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Cement Industry

Fundamental
Analysis

Ultratech Cement
Ltd.
Prepared By-

Chandraveer Singh
1

PGDM RM
Roll No. 46

Introduction
UltraTech Cement Limited is India's biggest cement company and Indias
largest exporter of cement clinker and is based in Mumbai, India. The company is
part of the Aditya Birla Group and division of Grasim Industries. The company was
started in 1987 with its founder being Kumar Mangalam Birla. The current
Managing Director of the company is Mr. O P Puranmalka. The company right now
has a 26% market share in the Indian Cement Industry.
Products

It manufactures and markets ordinary Portland cement, Portland blast furnace


slag cement, white cement and Portland Pozzolana cement.

It also manufactures ready-mix


Concrete Blocks(AAC Blocks) with
markets span countries around the
East.
UltraTech is India's largest exporter
are:

concrete (RMC) and Autoclaved Aerated


brand name Ultratech Xtralite. The export
Indian Ocean, Africa, Europe and the Middle
of cement clinker. Some of the brands it has

UltraTech Cement
Birla White
UltraTech Ready Mix Concrete
UltraTech Xtralite
UltraTech Building Solution

Indian Cement Industry


Expected

Growth of Cement capacity

Cement Capacity (MTPA)


600
400
200
0
Indian

360
2013-14

550

Cement
Capacity
(MTPA)

2020

Cement Industry has a CAGR of 8% in the last decade


2005-2015
FDI inflow into the sector has been to the tune of 3084.89
million USD between 2000-2014

Per capita consumption of


cement

365 kg
192kg

India
Global
The Sector is heavily backed by infrastructure and demand for
housing sector in India.

Consumption pattern: (In %)

11
18

9
67

Housing Sector
Infrastructure
Commercial
Construction
Industrial
Construction

Competition in the Industry


3%
97%

365 Small
Plants 3% of
Total
Production

188 large
Cement Plants97% of Total
Top 20% cement companies account for almost
Production

70% of total cement production in the country.

Major Competitors of Ultratech Cement Ltd .

Business model

Components of Cement & their Availability


-Major Raw
Material Deposits

USP of UltraTech
LOW

COST OF
PRODUCTION
(Economies of
Scale)
Close Proximity to
Deposits of plants
and their Markets
(Less Handling
Costs)
Most Plant are near
the Deposits in
India (as shown in
the map)

-UltraTech
Plants

Major Cost of the Company


201314

Power and fuel cost account


for 20% of the total income
whereas the industry on an
average takes about 24% .

201213

Miscellaneous expenses
have increased considerably
in this year which comprises
mostly the transportation
cost but is still at par with
industry standards.

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Companies Efforts to reduce


the cost of production
Proximity

to plant
Efficiency in energy consumption
Producing a part of its energy needs
through small plants
Using alternative and cheap energy
sources to control the power cost
Focussing on reducing the distribution and
transportation cost by placing plants closer
to market as well as resources available.

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UltraTech Cements Subsidiary Co.


List
The Model of the company is to make Project/Plant based subsidiary
companies to manage the plants and their costs separately with a
more focussed management of these companies towards their own
plant issues. Some of the Subsidiaries are:
Dakshin

Cements Limited
Harish Cement Limited
Gotan Lime Stone
Khanij Udyog Private Limited
Bhagwati Lime Stone Company Private Limited
UltraTech Cement Middle East Investments Limited
UltraTech Cement Lanka (Pvt) Limited
PT UltraTech Mining Indonesia and
PT UltraTech Investments Indonesia

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Factors Detrimental to the


Industry
Demand is low as compared to the supply
levels .
Supply to be controlled in stipulated time
period to match the demand but will
drastically affect the capacity utilisation of the
whole industry
Bulky commodity so freight charges are little
higher as compared to other industries
These bullet points will affect Ultratech also in
this span of time

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Bibliography
www.ultratech.com
www.equitymaster.com
www.ibef.org
www.moneycontrol.com
www.wikipedia.org
www.morningstar.in
www.hindubusinessline.com

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Thank You