END TERM REPORT

ON
STATISTICAL ANALYSIS OF CEMENT INDUSTRY,
INDIA
Submitted to: Dr. S. Maheswaran

Group No.: 3
Section: E
Submitted by:
1.
2.
3.
4.

Shweta Hasija (2012305)

Shafique Gajdhar (2012289)
Satakshi Rani (2012273)
Ronak Chandak (2012257)

OBJECTIVES

To study the effect of selling and distribution expenses on total sales of the company
To figure the market leader
Comparison of the market leader with the other key players
To draw relevant inferences from the market study
To highlight the application of various statistical tools in real time markets

METHODOLOGY

Sector Selection
The immense growth and earning capacity and significance of the Cement industry in the Indian
economy drove us to select this particular topic.
Data Collection
Data from companies annual reports including their profit and loss accounts is the major source of
data collected through the internet.
Statistical Computations
We have majorly concentrated on statistical tools that are simple yet valuable and significant for
analysis purpose.
Comparison
A comparison of the calculated values has been conducted to facilitate analysis and to reach
informative results.
Inferences and Conclusions
We have attempted to draw relevant inferences and conclusions from our study of statistical values
calculated.

The Indian Cement Industry- A Brief Introduction

Cement is one of the core industries which plays a vital role in the growth and expansion of a nation. The industry
occupies an important place in the Indian economy because of its strong linkages to other sectors such as construction,
transportation, coal and power. India is the second largest producer of quality cement in the world.
The cement industry in India comprises 139 large cement plants and over 365 mini cement plants. Currently, there are
40 players in the industry across the country. The demand for cement, being a derived one, depends mainly on the
industrial activities, real estate business, construction activities and investment in the infrastructure sector.

Cement Industry Categorization

Cement Industry

Large cement plants

Mini and white cement plants

Cement plants: 365

Effective capacity: 11.1 mtpa

Cement plants: 139

Effective capacity: 234.3 mtpa

Sector Outlook

India is the second-largest cement market in the world, accounting for 78 per cent of global cement
production
India exports cement to more than 30 countries
Cement production of one million tonnes is estimated to generate downstream employment for 50,000
people

Companies for Analysis

ACC
Ambuja Cement
Ultratech

Analysis of Cement Industry

Strengths

Robust infrastructure growth

Large export market
Low per capita consumption indicating growth potential

Structural drivers

Increasing presence of Tier II cement players

Use of alternate fuels to lower production costs and emissions

Attractive Opportunities
Cement Demand-Supply
Gap
Deficit of 2.2 mpta
5.2
3
Under-supplied North East region, which is experiencing robust growth in demand for cement.

source: http://www.ibef.org/industry/cement.aspx

REGRESSION ANALYSIS: Turnover(T) versus Selling and Distribution(S&D)

Cement is a commodity and its selling depends on availability and reach to the customer. The main focus of
companies is to make it available to the customer thus maintaining stock on retailer side is very vital. It
requires a very vast, healthy distribution chain to maintain the stock which leads to more inflows of money in
selling and distribution. Thus selling and distribution has an impact on total sales of a cement company.
The regression equation is
T= a S&D +b
T is the dependent variable and selling and distribution is the independent variable (includes freight charges,
store charges, advertising charges). Regression analysis will imply how selling and distribution expenses affect
the turnover of the company. The study considers top 3 cement companies by market share in India.

ACC Ltd.

YEAR

2011
2010
2009
2008
2007
2006
2005
2004
2003
2002

SALES(y)

SELLING AND
DISTRIBUTION EXPENSE(x)

10,478.39
8,563.71
8,724.24
8,234.02
7,848.32
6,453.07
3,717.18
4,539.35
3,889.65
3,354.94

2,142.16
1,697.26
1,636.93
1,597.36
1,638.95
1,326.94
845.31
915.47
819.58
741.36

Regression Statistics
Multiple R
0.993541
R Square
0.987124
Adjusted R
Square
0.985515
Standard Error 305.7646
Observations
10

Source : www.captialine.com
ANOVA
Regression
Residual
Total
Coefficients
Intercept
X Variable 1

Df
1
8
9
Standard
Error

SS
57341893
747935.8
58089829
t Stat

P-value

MS
57341893
93491.98

Lower 95%

F
613.3349

Upper
95%

Significance F
7.55377E-09

Lower
95.0%

Upper
95.0%

-453.69 300.0296 1.51215 0.168947 -1145.55972 238.1792 -1145.56 238.1792

5.264433 0.21257 24.7656 7.55E-09 4.774244737 5.754621 4.774245 5.754621

RESIDUAL
OUTPUT

PROBABILITY
OUTPUT
Residuals
-345.177
82.28887
560.4221
278.5157
-326.132
-78.8263
-279.208
173.6099
28.71635
-94.2097

Standard
Residuals
-1.19738
0.28545
1.944036
0.966137
-1.13131
-0.27344
-0.96854
0.602232
0.099614
-0.3268

Percentile
Y
5 3354.94
15 3717.18
25 3889.65
35 4539.35
45 6453.07
55 7848.32
65 8234.02
75 8563.71
85 8724.24
95 10478.39

X Variable 1 Line Fit Plot

12,000.00
10,000.00
8,000.00
6,000.00

4,000.00

Predicted Y

2,000.00
0.00
0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

X Variable 1

Normal Probability Plot

1
2
3
4
5
6
7
8
9
10

Observation

Predicted
Y
10823.57
8481.421
8163.818
7955.504
8174.452
6531.896
3996.388
4365.74
3860.934
3449.15

12000
10000
8000
6000
4000
2000
0
0

20

40

60

Sample Percentile

80

100

X Variable 1 Residual Plot

800

Residuals

600
400
200
0
-200 0.00

500.00

-400

1,000.00

1,500.00

2,000.00

2,500.00

X Variable 1

The Regression equation for ACC is

T= -453.7+ 5.27 S&D
This indicates that for each unit increase in S&D (selling and distribution), T(turnover) is predicted to
increase by 5.27 units and the turnover will decrease by 432.7 units if there is no expenditure on selling and
distribution.

ULTRATECH CEMENT
YEAR

SALES(y)

SELLING AND
DISTRIBUTION
EXPENSE(x)

2011
2010
2009
2008
2007
2006
2005
2004
2003

20,579.84
14,961.27
7,729.13
7,160.42
6,285.80
5,484.04
3,785.29
3,057.92
2,693.15

4,239.12
3,232.12
1,618.47
1,378.67
1,253.98
1,096.41
924.9
646.47
631.16

Source: www.Capitaline.com

Regression Statistics
Multiple R
0.997733
R Square
0.995471
Adjusted R
Square
0.994824

Standard Error
Observations

430.9896
9

ANOVA
Significance
df
SS
MS
F
F
1 2.86E+08 2.86E+08 1538.616
1.82E-09
7 1300264 185752.1
8 2.87E+08

Regression
Residual
Total

Coefficients

Standard
Error

t Stat

P-value

Lower
95%

Upper
95%

Lower
95.0%

Upper
95.0%

-70.6001

250.3321

-0.28203

0.78608

-662.542

521.3413

-662.542

521.3413

4.817976

0.122829

39.2252

1.82E-09

4.527532

5.108419

4.527532

5.108419

Intercept
X Variable
1

RESIDUAL OUTPUT

1
2
3
4
5
6
7
8
9

Predicted Y
20353.38
15501.68
7727.149
6571.799
5971.045
5211.877
4385.546
3044.077
2970.314

Residuals
226.4622
-540.406
1.980699
588.6213
314.7547
272.1632
-600.256
13.84327
-277.164

Standard Residuals
0.561726
-1.34045
0.004913
1.460041
0.780731
0.675085
-1.4889
0.034337
-0.68749

Percentile
5.555556
16.66667
27.77778
38.88889
50
61.11111
72.22222
83.33333
94.44444

X Variable 1 Residual Plot

Residuals

Observation

PROBABILITY OUTPUT

800
600
400
200
0
-200 0.00
-400
-600
-800

1,000.00 2,000.00 3,000.00 4,000.00 5,000.00

X Variable 1

Y
2693.15
3057.92
3785.29
5484.04
6285.8
7160.42
7729.13
14961.27
20579.84

X Variable 1 Line Fit Plot

25,000.00
20,000.00
Y

15,000.00
Y

10,000.00

Predicted Y

5,000.00
0.00
0.00 1,000.002,000.003,000.004,000.005,000.00
X Variable 1

Normal Probability Plot

25000

20000
15000
10000
5000
0
0

20

40

60

80

100

Sample Percentile

The Regression equation for Ultratech is

T= -70.6 + 4.81 S&D
This indicates that for each unit increase in S&D (selling and distribution), T(turnover) is predicted to
increase by 4.81 units and the turnover will decrease by 70.6 units if there is no expenditure on selling and
distribution.

AMBUJA CEMENT
YEAR

SALES(y) SELLING AND

DISTRIBUTION
EXPENSE(x)

2011
2010
2009
2008
2007
2006
2005

9,588.33
8,257.03
7,721.42
7,075.51
6,396.20
7,016.70
3,025.84

1,951.84
1,719.00
1,459.14
1,321.74
1,202.29
1,357.17
555.45

2004
2003
2002

2,301.28 464.59
2,025.30 390.44
1,582.63 242.09

Source:www.Capitaline.com
Regression Statistics
Multiple R

0.996094

R Square

0.992204

Adjusted R Square

0.991229

Standard Error

276.7757

Observations

10

ANOVA
df

SS

MS

Regression

77995906

77995906

Residual

612838.2

76604.77

Total

78608744

Intercept
X Variable 1

Significance F

1018.16

1.01E-09

Coefficients

Standard
Error

t Stat

P-value

Lower
95%

Upper
95%

Lower
95.0%

Upper
95.0%

-308.4444

184.7216

1.66978

0.133512

-117.524

734.4131

117.524

734.4131

4.867499

0.152545

31.90862

1.01E-09

4.51573

5.219269

4.51573

5.219269

PROBABILITY
OUTPUT

RESIDUAL OUTPUT

Observation

Predicted
Y

Residuals

Standard
Residuals

Percentil
e

1
2
3
4
5
6
7
8
9

9809.024
8675.676
7410.807
6742.013
6160.59
6914.468
3012.097
2569.836
2208.911

-220.694
-418.646
310.6126
333.497
235.6098
102.2315
13.74311
-268.556
-183.611

-0.84575
-1.60434
1.19033
1.278028
0.902904
0.391772
0.052666
-1.02916
-0.70363

5
15
25
35
45
55
65
75
85

1582.63
2025.3
2301.28
3025.84
6396.2
7016.7
7075.51
7721.42
8257.03

10

1486.817

95.8127

0.367174

95

9588.33

X Variable 1 Residual Plot

400
Residuals

200
0
-200

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

-400
-600

X Variable 1

X Variable 1 Line Fit Plot

12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00

Y
Predicted Y
0.00

500.00 1,000.001,500.002,000.002,500.00
X Variable 1

Normal Probability Plot

15000
Y

10000
5000
0
0

20

40

60

80

100

Sample Percentile

The Regression equation for Ambuja Cement is

T= -308.44 + 4.86 S&D
This indicates that for each unit increase in S&D (selling and distribution), T(turnover) is predicted to
increase by 4.86 units and the turnover will decrease by 308 units if there is no expenditure on selling and
distribution.

Conclusion
The regression analysis of last ten year data shows that the turnover of ACC is most affected by Selling and
Distribution expense and the company that is least affected by the Selling and Distribution expense is
Ultratech.