionals.

Innovation – the hallmark of Ambuja Cement since its inception – has helped it
develop technology to produce cement of consistent quality from diverse raw
materials. About 25 per cent of the company’s production of high strength Portland
Pozzolana Cement (PPC) uses fly ash – a waste produced in thermal power plants
– as raw material. PPC currently constitutes 93 percent of the company’s product
portfolio.

Ambuja Plus Roof Special

The company has developed Ambuja Plus Roof Special, a special quality PPC
cement with advanced SPE technology which makes the concrete stronger, denser
and leak proof, and consequently strengthens the roof. 

37
Alccofine Micro Materials

Ambuja Cement’s latest breakthrough is Alccofine Micro Materials which find

wide use in construction projects like metro rail, dams, roads, flyovers, bridges,
tunnels, etc. The micro materials range from high strength concrete additives to
products for special applications.

3.2. Four P’s (Product, Price, Place, Promotion)

Products in the marketing mix of Ambuja Cement

Ambuja Cement is basically a manufacturer of cement and clinkers; the enterprise

has close relations with government and other private institutions. Ambuja cement
has contributed to the infrastructure rise in the country like never before. By
supplying cements of high quality, they have made an incomparable contribution
to the development of country by supplying to many government projects.

Ambuja Cement has seen varied ups and downs but they have never compromised
on the quality of product they produce.

Top products from the house of Ambuja Cement are:

 Ambuja Plus Cement

 Portland Pozzolana Cement (PPC)

Place in the marketing mix of Ambuja Cement

Ambuja cement was founded on the soils of Gujarat but the headquarters are in
Mumbai. The brand aims to take on the contemporaries in a very unique way. The
strong relations with government and other building institutions have helped

38
Ambuja Cement beat contemporaries like ACC and Ultra Tech. The throat cutting
competition saw a new height when the likes started manufacturing products
similar to those of Ambuja Cement.

Ambuja Cement has always believed in rapid expansion, they have monitored their
business growth quite intricately and have taken expansion measures whenever
required. With the expansion through India and its sub-continent, they have
developed a good base of users.

Ambuja Cement manufactures cement for two purposes only

1. For domestic use and

2. For exporting it to the world

The slow but solid expansion has helped brand create a base that is loyal and will
incur huge profits in coming times. The slow and steady expansion has also
contributed to the rise of share value.

Price in the marketing mix of Ambuja Cement

The business development team at Ambuja Cement keeps a meticulous eye on all
of its contemporaries and competitors. They have worked a way out through which
they can manage the prices well. Ambuja Cement basically deals in normal packets
of cement, which can be used for building prosperous homes with great ease.

Ambuja Cement PPC is available for a meager price of 297 INR. People from the
remotest corners of India can buy this cement at the listed price while
the international prices are going to differ based on the taxation rates in the
particular country.

Competitors like ACC and Ultra Tech have listed their products very closely;

some of them have listed their cement packets at 295 and 300 INR. The neck
breaking competition is taking toll on almost every enterprise but Ambuja Cement
seems to be firmly placed and satisfied.

39
Promotion in the marketing mix of Ambuja Cement

There’s no other cement manufacturer in the country that can even come closer to
Ambuja Cement when it is about marketing the project well. ‘Tutegi Kaise Ambuja
Cement Se Jo Bani Hai!’ is one of those rare taglines you will find every kid and
oldie chanting. Besides this, the other tagline “Iss cement mein jaan hai” is
synonymous with Ambuja cement and is famous nationwide.

Ambuja Cement not only has a tagline that is easy to remember and addictive but a
series of ad campaigns that aims to touch hearts. From creating ads that showcased
the rift between siblings to enrolling the great Khali for an emotional
advertisement.

The ad that portrayed famous wrestler Khali is one of the most popular TV ads of
recent time. It not only promotes the product smartly but also creates a connection
with the people watching. The ad has touched the right chord of family,
relationships and love.

Ambuja Cement is not only beating contemporaries but also emerging as a brand
that loves its country, values relationships and aims for enigmatic growth

3.3:- STP (Segmenting Targeting and Positioning)

Segmenting

The segmenting step is essentially a brainstorming activity. You list out all the
potential market segments you could target in a marketing campaign. Niche
companies sometimes have only one target market, while other businesses may
have five or 10 possible segments, or more. Cell phone providers, for instance,
often separate customers by benefits. Some buyers want high-tech gadgetry while
others want dependable communication for travel and emergencies.

Targeting

When you have multiple, distinct market segments, you typically need to
customize marketing campaigns that appeal to each. As you go through the STP
process, you select which segment to target with your upcoming campaign. Using

40
the cell phone example, you might decide to launch a new campaign to promote
advanced mobile features, media, apps and texting tools to younger, tech-savvy
audiences. For this campaign, you would develop messages and use media tailored
to that market.

Positioning

Positioning is how you align your brand or products in the target market. The goal
is to offer something that is bigger, better or more valuable than your competitors
to a particular market segment. For example, Apple attempts to position itself as an
innovative, cutting-edge technology provider to discerning tech buyers who want
top-quality solutions. Your positioning serves as your big-picture guide in building
your marketing campaign.

Segmentation, targeting, positioning in the Marketing strategy of Ambuja

Cements –

Ambuja Cements uses segmentation variables such as income group, number of

members in the family, region, and others. It uses a mix
of geographic and psychographic segmentation variables to understand the
changing needs of the industry & end customers.

Since offerings of Ambuja cement are meant for varied uses in the meta-market,
therefore, it uses differentiating targeting.

Customer benefit based positioning strategies is used by the company to highlight

the features and value of money to the customers.

3.4:- Distribution Channels

Cement distribution

Much of cement transportation in India is done through rail and roads, depending
on the proximity of the plant to the market. Sea transportation is also utilised and
Ambuja Cements has been a pioneer in this. It is the first Indian cement
manufacturer to build a captive port with three terminals along the country’s
western coastline to facilitate timely, cost effective and more environmentally

41
friendly shipments of bulk cement to its customers. The company also possesses its
own fleet of ships.

Road transportation accounts for a substantial portion of the distribution of cement

around the country. This is primarily carried out through commercial vehicles or
trucks – Ambuja uses a large number of trucks. One of the major problems in India
is that the size of trucks that carry cement are much smaller than those used in the
US and Europe. This leads to efficiency problems throughout the country. Most
trucks fall into the 9 t category, compared with sizes of 28 t and 32 t used in other
countries.

Trucks standing in truck yard.

Supply chain excellence

Ambuja is investing efforts in the supply chain area to improve customer service
levels, lower costs through increased operating efficiency and to make the supply
chain safer for all stakeholders. In order to help offset the increased cost of fuel,
Ambuja is focusing on improving efficiency through better use of assets. This
includes improving Ambuja’s efficiency in utilising the truck fleet and rail system.
42
Several different projects are running to bring the strategy to fruition on the
ground.

The company has been focusing on the four dimensions of the supply chain: cost,
service, evacuation capacity and safety. Constantly changing its footprint is one
method that Ambuja employs to stay relevant to its customers and improve its
customer service. As the markets are changing, the company is adjusting its asset
base in order to offer service in different ways – for example, by providing
facilities and building new locations so that the point of dispatch can be closer.
There is also a need to constantly remove supply chain constraints and reduce
bottlenecks, thereby improving supply chain efficiencies. The company believes
that a focus on dust emission is also relevant.

In terms of safety, the country as a whole has a long way to go to reduce fatalities,
especially in the area of vehicles and traffic. In general, the roads in India are in
poor condition with many undulations and incomplete roadwork. Trucks are not
maintained to the highest standards, leading to failure of critical components at
crucial moments. The single biggest issue is that the driving community does not
yet have a safety mindset; therefore, there are numerous cases of indiscipline and
poor judgment whilst driving.

At Ambuja, the aim is to prevent fatalities during transportation of cement and the
company is engaged in many projects to facilitate safe driving. The project
SPARSH focuses on people, vehicles and infrastructure. It also involves working
with vendors to identify risks and potential safety hazards. A big part of SPARSH
relates to driver training, as well as engaging with drivers, employers and
transporters in order to raise awareness. Furthermore, as not all unsafe traffic
incidents are reported due to fear of reprisal, Ambuja has been working on
improving the reporting of traffic incidents

3.5:- Promotion Strategy

In marketing, promotion refers to any type of marketing communicationused to
inform or persuade target audiences of the relative merits of a product, service,
brand or issue. The aim of promotion is to increase awareness, create interest,
generate sales or create brand loyalty. It is one of the basic elements of the market
mix, which includes the four P's: price, product, promotion, and place.[1]

43
Promotion is also one of the elements in the promotional mix or promotional mix
or promotional plan. These are personal selling, advertising, sales
promotion, direct marketing publicity and may also include event
[2]
marketing, exhibitions and trade shows.  A promotional plan specifies how much
attention to pay to each of the elements in the promotional mix, and what
proportion of the budget should be allocated to each element.

Promotion covers the methods of communication that a marketer uses to provide

information about its product. Information can be both verbal and visual.

For ambuja cements

There’s no other cement manufacturer in the country that can even come closer to
Ambuja Cement when it is about marketing the project well. ‘Tutegi Kaise Ambuja
Cement Se Jo Bani Hai!’ is one of those rare taglines you will find every kid and
oldie chanting. Besides this, the other tagline “Iss cement mein jaan hai” is
synonymous with Ambuja cement and is famous nationwide.

Ambuja Cement not only has a tagline that is easy to remember and addictive but a
series of ad campaigns that aims to touch hearts. From creating ads that showcased
the rift between siblings to enrolling the great Khali for an emotional
advertisement.

The ad that portrayed famous wrestler Khali is one of the most popular TV ads of
recent time. It not only promotes the product smartly but also creates a connection
with the people watching. The ad has touched the right chord of family,
relationships and love.

Ambuja Cement is not only beating contemporaries but also emerging as a brand
that loves its country, values relationships and aims for enigmatic growth

44
4.1 Sources of Finance:-
CATEGORY OF SHAREHOLDER Total Number of Percentage
Shares ShareHolding (%)

Promoter

Indian Promoter 0 0.00

45
CATEGORY OF SHAREHOLDER Total Number of Percentage
Shares ShareHolding (%)

Foreign Promoter 1,25,31,56,361 63.56

Total Promoter 1,25,31,56,361 63.56

Non Promoter

Institutions

Mutual Funds / UTI 7,52,94,612 3.82

FI/Bank/Insurance 16,11,43,366 8.17

Govt 27,56,344 0.14

FII 0 0.00

Other 33,95,10,045 17.22

Total Institutions 57,87,04,367 29.35

Non-Institution

Bodies Corporate 2,51,06,378 1.27

Individuals (upto Rs. 1 lakh) 8,20,18,207 4.16

Individuals (in excess of Rs. 1 lakh) 60,40,535 0.31

NRIs/OCBs 1,21,26,338 0.62

46
CATEGORY OF SHAREHOLDER Total Number of Percentage
Shares ShareHolding (%)

Others 10,25,44,552 5.20

Total Non-Institution 13,97,77,268 7.09

Total Non Promoter 71,84,81,635 36.44

Depository Receipts 1,40,07,233 0.00

Total 1,98,56,45,229 100.00

4.2 Ratio Analysis:-

Key Financial Ratios of Ambuja
Cements

Dec Dec '15 Dec '14 Dec '13 Dec '12

'16

Investment Valuation Ratios

Face Value 2.00 2.00 2.00 2.00 2.00
Dividend Per Share 2.80 2.80 5.00 3.60 3.60

47
Operating Profit Per Share (Rs) 8.47 9.87 12.44 10.68 16.04
Net Operating Profit Per Share 46.6 60.97 64.39 59.26 63.09
(Rs) 7
Free Reserves Per Share (Rs) -- -- -- -- --
Bonus in Equity Capital 49.0 62.70 62.79 62.95 63.10
0
Profitability Ratios
Operating Profit Margin(%) 18.1 16.18 19.32 18.02 25.41
5
Profit Before Interest And Tax 8.45 9.22 13.63 12.14 18.92
Margin(%)
Gross Profit Margin(%) 8.98 9.57 14.22 12.67 19.60
Cash Profit Margin(%) 18.4 14.59 19.27 18.41 21.24
9
Adjusted Cash Margin(%) 18.4 14.59 19.27 18.41 21.24
9
Net Profit Margin(%) 10.4 8.53 14.99 14.13 13.33
6
Adjusted Net Profit Margin(%) 9.85 8.22 14.37 13.55 12.86
Return On Capital Employed(%) 7.37 12.23 18.25 16.33 25.52
Return On Net Worth(%) 5.08 7.83 14.81 13.64 14.73
Adjusted Return on Net 5.08 7.83 14.81 13.38 17.90
Worth(%)
Return on Assets Excluding 96.0 66.41 65.19 61.36 57.09
Revaluations 6
Return on Assets Including 96.0 66.41 65.19 61.36 57.09
Revaluations 6

48
Return on Long Term Funds(%) 7.37 12.23 18.25 16.33 25.52
Liquidity And Solvency Ratios
Current Ratio 0.97 1.42 1.27 1.28 1.22
Quick Ratio 0.75 1.18 1.04 1.01 0.95
Debt Equity Ratio -- -- -- -- --
Long Term Debt Equity Ratio -- -- -- -- --
Debt Coverage Ratios
Interest Cover 19.7 13.77 28.66 23.88 29.83
1
Financial Charges Coverage Ratio 31.6 20.59 36.56 31.41 37.30
0
Financial Charges Coverage Ratio 26.4 16.61 32.11 28.42 25.61
Post Tax 6
Management Efficiency Ratios
Inventory Turnover Ratio 11.2 12.02 11.23 9.81 11.17
4
Debtors Turnover Ratio 10.9 36.79 43.43 41.18 42.84
1
Investments Turnover Ratio 11.2 12.02 11.23 9.81 11.17
4
Fixed Assets Turnover Ratio 0.75 0.79 0.88 0.85 0.96
Total Assets Turnover Ratio 0.49 0.92 0.99 0.96 1.10
Asset Turnover Ratio 0.63 0.93 1.02 1.00 1.15
Average Raw Material Holding -- -- -- -- --
Average Finished Goods Held -- -- -- -- --

49
Number of Days In Working 1.10 70.19 47.05 49.02 49.13
Capital
Profit & Loss Account Ratios
Material Cost Composition 14.8 15.35 15.68 14.86 13.74
9
Imported Composition of Raw 3.11 8.84 12.98 13.88 14.46
Materials Consumed
Selling Distribution Cost -- -- -- -- --
Composition
Expenses as Composition of Total 0.39 0.10 0.50 0.63 0.33
Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 50.1 53.80 51.76 42.97 42.77
5
Dividend Payout Ratio Cash 26.7 30.31 38.61 31.17 29.79
Profit 3
Earning Retention Ratio 49.8 46.20 48.24 56.19 64.81
5
Cash Earning Retention Ratio 73.2 69.69 61.39 68.39 74.10
7
AdjustedCash Flow Times 0.01 0.02 0.01 0.02 0.02

4.3 Net profit or Net balance sheet

Balance Sheet of Ambuja Cements ------------------- in Rs. Cr. -------------------
Dec '16 Dec '15 Dec '14 Dec '13 Dec '12

50
12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 397.13 310.38 309.95 309.17 308.44
Equity Share Capital 397.13 310.38 309.95 309.17 308.44
Reserves 18,676.43 9,996.49 9,793.38 9,176.37 8,496.62
Networth 19,073.56 10,306.87 10,103.33 9,485.54 8,805.06
Secured Loans 23.58 9.45 5.86 5.86 0.00
Unsecured Loans 0.00 13.23 13.23 23.29 34.63
Total Debt 23.58 22.68 19.09 29.15 34.63
Total Liabilities 19,097.14 10,329.55 10,122.42 9,514.69 8,839.69
Dec '16 Dec '15 Dec '14 Dec '13 Dec '12

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 12,394.39 11,945.71 11,362.17 10,759.31 10,116.82
Less: Accum. Depreciation 6,415.74 5,853.68 5,135.06 4,696.78 4,254.45
Net Block 5,978.65 6,092.03 6,227.11 6,062.53 5,862.37
Capital Work in Progress 320.02 414.12 690.17 694.88 520.12
Investments 12,909.72 2,226.13 2,172.73 1,788.45 1,655.84
Inventories 937.54 895.45 888.39 933.94 983.93
Sundry Debtors 1,412.87 286.36 227.98 231.51 213.37
Cash and Bank Balance 300.08 2,848.39 2,458.12 2,341.09 2,253.72
Total Current Assets 2,650.49 4,030.20 3,574.49 3,506.54 3,451.02

51
Loans and Advances 1,395.35 1,399.45 1,236.35 912.19 935.33
Total CA, Loans & Advances 4,045.84 5,429.65 4,810.84 4,418.73 4,386.35
Current Liabilities 2,862.08 2,712.64 2,569.64 2,348.81 2,143.57
Provisions 1,295.01 1,119.74 1,208.79 1,101.09 1,441.42
Total CL & Provisions 4,157.09 3,832.38 3,778.43 3,449.90 3,584.99
Net Current Assets -111.25 1,597.27 1,032.41 968.83 801.36
Total Assets 19,097.14 10,329.55 10,122.42 9,514.69 8,839.69

Contingent Liabilities 2,324.61 2,231.98 2,264.89 2,310.02 2,240.01

Book Value (Rs) 96.06 66.41 65.19 61.36 57.09

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5.1:- Performance Analysis of the company

AMBUJA CEMENTS LTD. (AMBUJACEM) - PRICE PERFORMANCE

COMPANY LATEST(R 1- 1- 1- 3- 6- 1- 3-YR

S) DA WK MT MT MT YR (%)
Y (%) H H H (%)
(%) (%) (%) (%)

ULTRATEC 3964.95 0.46 0.83 - -7.21 4.38 0.28 41.34

H CEM. 4.99

SHREE 16175.00 - -1.47 - -9.58 - - 48.30

CEMENT 0.49 4.07 9.87 1.11

AMBUJA 231.00 - 0.17 - - - 1.38 -7.45

CEM. 0.02 8.35 14.6 11.7
8 1

ACC 1520.00 - -2.31 - - - 8.88 -1.93

0.75 6.90 12.2 4.55
0

DALMIA 2890.00 1.84 0.06 7.82 -9.65 12.2 50.1 591.6

BHAR. 2 3 4

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THE RAMCO 746.90 0.83 0.61 - -5.36 8.29 16.0 165.2
CEMENT 0.36 2 3

CENTURY 1161.95 1.22 0.68 - - - 13.5 91.06

TEXTILES 3.96 18.6 4.80 3
5

OCL INDIA 1335.00 3.11 -0.15 6.96 - 8.86 45.1 223.3

11.4 5 2
9

J K 994.90 - -1.69 - -9.14 3.26 11.4 54.84

CEMENTS 0.27 3.14 3

PRISM 113.50 0.31 -0.96 - -0.66 10.6 17.7 19.22

CEMENT 7.38 2 4

BIRLA 728.00 5.16 -2.06 - - - 4.25 86.14

CORPN. 20.8 35.8 15.9
4 8 3

JK 463.80 1.63 10.8 6.74 6.56 20.2 6.61 31.84

LAKSHMI 5 3
CEM.

STAR 117.00 3.45 2.72 - -8.95 10.6 (-) (-)

CEMENT 6.74 4

INDIA 142.85 1.17 -0.07 - - - - 69.86

CEMENTS 9.53 21.4 13.7 7.15
0 4

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HEIDELBER 145.00 - -2.52 - -5.10 20.8 20.8 100.1
G CEM. 0.28 8.78 3 8 4

ORIENT 142.50 4.28 2.11 - - - 12.2 -

CEMENT 10.5 15.1 5.97 5 12.42
7 0

SANGHI 113.15 0.53 -1.86 - - 21.2 60.5 113.4

INDS. 4.03 18.2 1 0 9
1

SAGAR 888.95 2.06 -0.80 - 6.52 9.21 13.9 216.0

CEMENTS 9.37 4 1

KCP 131.70 2.61 13.8 1.04 -4.18 21.4 34.8 124.5

3 9 0 5

NCL INDS. 220.00 0.96 -1.81 - - 1.08 11.4 387.2

4.60 12.7 8 6
3

5.2:- Reasons for the expansion/ Contraction or diversification of the

company
Ambuja Cements stock falls 4% as merger with ACC put on hold
Ambuja Cements Ltd is currently trading at Rs252.35, down by Rs9.95 or 3.79%
from its previous closing of Rs262.30 on the BSE. The scrip opened at Rs258 and
has touched a high and low of Rs260 and Rs250.60, respectively.

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ACC and Ambuja Cements announced that the proposed merger of the companies
has been put on hold for now due to certain constraints. However, the companies
maintained that the merger remains the ultimate objective. The constraints are
related to the transfer of mines, as per media sources.

However, both companies have maintained that in order to maximize the synergies
between them, they have approved mutual purchase and sale of materials and
services.

The potential merger was to bring a number of synergies between the two
companies in terms of branding, pricing power and saving in freight and raw
material costs, however, the current arrangement of mutual purchase and sale of
materials and services could still lead to some saving, especially on freight cost.

The companies mentioned that they would come out with details about the
aforementioned arrangement to unlock value for investors through a notice for
postal ballot.

The board of companies had agreed to evaluate a potential ACC-Ambuja merger

with a view to combine the strengths of both businesses in May 2017. However,
the exchange ratio was not disclosed.

ACC Ltd is currently trading at Rs1,641 down by Rs22.3 or 1.34% from its
previous closing of Rs1,663.30 on the BSE. The scrip opened at Rs1,651.10 and
has touched a high and low of Rs1,656.80 and Rs1,623, respectively
 

5.3:- Comment on Organization Leadership

Ambuja Cements was set up in 1986. In the last decade the company has grown
tenfold. The total cement capacity of the company is 18.5 million tones. Its plants
are some of the most efficient in the world. With environment protection measures
that are on par with the finest in the developed world. The company's most
distinctive attribute, however, is its approach to the business. Ambuja follows a
unique homegrown philosophy of giving people the authority to set their own
targets, and the freedom to achieve their goals. This simple vision has created an
environment where there are no limits to excellence, no limits to efficiency. And
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has proved to be a powerful engine of growth for the company.  As a result,
Ambuja is the most profitable cement company in India, and one of  the lowest
cost producer of cement in the world.

When the company started out, it approached the cement business with an open
mind. To compete with the older, established players who had already written off
their plant cost, it was important to have the lowest capital cost per ton of cement.
Their plants would have to be set up in record time. Their capacity utilization
would have to be above 100%. And their power consumption would have to set a
record low these were the main theme of company.

Today, Ambuja is the 3rd largest cement company in India, with an annual plant
capacity of 16 million tonnes including Ambuja Cement Eastern Ltd. and revenue
in excess of Rs.3298 crore.

In 1993, Ambuja Cement set up a complete system of transporting bulk cement via
the sea route. Making it the first company in India to introduce bulk cement
movement by sea. Others followed and today, about 10% cement travels by this
new route.

Port terminal of the company is situated at Muldwarka, Gujarat: Its an all weather
port, 8 kms from the company?s Ambujanagar plant. Handles ships with 40,000
DWT. It is also equipped to export clinker and cement and import coal and furnace
oil.  

In 2013 the company approved a proposal, wherein Ambuja will first acquire from
Holderind Investments Ltd., Mauritius (Holcim), a 24% stake in Holcim India for a
cash consideration of Rs 3,500 crores, followed by a merger of Holcim India into
Ambuja. These intra–group transactions will result in Ambuja holding 50.01%
stake in ACC.In addition, the Board also provided its approval for Ambuja to make
commercially reasonable efforts to invest upto Rs 3,000 crores to acquire an
economic ownership in ACC of up to 10% without triggering a mandatory open
offer, subject to shareholders and regulatory approvals as applicable.

5.4:- Market Share / Growth Rate of the company

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If Sales Revenue shows a moderate or stable growth while EPS shows an explosive
growth, it could possibly be due to accounting manipulation.

Reserves, Dividends Growth

Retained Earnings Growth

Retained Earnings Growth is the percent increase / decrease of a company's

retained net income or reserves/surplus over time. A company can use retained
earnings to maintain current operations, or to invest in new ventures. Generally
speaking, retained earnings growth is accompanied by subsequent increases in
sales and profitability. 

5.5:- SWOT Analysis of the company

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Strengths in the SWOT Analysis of Ambuja Cements :
1. Leading Cement Manufacturer in India: Ambuja Cements has been one
of the leading Cement manufacturers in India. Even though there have been
significant capacity additions in the industry and a slow demand growth in
India.
2. Strong dealer network: Ambuja Cements has a strong dealer network,
which has helped the company to withstand intense competition.
3. Extremely strong in west: The company has a very strong network on the
west coast which has supported sustainable strong market position in
Mumbai, Surat and Cochin. There are pockets which are covered majorly by
Ambuja cement only.
4. Cost advantage through infrastructure: Ambuja has made its processes
more efficiently and soured low priced inputs through which it has been able
to achieve a cost advantage.
5. Excellent financial backing: Ambuja cements is known to be a financially
sound company. Its financial resources were further increased when
HOLCIM (another major player in infrastructure) invested in Ambuja.
6. Marketing consistency: There are two ads of Ambuja which are legendary.
First is the tagline “Iss cement mein jaan hai” which caught the attention of
consumers all across. The second was the marketing campaign with the
Great Khali which said that only Ambuja cement could make homes that
dont get destroyed even for khali. The brandhas picked the quality of
“strength” very well and portrayed it regularly and consistently.
Weaknesses in the SWOT Analysis of Ambuja Cements :
1. Heavily dependent on Indian market: Ambuja been
geographically concentrated depending heavily on the Indian market for its
revenues. In FY2014, the company earned 99.5 percent from the Indian
market.
2. Lack of product diversification: Unlike many competitors, Ambuja does not
have diversified product range. This reduces its potential to expand its
market share.
3. Known more for small works: While Ultratech focuses on large contracts
and huge buildings, Ambuja is known more for repair works and hence it
loses out its brand image where the builder lobby is concerned.
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Opportunity in the SWOT Analysis of Ambuja Cements :
1. High growth in Cement Industry: India is the second leading cement
producer in the world. The country’s cement production is expected to grow
at high speed. This creates an opportunity for Ambuja to tap the demand
created.
2. Investment on infrastructure to grow: The investment in infrastructure is
expected and has this creates demand for cement in the country.
The planning commission had predicted an investment of $1 trillion during
the 12th five-year plan.
3. Benefits due to GST: Cement Industry is going to be benefited with GST as
overall taxation going to drop from current 25 per cent to about 18 per cent.
Also, logistics cost is also to be decreased by GST.
4. Make in India: With the government’s initiatives to increase production in
India, Ambuja, being a core India company, can see many advantages.
5. Increase production: The cement industry runs on the basis of “Who can
produce the most”. As on date, Ultratech has the highest production
capacity. But even Ultratech runs out of supply at times and the demand is
high. Thus, an increased production can help the brand reach new heights.
Threat in the SWOT Analysis of Ambuja Cements :
Litigation for cartelization in the industry: After the complaints from Builders
Association of India (BAI), the Competition Commission of India (CCI) published
an order to stop cartelization in the Cement Industry.
Intense Competition: There is a lot of competition in the cement industry for
Indian as well global companies. This allows limited market share in the industry.

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Findings

 Ambuja Cement is the industry leader in responsible use of resources, both

natural and man-made
 Sustainable profitable growth is ingrained in the company’s DNA. Ambuja
Cement’s multi-pronged strategy, including triple bottom line accounting
method; True Value; good corporate governance practices; overarching
corporate environment policy; and sustainable supply chain policy has
helped cement the company's credentials as a sustainable manufacturer.
 Ambuja Knowledge Centres (AKCs), a unique initiative by the company,
serves as a knowledge sharing platform for construction professionals that
includes practical workshops on mix design and quality supervision.
Currently, 30 AKCs are functional across India.

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Conclusion
Today, AMBUJA CEMENT has become one of the larger and profitable cement
unitsin the Indian Cement Industry. It has done his job within a very short timeby
providing itself as an efficient unit.

From the very beginning it has maintain high quality standard and ithas
been approved by granting it ISO 9002. Now slowly it is goingtowards the
international market and has started to spread its wings overthere. It is slowly and
steadily moving towards the grand success.

AMBUJA CEMENT is not only enveloping its own firm, but is also developingthe
Kodinar Taluka. It has awareness towards environment by achievingzero level
pollution.

At last, I really feel very good, because I get best opportunity tomake project
and get practical knowledge of AMBUJA CEMENT It has really playedan
important role in developing our country.

SUGGESTIONS

 Making traning and development process and entirely in house activity to

reduce cost.
 It is found that the average age group of trainees are in their twenties or
early thirties which signifies that the consumer durable industry need more
of young blood as enthusiasm is an integral part of the industry.
 Though the conditions in India have improved significantly after economic
reforms, there is a need to study the impact of taxation and government
policies on capital budgeting decisions of firms in India.

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 Maintaining the discipline through changing in human resources policies
and code of conducts.
 There is a need to investigate how firms deal with some typical problems of
the capital budgeting decision process in specialized areas such as high
technology and social expenditures because there is a great uncertainty about
the cash flows associated with high technology projects and the benefits
from a social project may only be indirectly associated with identifiable cash
flows.

BIBLIOGRAPHY

 Gernal information - www.ambujacement.com

 Company history- https://en.wikipedia.org/wiki/Ambuja_Cements
 Financial information-
www.moneycontrol.com/india/stockpricequote/cement-
major/ambujacements/AC18
https://economictimes.indiatimes.com › Markets › Stocks › Stock Price
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