Professional Documents
Culture Documents
Group 4 - Interim Report II
Group 4 - Interim Report II
Group 4 - Interim Report II
Interim Report - II
Strategic Management Project
19
0027/52
Akancha Anima Tirkey
20
0040/52
Amerla Giridhar
21
Group-4
0052/52
Ananth Babu L
22
0058/52
Anisetty Naga Rohith
23
FP/07/15
Himanshi Rajora
24
FP/12/15
Shalini
clearly more market share than them and since the market is sticky its difficult for them
to compete with the top players currently so they don't have any competitive advantage
over other firms in near future. Hence its advised to sell rather than to hold the shares.
Ambiguous Management:
The lack of clear policies on Indian operations post the global merger of Holcim and Lafarge can
be seen as a key risk. Currently, there is news going around saying, French cement maker
Lafarge SA has decided to sell all its assets in India. Meanwhile, the proposed change in
structure of holding of ACC and Ambuja under the Holcim Group, is also pending approval of
the Foreign Investment Promotion Board (FIPB) and, hence, lacks clarity.
Key Financials continue to take a downward turn:
Ambuja did not have an impressive top line performance (9911 cr to 9368 cr) in FY'15. This
resulted in steep decline in bottom line of the firm by 688 cr (1496 cr to 808 cr), impacted by
weak demand and fall in realization.
The EPS(5.2) and P/E ratio (37.2) of the company is poor with respect to the competitor firms,
which suggests that shareholders are not willing to pay more for an unit of earning as compared
to UltraTech or Shree, and the company is undervalued in the market.
Realization was down by around 5%, due to pricing pressure in its key markets of North and
West regions.
Profits were lower due to a weak operating performance coupled with higher depreciation
expenses and lower other income.
The estimated growth rates for both the Cement industry as well as Ambuja Cements remains to
be negative.