AMBUJA CEMENT SHARE: BUSINESS CASE STUDY

VISION OF AMBUJA CEMENT SHARE 

To be the most sustainable and competitive company in their industry. 

MISSION OF AMBUJA CEMENT SHARE 

• DELIGHTED CUSTOMERS 
• ENLIGHTENED PARTNERS 
• LOYAL SHAREHOLDERS 
• INSPIRED  EMPLOYEES 
• ENERGISED  SOCIETY 
• HEALTHY  ENVIRONMENT    

COMPANY VALUE CHAIN  

• 33,665 New contractors enrolled on Abhimaan in 2021. 
• 43,000+ Sites provided with value added services. 
• 53,000+ Customers connected through digital platforms during the lockdown. 

KEY STAKEHOLDERS 

• Shareholders and investors 
• Suppliers 
• Employees 
• Construction professionals 
• Dealers  
• Customers 
• Community 
• Industry association 

SUSTAINABILITY TARGET 

• Sustainability remains key focus area and continuously working towards addressing challenges around issues of climate and energy, environment, circular economy and community. 
•  It has developed carbon and emission reduction targets for 2030, which are validated by the Science Based Targets initiative (SBTi), to limit global warming below 2 degrees Celsius. 

CUSTOMER SEGMENT PROGRESS 

AMBUJA CEMENTS PRODUCTS AND SOLUTIONS 

STRENGTH AND SUSTAINABILITY FOR A GREEN FUTURE 

• Green growth is the only way to build a sustainable future. Guided by the belief and aligned with the group strategy of ‘accelerating green growth’,  
• On one hand, Ambuja Cement share are expanding their capacities to address the growing needs of a fast-growing economy. While on the other, they are focusing on further improving their operational efficiency while continuously lowering carbon footprint.  
• Ambuja Cement share has deployed institutionalized mechanisms to monitor the environmental risks.  
• Deploying clean technology, converting industrial wastes to raw materials, conserving energy and increasing the share of green power in total energy consumption, they have laid out a clear glide path to achieving our ambitious sustainability targets. 
• 2030 carbon emission reduction targets have been validated by the Science Based Targets initiative (SBTi), adding more credence to concerted efforts to build a stronger and sustainable future. 
• Ambuja Cement share has consistently aimed at including sustainability in all operational and project planning. 

AMBUJA CEMENT SHARE SOCIAL COMMITMENT 

Since inception, they have built trust in Brand Ambuja by ensuring consistency in quality and reliability of service.  

Together with ACC Limited, they have begun cleaning plastic waste from India’s river waters.  

In coming days, they will explore various initiatives more through partnerships with like-minded institutions and individuals while continuing to drive CSR efforts towards promoting inclusive development. 

LEADING WITH SUSTAINABILITY AND INNOVATION 

Majority shareholder is Switzerland-based Holcim, a global leader in innovation and sustainable building solutions, operating with 70,000+ people across 70+ countries in the world. The Global Depositary Receipts (GRDs) issued by Ambuja Cement shares are listed on the Luxembourg Stock Exchange. 

INVESTMENT CASE 

SOLID MACRO AND MARKET FUNDAMENTALS  

• Stable government and progressive economic policies to drive strong Gross Domestic Product (GDP) growth of ~7.0% per annum in medium to long term. 
• India is a high growth attractive cement market, with a low annual per capita consumption of ~242 kg against a global average of 525 kg − Rising urbanization is expected to reach 40% by 2030 – additional 113 million people in cities by 2030. 
• Commissioning of Marwar integrated plant helped increase their clinker capacity by 3 MTPA and cement manufacturing by 1.8 MTPA. 
• As per the year 2021, the study in contrast for the Indian economy, the government’s continued policy push for infrastructure and affordable housing led to a strong rebound in demand, based on season rising input cost, partially offset the gains. 

THE VALUE AMBUJA CEMENTS PROVIDES 

• For customers –They give high quality product and timely delivery. 
• For employees-Providing employment opportunities for growth and development. 
• For investors− Sustainable returns to Shareholders and Timely debt servicing. 
• For supplier partners− Boosting local economy through localized procurement Collaboration and partnering opportunities. 
• Government and regulatory agencies –They hold periodic meetings with respective regulatory agencies and communications on proposed legislations. 

HIGHLIGHTS OF 2021 

• Rs 310 crore committed investment to ramp up capacity at the Ropar unit. 
• Rs 1,160 crore spent towards CAPEX. 
• 2.8% reduction in freight and forwarding cost per tonne. 
• Rs 64.41 crore spent on CSR activities. 

DISTRIBUTION OF SHAREHOLDING 

The shareholding distribution of the equity shares as of December 31, 2021 is given below: – 

No. of Equity Shares	No. of Shareholders	No. of Shares	Percentage of Shareholding
Less than 50	2,22,316	38,22,775	0.19
51 to 100	41,377	35,29,539	0.18
101 to 500	38,640	94,15,747	0.47
501 to 1000	8,042	63,25,264	0.32
1001 to 5000	12,180	3,14,12,921	1.58
5001 to 10000	2,252	1,62,38,836	0.82
10001 to 50000	1,479	2,87,76,531	1.45
50001 to 100000	167	1,19,14,628	0.6
100001 to 500000	254	6,17,70,636	3.11
500001 and above	198	1,81,24,38,352	91.28
TOTAL	3,26,905	1,98,56,45,229	100

RISK MANAGEMENT 

PRIMARY RISKS	MITIGATION STRATEGY
Maintaining market position To maintain and then build on the market  position in times of high volatility, uncertainty,  complexity, and ambiguity (VUCA), especially given  the demand contraction caused by COVID-19  pandemic situation.	The positive macro-environment, government support and their own complex plans will help Indians growing cement demand.
Resource availability and price   A rise in input costs increases overall cost of production.	Exploring new contracts to secure competitive supply  sources and infrastructure for absorbing approved  raw materials of different kind.
Regulatory changes Changes in regulations take place in a fast-developing country like India, in areas like environment, tax and competition.	New emission control system has been installed to  comply with the new emission standard for cement  industry.

FINANCIAL HIGHLIGHTS 

FINANCIAL KEY METRICS	VALUE
MARKET CAPITALIZATION	₹ 72,079 Cr
STOCK P/E	28.4
INDUSTRY P/E	19.3
ROE	11.8 %
ROCE	22.1 %
DEBT TO EQUITY RATIO	0.02

The market capitalization of Ambuja Cement share is ₹ 72,079 Cr which is a large cap company and has good competition in its respective sector. 

In Cement sector, Ambuja cement share stands 3rd in this segment. 

Currently the stock P/E is 28.4 which is higher than the industry P/E of 19.3.  

The return on equity is 11.8 % which is quite favorable as it directly indicates that the investors are getting more than bank FD returns on their equity in this stock. 

The return on capital employed is 22.1 % and shows a superb operating income is generated for every rupee of capital invested. 

Ambuja Cement share currently has 0.02 which is negligible and the company is focusing on reducing it further. 

ROBUST FINANCIALS  

•  Superior operating performance has helped strengthen financial performance.  
• Net sales for the year stood at Rs 13,794 crore while operating EBITDA stood at Rs 3,207 crore. 
• Debt-free balance sheet with cash and liquid investments of Rs 3,985 crore.  
• Rs 1,251 crore proposed dividend for the year. 

FUTURE OUTLOOK 

Going ahead, the company will focus to strengthen the share of value-added products in our portfolio. They will further strengthen their market penetration by entering into newer geographies. Company aims to further augment their capacities through brownfield expansions, as well as de-bottlenecking initiatives across their existing units. Sustainability will remain the focus area in whatever they are willing do.