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Presentation By Ambuja Cement

Indian Economy GDP Growth - Estimates (2003 - 2004). 1Q 2004 (A)Estimated '03-04Service Sector 7.6 % 7.3 % Industrial Sector 5.8 % 5.0 % Construction Sector 5.7 % 6.7 % Agriculture Sector 1.7 % 10.7 % . CMIE - Estimates . Economy expected to grow by about 7.4% .

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Presentation By Ambuja Cement

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    1. Presentation By Ambuja Cement

    2. Indian Economy GDP Growth - Estimates (2003 - 2004) 1Q 2004 (A) Estimated ’03-04 Service Sector 7.6 % 7.3 % Industrial Sector 5.8 % 5.0 % Construction Sector 5.7 % 6.7 % Agriculture Sector 1.7 % 10.7 %

    3. Cement in India Why ? Indian economy will keep growing in band of - 5 - 7% annually To achieve larger GDP growth rate Country will need more Roads, Ports, Irrigational facilities & other Infrastructure Housing will continue to be a major construction area Cement as a product or technology does not suffer from obsolescence There is no “Substitute” for Cement

    4. Roads - New Dimension Major Investments in Road Development Special Cess of Rs. 1.50 per liter on petrol and diesel for Road Development Total outlay over next 2/3 years - Rs. 600 Billion

    5. Road Development Golden Quadrilateral- 5846 Sq.. Km (Already Completed 1408 km)(Expected completion - June 2005) North-South & East-West Corridors - 7300 Sq.. Km ( Already Completed 980 km) (Expected completion - 2007) 48 New Road project - 10000 Km. (Expected completion - 2006) Government commits to 25% Concrete Roads Expected additional consumption -3/4 mn tonnes per annum

    6. Housing Construction Huge potential: Unfulfilled demand - 33 mn units Increasing disposable income Younger generation aspiring to have “Own House” Low real estate prices Easy availability of Housing Finance - Growing over 30% Interest Rates have come down by 700 bps in last 3 years Monthly instalment on mortgage is now equivalent to rentals

    7. Cement Supply Other side of the equation

    8. Cement Supply - The Dynamics Cement Production 2003 111 mn tonnes Maximum Clinker Production Capability (Including Sanghi) 103 mn tonnes Current Clinker to Cement Conversion Ratio (the best in last 5 years) 1.21times Maximum Cement Production Capability 127 mn tonnes at Conversion Ratio - 1.23

    9. Cement Supply - A Reality Check No new cement capacity under construction Lenders unwilling to fund new cement plants Maximum Cement production capability at a conversion ratio of 1.23 - 127 mn tonnes Existing players going through Consolidation

    10. Indian Cement Industry Next 3 Years Financial Clinker Cement Cement Demand Year Capacity Conversion Production Ratio at Peak 8% ( Maximum Level) 2003(A) 103 - 111 111 2004(E) 103 1.21 125 117 2005(E)* 105 1.22 128 126 2006(E)* 107 1.23 132 136

    11. Cement Outlook Cement demand growth should exceed 8% if the GDP is growing at over 6 % FY 2003-04 would be the First year in last decade to not to have a single new plant commissioning Next 2 years also there is no new capacity expected Cement Demand to expected exceed Supply after a gap of several years All these point to good demand & better Cement Prices

    13. Growth With A Sound Business Model

    14. Our Business Model Own Infrastructure -Logistics Management Strong brand & efficient distribution Presence in prime markets Lowest cost cement producer

    15. Own Infrastructure 7 Owned Cement Ships for transporting Cement by Sea Large port in Gujarat to handle export of Cement ( 2 mn tonnes this year) & Import of Coal / Oil 3 Cement receiving terminals 190 MW of Captive Power Plants at various Cement Plants to give reliable and cheap power

    16. Strong Brand India - A bagged market Individual home builder - key driver of demand

    17. Lowest Cost Producer FY 2003 FY 2002 Increase / (Decrease) (%) Power 187 179 4 Fuel 227 254 (11) Raw material 136 133 2 Consumables 47 48 (2) Direct cost 597 614 (3)

    18. Gujarat Ambuja Cement - Shareholding GAC ( 12 mn ) 40% ACIL 60% Pvt. Equity Investors ACC ACEL 14.4% 94% ( 17 mn ) ( 2 mn )

    19. Convertible Bonds Brief terms: Date of Issuance January 2001 Coupon 1%p.a. Maturity January 2006 Conversion Price Rs. 222 Conversion Into GDRs/ Shares Amount US$ 100 million Conversion Option of the Bondholder Any time till maturity Yield to maturity at redemption 4.6% Call Option of company From January 2004 till Maturity

    20. Gujarat Ambuja Cements Limited (Effect of Conversion) Before After Sources of Funds Shareholders’ Funds 16166 20680 Deferred Tax 3053 3053 Convertible Bonds 4614 -- Debt 12436 12436 Total 36269 36269 Application of Funds Gross Fixed Assets 30239 30239 Less: Depreciation 10120 10120 Net Fixed Assets 20119 20119 Investments in ACIL 8572 8572 Other Investments 2445 2445 Net Current Assets 5133 5133 Total 36269 36269

    21. % Tenor Long Term 79 Short Term 21 Total 100 Mix Rupee Debt 56 Foreign Currency Debt 44 Total 100 Debt Profile (As of 30.9.2003)

    22. Gujarat Ambuja Cement Limited Valuation EV/Ton US$ 90 EV/EBIDTA 9 times Cash Earning per Shares (CEPS) Rs. 27 Earning Per Shares (EPS) Rs. 14 Price to Cash Earning 10 times Debt/ Equity -( on Conversion) 0.60 Debt/ EBIDTA - (on Conversion) 2.4 times

    23. THANK YOU

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