Project By:

Ritish Adhikari
Rajveer Singh
Rahul Agarwal
Mahima Choudhary
Pooja Makhija
Virek Shah
One of Core industries and plays a vital role in
the growth and development of the nation.
Second Largest Producer in the world
The production of cement has increased at a
compound annual growth rate (CAGR) of 9.7
per cent to reach 375million tones (MT) during
FY 1314.
Cement Consumption:
67% -Housing sector
13% -Infrastructure Sector
11%-Commercial Sector
9%- Industrial Sector
The Ramco Cements Limited (Formerly
Madras Cements Ltd) is the flagship
company of the Ramco Group, a well-
known business group of South India. It is
headquartered at Chennai.
The company is the fifth largest cement
producer in the country.
Ramco is the most popular cement brand
in South India.
Ramco deals with Portland cement, Ready
Mix Concrete and Dry Mortar products.
Integrated Cement Plants , Grinding Units,
Packing Terminals of the company are
located in Tamil Nadu , Chennai ,
karnataka , West Bengal, Andhra pradesh .





Ramco Cements Balance Sheet :
Price/Earnings Ratio:
(Market Price per Share)/ (Net Income per Share)
=334.10/5.79 = 57.70 Times
Impact:
With a comparatively higher Market price than the Industry average of INR 175,
and lower Earnings per share, Ramco is deemed to be having a high growth
prospect with little risk.

Return on Assets:
[Net Income +Interest (1-Tax Rate)] / [Total Assets]
= [137.7 + 188.95(1-0.107)] / [6868.5]*100= 4.46%
Impact:
Industry Average: 13.67%. A significantly higher Long Term borrowing which in
turn a higher interest expense of 188.95 Crore, i.e., 29% is the driver of to a
lower Return on Assets.


Return on invested capital =[Net Income +Interest (1-Tax
Rate)] / [Long term Liabilities + Shareholders Equity]=
[137.7 + 188.95(1-0.107)]/2482.08 = 12.34 %
Impact: This calculation is used to assess a company's
efficiency at allocating the capital under its control to
profitable investments.


Earnings Per share = Net income / number of shares
Outstanding = 137.7 / 2379.69 = Rs. 5.78
Impact : Earnings per share is generally considered to be the
single most important variable in determining a share's price.
It is also a major component used to calculate the price-to-
earnings valuation ratio.


Return on Share Holders Equity:
Net Income/Share Holders Equity
=[137.7/2482.08]*100= 5.54%

Impact:
Industry Average: 10%. A significantly higher Long Term
borrowing which in turn a higher interest expense of 188.95
Crore, i.e., 29% is the driver of to a lower Return on Share
Holders Equity.

Asset Turnover:
Sales Revenues/Total Assets
=3683.51/6868.56= 0.5362 Times
Impact:
Industry Average: 0.5. Ramcos industry average is at par
with the industry average. It means that Ramco is utilizing
the correct amount of Assets to generate Sales.



Equity Turnover:
Sales Revenue/Share Holders Equity
=3683.51/2482.08= 1.484 Times
Impact:
Industry Average: 2.3. Ramco can make more sales than
what it has done. Since it is a high growth company, there
is every feasibility that it will come up with a higher equity
turnover in the future.

Capita Intensity:
Sales Revenue/Property Plant and Equipment
=3638.51/ (6675.44-2034.37) = 0.783 times.


Dividend pay out
Dividend/ net income
=17.3
Impact: The part of the earnings not paid to investors is left
for investment to provide for future earnings growth. Investors
seeking high current income and limited capital growth prefer
companies with high Dividend payout ratio. However investors
seeking capital growth may prefer lower payout ratio because
capital gains are taxed at a lower rate.

Debt equity ratio
Long term liabilities/shareholders equity
=2482.08/2681.80= 92.5%
Impact: It indicates what proportion of equity and debt the
company is using to finance its assets. A high debt/equity
ratio generally means that a company has been aggressive in
financing its growth with debt. This can result in volatile
earnings as a result of the additional interest expense.


Inventory turnover ratio
Cost of sales/inventory
= 3683.51/685.53 = 5.37
Impact: A low inventory turnover ratio is a signal of
inefficiency, A high inventory turnover ratio implies
either strong sales or ineffective buying (the
company buys too often in small quantities,
therefore the buying price is higher).

Financial leverage ratio
Assets/shareholders equity
=6868.56/2482.08= 2.76
Impact: high financial leverage shows that
companys more trusted and a good investment for
investors.



Work capital ratio
Sales revenue/working capital
=3683.51/455.14= 8.093
Impact: The working capital turnover ratio measures how well a company
is utilizing its working capital to support a given level of sales A high
turnover ratio indicates that management is being extremely efficient in
using a firm's short-term assets and liabilities to support sales.
Conversely, a low ratio indicates that a business is investing in too many
accounts receivable and inventory assets to support its sales, which
could eventually lead to an excessive amount of bad debts and obsolete
inventory.

Current ratio
Current assets/current liabilities
=1249.54/1704.68= 0.733
Impact: Current ratio is a financial ratio that measures whether or not a
firm has enough resources to pay its debts over the next 12 months.


Balance Sheets for the last 5 Fiscal.
Profit and Loss for the last 5 Fiscal.

Cash Flow for the last 5 Fiscal.

RECENT NEWS OF RAMCO :
Ramco Cement Ltd is among the lowest-cost cement
producers in India, with operating costs (excluding freight
costs)/tn. at Rs2, 459 versus industry average of Rs2, 564 in
FY13.This was primarily driven by higher usage of captive
power, strategic location of plants, investment in operating
cap-ex and a low fixed-cost base.

Presence in the southern region, which is facing an
oversupply situation but able to manage higher capacity
utilization than the industry average.

Ramco cements Ltd is among the first to adopt dry process
technology in South India. Provision of railway sidings to all
its plants, which help in handling large material
inflow/outflow& cost under control.







Demand has been consistently weak over the last 12-18 months FY14
production (proxy for demand) grew 3% vs. FY04-14E demand growth of 7% pa.

The key reason for demand weakness has been a slowdown in both government
and private expenditure and a slow pace of infrastructure growth.

The recent election win by the right of center BJP-led NDA has positive
implications for the sector.

Cement demand should be boosted by the new governments stated
focus on infrastructure and low-cost housing in the coming years.

With the recent proposal given by ministry of making the roads with
cements and not by tar cement industry has all the reasons to get a
push.

With lots of budget allocated for construction of ports, road & in
infrastructure in recent budget cement industry is in line to increase the
market supply.