1) The document analyzes India Cements Ltd, the largest cement producer in South India. It discusses the company's business model, products, operations, financial performance, and strategies. 2) Key aspects of the business model include manufacturing various cement types and distributing through dealers. The main costs are energy, transportation, and raw materials. 3) In the most recent quarter, the company saw dips in sales, profits, and capacity utilization due to high costs and lower demand. Realization per ton increased but energy and employee costs per ton also rose.

1. INDIA CEMENTS LTD.
COMPANY ANALYSIS
INDIA CEMENTS LTD.
DAUD AHMED BUKSH (6010020752859)
REPORT

2. INDIA CEMENTS LTD.
TABLE OF CONTENTS
1.Preamble...............................................................................................................................................................4
2.Background............................................................................................................................................................4
3.Product & Services.................................................................................................................................................4
4.Business Model......................................................................................................................................................5
4.1Value Proposition: .........................................................................................................................................5
4.2Target Customer:.............................................................................................................................................5
4.3Distribution Channel:.......................................................................................................................................5
4.4Promotion: Hire Promotion.............................................................................................................................5
4.5Revenue Streams:............................................................................................................................................5
4.6Core Capabilities: ............................................................................................................................................5
4.7Value Configuration:........................................................................................................................................5
4.8Partner Network:.............................................................................................................................................5
4.9Cost Structure ............................................................................................................................................5
5.Business Analysis...................................................................................................................................................6
5.1Competition.....................................................................................................................................................6
5.2Issues & Challenges.........................................................................................................................................6
6.Operational Performance..................................................................................................................................8
6.1Sales & sales Growth.......................................................................................................................................8
6.2PBDIT & OPM...................................................................................................................................................8
6.3Cost Structure..................................................................................................................................................8
7.Operational Metrics...............................................................................................................................................9
7.1Gross realization per ton CPLY.........................................................................................................................9
7.2Energy cost per ton CPLY.................................................................................................................................9
7.3Capacity utilization CPLY..................................................................................................................................9
7.4PBDIT per ton CPLY..........................................................................................................................................9
6.5 Employee cost per ton........................................................................................................................10
8.Financial Performance.........................................................................................................................................10
8.1PAT & PAT Growth.........................................................................................................................................10
8.2ROCE & ROE...................................................................................................................................................10
8.3DEBT Equity Ratio..........................................................................................................................................10
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3. INDIA CEMENTS LTD.
8.4Cash Flow Analysis.........................................................................................................................................11
9.Capital Market Performance..............................................................................................................................11
9.1RSI..................................................................................................................................................................11
10.Recent Strategy.................................................................................................................................................11
10.1Growth Drivers............................................................................................................................................11
10.2Value Drivers...............................................................................................................................................12
11.Outlook..............................................................................................................................................................13
11.1Economic point of view...............................................................................................................................13
11.2Industry point of view..................................................................................................................................13
11.3Company point of view................................................................................................................................13
12.Steps taken to defend crisis...............................................................................................................................13
12.1Steps taken to cut cost................................................................................................................................13
12.2Steps taken to increase in revenue..............................................................................................................13
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4. INDIA CEMENTS LTD.
1. Preamble
Due to the keen interest of the promoter, the Company under has been promoting different sports activities towards
contribution to the society. Its cricket franchise “Chennai Super Kings” has won IPL III Trophy in April 2010.In the
TNCA Championship, the Co. is one of the active participant. The Co’s wholly owned subsidy (ICLFSL),
acquired 60.89% of equity share capital of Indo Zinc Limited (IZL). Its privately placed in March, 2010, 24594000 no.
of equity shares at a price of Rs.120.20 per share (including premium of Rs.110.20 per share) to Qualified Institutional
Buyers.
2. Background
The India Cements Ltd was established in 1946 it is the largest producer cement in South India. S.N.N.
Sankaralinga Iyer & T.S.Narayanaswami are the founding
Pillars of the Co. Presently it have seven plants spread over
Tamilnadu and Andhra Pradesh .Company As on March 2009 Shareholding Pattern
have increased multifold to 9.1 million tons per annum. It's Depositary
Others 1%Promoter
plants are well spread with three in Tamilnadu and four in 22% 22%
Andhra Pradesh which cater to all major markets in South
Body Corporate
India and Maharashtra. 12%
Institution
43%
3. Product & Services
Promoter Institution Body Corporate Others Depositary
SOURCE: BSEINDIA.COM
PRODUCTS.
PRODUCT
CATEGORY BRANDS
NAME
ORDINARY
Coromandel king, Sankar Sakthi
PORTLAND OPC 53,OPC-43 & OPC-33 Grade Cement
& Rassi Gold
CEMENT
IS 1489 (PART 1) 1991, Portland Pozzolona
PORTLAND Cement- specification (fly ash based). Blended Coromandel Super Power,Sankar
POZZOLON
Cement Super PowerRassi Super Power.
A CEMENT IS 1489 (PART 2) 1991, Portland Pozzolona
Cement- specification (clay ash based).
SULPHATE
RESISTANT Sulphate Resisting Portland Cement(SRC) Sankar SRC
CEMENT
SOURCE: COMPANY WEBSITE
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5. INDIA CEMENTS LTD.
4. Business Model
4.1 Value Proposition:
The Company value proposition consist of manufacturing varieties of cement like Ordinary Portland Cement,
Portland Pozzolona cement & Sulphate resistance cement.OPC is mainly used in RCC works, paving blocks ,tiles
building block, runways ,concrete roads etc.Whereas PPC is used in Hydraulic structures, marine structures etc It
produces good quality of Cement( brands like- Sankar Super Power, Coromandel Super Power and Raasi Super
Power).
4.2 Target Customer:
Customer is the pillar of any business. The company main revenue is from Housing, Infrastructure &
Commercial Projects .
4.3 Distribution Channel:
The Company distributes its product through different channels. The main distribution channel is
through dealers. Also through C & F agents, own Government Warehouses. The cement is transported to the
dealers/distributors and also to sub dealers who finally sell it to the customers.
4.4 Promotion: Hire Promotion
The Company is doing promotion through Advertisement, Corporate Social Responsibility
(CSR),RMC(units),Workshops & Conferences. Besides this customer awareness programmes, mason
workshop and educational programmes are also used by the company.
4.5 Revenue Streams:
The revenue of the Company is mainly from South India and South Maharashtra up to Mumbai.
4.6 Core Capabilities:
The Company's plants are well spread with three in Tamilnadu and four in Andhra Pradesh which cater to all major
markets in South India and Maharashtra. The Company is the market leader with a market share of 28% in the South.
The Company has access to huge limestone resources and plans to expand capacity by de-bottlenecking and
optimization of existing plants as well as by acquisitions.
4.7 Value Configuration:
The company using cutting edge technologies like cement manufacturing process, mining of
limestone, drilling/blasting methods of mining, mining with surface miner, crushing of
limestone,prehomogenisation,grinding of raw materials,homogenization,pyroprocessing. These processes are
carried out of its plant to speed up the production & manufacturing process.
4.8 Partner Network:
The Company in its partner network includes mainly dealers, retailers & renowned business
Cost Structure as % Sales - March 2010
associates. It has a strong distribution network with over 10,000 stockists of whom 25% are dedicated
4.9 Cost Structure
Transportation Interest
& handling stock in trade 4%
20% 16%
Other
11% Depriciation
The major cost element of the total cost is energy (28% of Energy
28% Raw materials
7%
15% Tax
5
Staff
cost 1%
9%
SOURCE: BSEINDIA.COM

6. INDIA CEMENTS LTD.
the total cost).Followed by transportation & handling which
represents (20% ),raw material (15%),staff cost(9% ).
5. Business Analysis
5.1 Competition Installed Capacity
Market share comparison of different players
Market Structure seems to Oligopolistic Competition. In the industry
17%
ACC is the market leader, whereas the five major players like (ACC,
35%
Gujarat ambuja, Ultratech, Grasim & India Cements 65 % of total
market share. 13%
8% 15%
12%
ACC Gujarat Ambuja Ultratech Grasim India Cements Others
MARCH 2010
5.2 Issues & Challenges
Lack of Raw Material:
More limestone & coal is required, which is the main issue.
Lack of Equipment:
Good technology require for manufacturing of cement.
Lack of Skilled Labour:
skilled & domain knowledge require for employees for smooth operation of heavy machines.
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7. INDIA CEMENTS LTD.
High Excise Duty:
High export duty is the main problem for exporting of cement.
Fluctuation in oil prices: Oil prices effects the cement industry.
Regional disequilibrium of demand and supply:
Fluctuation in prices effects demand & supply of cement.
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8. INDIA CEMENTS LTD.
6. Operational Performance
10200
10000
Sales and Sales Growth 14.00
12.00
6.1 Sales & sales Growth 9800
10.00
Dip in Sales & sales growth 9600
8.00
9400
9200 6.00
%
During the quarter ended JFM 2010, company’s sales witnessed dip
M
R
n
9000 4.00
s
of -1.64% to Rs 9743 mn compared to Rs 9905 mn in quarter ended JFM 8800
2.00
8600
2009. The dip rise was due to dip in realization, low capacity addition 8400
0.00
& decrease in shipping operations. 8200 -2.00
8000 -4.00
OND 08 JFM 09 AMJ 09 JAS 09 OND 09 JFM 10
Net Sales(LHS) Growth (RHS)
SOURCE: BSEINDIA.COM
3500.00 35.00
Operating Profit & OPM
3000.00 30.00
2500.00 25.00
6.2 PBDIT & OPM
n 2000.00 20.00
Dip in PBDIT & OPM m
.
s
R 1500.00
%
15.00
During the quarter ended JFM 2010, company’s operating witnessed dip 1000.00 10.00
of 13.96% to Rs 1360 mn compared to quarter ended JFM 2009. 500.00 5.00
The dip rise was due to increase in fuel cost, increase in raw materials, 0.00
OND 08 JFM 09 AMJ 09 JAS 09 OND 09 JFM 10
0.00
increase in staff cost, increase in travelling & handling. PBDIT OPM
Source: bseindia.com
120.00
Cost Structure as % of Sales
100.00
80.00
6.3 Cost Structure
Rise of cost components 60.00
During the quarter ended JFM 2010, company’s cost structure 40.00
rise was due to increase in fuel cost, increase in raw materials,increase in
20.00
staff cost, increase in travelling & handling.Raw Material materials increase
of 15.75% to Rs 1380 Mn ,increase high transportation & 0.00
logistic. Depreciation increase 7.02%(Rs 615 mn),tax increase Tax Depriciation
jfm09
Interest Other Tran & handling
jfm10
Energy Staff cost Raw materials
1.63% (Rs 142.60 mn) .
SOURCE : BSEINDIA.COM
.
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9. INDIA CEMENTS LTD.
7. Operational Metrics 4380
Realization per ton
4360
4340
4320
7.1 Gross realization per ton CPLY 4300
Increase in realization per ton 4280
R
o
n
p
e
s
r
t
4260
During the quarter ended JFM 2009 realization per ton increase 4240
4220
to Rs 4354 per ton compared to Rs 4252 per ton in JFM 2008, 4200
this is mainly due to recession in 2008-09 (high inflation & low GDP). JFM 08 JFM 09
And also company’s net sales increase from Rs 35954 mn in March
SOURCE: COMPANY REPORTS
2009 to Rs 39545 mn .
4500
7.2 Energy cost per ton CPLY Energy Cost per tonne
4000
Energy cost rise due to production 3500
e 3000
n
During the quarter ended JFM 2009 energy per ton increase n
o
t 2500
r
e
to Rs 3919.12 per ton compared to Rs 3003.22 per ton in JFM 2008,this p
s
2000
R 1500
is mainly due to consumption of raw material increased to 1000
Rs 3699mn in March 2010 compared to Rs 3129 mn in March 500
2009,alsonew power plants started ,so company’s efficiency increased 0
JFM 08 JFM 09
SOURCE: COMPANY REPORTS
7.3 Capacity utilization CPLY 120 Capacity Utilization
100
80
During the quarter ended JFM 2009 capacity utilization
%
60
decrease to 70.35% from 104.81 % due to slowdown in
40
demand, high opearating cost, for that company not able to expand
it plant & also seasonal fluctuation of price. 20
0
JFM 08 JFM 09
SOURCE: COMPANY REPORTS
1200
7.4 PBDIT per ton CPLY Trend of PBDIT per ton
PBDIT dip due high operating cost 1000
800
n
o
t
r 600
e
p
s
During the quarter ended JFM 2009 PBDIT per ton decrease R
400
to Rs 597.46 per ton compared to Rs 999.56 per ton in
200
JFM 2008, mainly due to increase of operating expenses from
to RS 7606 mn to Rs 8383 mn & also co’s profit efficiency decreased. 0
JFM 08 JFM 09
SOURCE: COMPANY REPORTS
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10. INDIA CEMENTS LTD.
280 Employee Production
270
6.5 Employee cost per ton 260
250
Employee productivity low due to dip in realization. 240
230
220
m
o
p
n
u
d
P
e
E
y
/
c
s
r
t
l
i
210
During the quarter ended JFM 2009 Employee productivity decrease
200
to Rs 225 compared to Rs 269.56 per ton in JFM 2008, mainly due to JFM 08 JFM 09
increase of operating expenses & production from to RS 7606 mn to
Rs 8383 mn & also co’s profit efficiency decreased. SOURCE: COMPANY REPORTS
1600
PAT and PAT growth rate 16
1400 14
1200 12
8. Financial Performance 1000 10
%
800 8
m
R
n
s
600 6
8.1 PAT & PAT Growth 400 4
200 2
Growth rate of PAT is in downward trend
0 0
OND 08 JFM 09 AMJ 09 JAS 09 OND 09 JFM 10
During the quarter ended JFM 2010, overall company’s PAT & NPM came to Rs
383.20 mn & 3.93 % compared to JFM 09. The low margins was on account of PAT NPM (RHS)
low operating profit margin, high operating expenses, low growth in other income,
SOURCE: BSEINDIA.COM
higher depreciation & taxes.
35.00 Trend of ROE & ROCE
8.2 ROCE & ROE 30.00
ROE & ROCE both are falling
25.00
During the last three years ending March 2009-10, overall company’s 20.00
ROE & ROCE dip to 11.98% & 10.65 %.This showed that company % ROE
15.00 ROCE
are more depend on external financing & converting debts into FCCB .
10.00
Due to dip in realization sales decrease and for that profit also decrease.
5.00
0.00
2007-08 2008-09 2009-10
Source : COMPANY REPORTS
8.3 DEBT Equity Ratio
Debt Equity ratio is normal in last two years
During the last three years ending March 2009-10, overall company’s 1
Trend of D/E ratio
0.9
debt equity ratio remain same to some extent for last two years which 0.8
shows company issuing more FPO,converting debt into FCCB. 0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
10
2007-08 2008-09 2009-10
SOURCE: COMPANY REPORTS

11. INDIA CEMENTS LTD. 15000 Cash Flow Operation
8.4 Cash Flow Analysis
10000
Cash is spent on Financing Activities
5000
During the quarter ended JFM 10, in company’s cash flow statement
Cash from operating activities (mainly-depreciation & interest expense) 0
holds 40% ,while cash from investing activities(purchase Fixed Assets)&
m
R
n
s
OPERATION INVESTMENT FINANCE
cash from financing activities (took long term borrowings-mainly). -5000
Company is spending more on operating activities compared to
last year JFM 09. -10000
-15000
JFM 09 JFM 08
Source: Company reports
9. Capital Market Performance
131 Relative Strenght Index of Stock Price & Sensex
121
9.1 RSI
Negatively correlated with sensex. 111
101
During the last year 2009-10 share price of the company not in
91
constant trend with the sensex. This shoes company’s share is
negatively correlated. The reduction in share price due to increase 81
in cost, dip in capacity utilization, shipping & also due to 71
Government Regulations. 61
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SOURCE: BSEINDIA.COM
10. Recent Strategy
10.1 Growth Drivers
• The Company have a decent growth of 11.4 per cent in May 2010
• Capacity addition is carried out at Parli facility in Maharashtra
11

12. INDIA CEMENTS LTD.
• Due to the rise in demand from infrastructure projects ahead of the monsoon, and a fall in prices have rise
cement sales in May 2010
10.2 Value Drivers
Policies:-
The price of Cement have been fluctuating over the past year,and since price of not Uniform ,different prices are
charged per bag around the country.
Prices of Raw Materials:
Limestone prices had risen because of royalty based pricing which will increase cement price in future.
Government Regulations:-
Due to government regulations the problem of increasing fuel costs as new units do not get coal linkages .
Capacity Addition:-
The expectation of a slow in pace of projects being done by some companies may also hold prices firm. Capacity
addition over the last two years has fallen short of estimates as big names such as UltraTech, ACC, Grasim, JP
Associates and JK Lakshmi Cement have seen delays in their projects.
• The company continues to emphasize on cost cutting through enhanced productivity, reduction in energy
costs and logistics expenses.
• Importance is given for improving the efficiency in the operating parameters and for enhancement of
blended cement production in the overall mix.
• To operate with optimum man power, a fairly large reduction in man power through voluntary retirement
scheme (VRS) and training of priority employees has been made by the company.
• The up-gradation schemes taken on hand by the company to enhance the capacity referred to earlier, will also
simultaneously result in savings in power and fuel cost with the completion of these projects in addition to
protecting the market share of the company
• The Company has somewhat taken care of volatile fuel cost by having acquisitions in shipping.
• To restructure the financial position of the company various steps/measures have been taken through equity
infusion and debt reduction.
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13. INDIA CEMENTS LTD.
11. Outlook
11.1 Economic point of view
The GDP for the quarter ended March 2010 was Rs 5868331 crs,of which manufacturing industry contributes Rs
931101 crs.The performance of the Indian Economy in 2009-10 continued to be good with GDP growth at 7.4%
despite rise in crude oil prices and financial turbulence. The reasons are, the flow of substantial capital investment, the
fairly satisfactory performance of the industrial sector which recorded a growth of 8.5% and the rapid development of
the services sector which grew at 10.8% during the year.
11.2 Industry point of view
The cement industry in India has been enjoying its best period with a healthy growth in demand in the past two years.
The industry has been operating at its near full capacity during this period. The cement prices have been fluctuating
throughout the year with this firm demand position.
11.3 Company point of view
The company has achieved its best ever performance both in terms of operational and financial parameters in the 62
years history of the company. The Company for the year ended 31st March 2010 had not showed good result due
to low demand in growth in South during the year. The company PAT is Rs 35.43 mn as against Rs 43.21 in the
previous year.The gross turnover of the company for the year was at Rs 422.16 mn compared to last year Rs 395.45
mn which rose by 6.8%. The clinker production for the year 2009-10 of the company was at 8.68 mn tons growth of
24% & cement production was at 10.49 mn tone while the sale was at 10.50 mn tone compared to last year was 9.11
mn ton. The company’s sustained efforts towards cost reduction have mitigated the impact of the cost increases.
SOURCE : PRESS REALESE
12. Steps taken to defend crisis
12.1 Steps taken to cut cost
•
12.2 Steps taken to increase in revenue
____________________________________________THANK YOU______________________________________
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