COMPANY OVERVIEW

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 JP Morgan
Shubham Loya CB.BU.P2MBA19145
Manoj Kumar S CB.BU.P2MBA19087
Gayathri S CB.BU.P2MBA19055

RAMCO CEMENTS LIMITED

The Ramco Cements Limited is the flagship company of the Ramco Group, a well-known
business group of South India. It is headquartered at Chennai. The main product of the company
is Portland cement, manufactured in eight state-of-the art production facilities that include
Integrated Cement plants and Grinding units with a current total production capacity of 16.45
MTPA. The company is the fifth largest cement producer in the country. It is the most popular
cement brand in South India. The company also produces Ready Mix Concrete and Dry Mortar
products, and operates one of the largest wind farms in the country. 

MAJOR BUSINESS LINES

1. Cements
i. Ramco Supercrete: Ramco Supercrete is a specially formulated blended cement
manufactured as per IS 1489 which has been used to make High Performance Concrete.
This cement is the culmination of R& D efforts, our experience of supplying cement to
critical projects and feedback from Civil Engineers.
ii. Ramco Supergrade: Ramco Cements Super Grade is PPC grade cement manufactured
as per IS 1489 (Part 1):2015. Ramco Cements Super Grade is produced either by
grinding together Portland Cement clinker and pozzolona with addition of gypsum or
calcium sulphate, or by intimately and uniformly blending Portland Cement and fine
Pozzolona.

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 iii. Ramco Cement 43 Grade (OPC 43): Ramco Cement OPC 43 confirms to IS 269:2015.
The grade is based on the 28-day compressive strength of the cement mortar (tested as
per IS 4031), which in this case is not less than 43 MPa.
iv. Ramco Cement 53 grade (OPC 53): Ramco Cement OPC 53 confirms to IS 269:2015.
The grade is based on the 28-day compressive strength of the cement mortar (tested as
per IS 4031), which in this case is not less than 53 MPa.
v. Ramco Sulphate Resisting Cement (SRC): Ramco SRC is manufactured as per IS
12330. This cement is used in marine conditions where soil or water contains excess
sulphates. However SRC is weak in resisting chloride attack.
vi. Sleeper Grade Cement (53 S): This cement finds its application in the manufacture of
precast products and railway sleepers 53 S Cement is manufactured as per IS 12269
where apart from all requirements of 53 Grade, specific requirements in terms of C3A
and C3S need to be adhered to. C3A is limited to 10% and C3S is limited to 45%.
vii. Ramco Super Fast: Ramco Super Fast is a Rapid Hardening Portland Cement
manufactured as per IS 8041:1990. It is special cement that has been customized for
manufacturing hollow blocks, solid blocks, paving blocks, fly ash bricks and other
precast items. To ensure the productivity and quality of precast blocks, a separate line
meant for manufacturing the specialized cement has been installed at our plants.
2. Dry mix Products
In 2003, Dry Mix Plant was set up to engage the best technology to introduce products like
Ready Mix Plasters, Ramco Tile Six, and Ramco Super Fine Putty. Today, the Dry Mix
business has evolved to offer 18 variants of Dry Mortar products all indigenously developed
in our state of the art plant at Sriperumbudur near Chennai.
3. Ramco Concrete
High performance Concrete based on customers’ requirements is made in the RMC unit.
Concrete with various permutations based on concrete grades, workability and site conditions
are available.
4. MACE Support
MACE, an acronym for Masons, Architects, Contractors and Engineers is the customer face
of Ramco cements. MACE not only provides engineering solution for huge projects, is also
provides after-sales support services to Individual Home Builders who use Ramco. This

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 includes on-the-ground guidance on correct construction practices and some of the major
concrete tests free of cost! This means tremendous cost-savings to consumers on expensive
test, with its tireless, customer-friendly approach, MACE has won the support and admiration
of customers and the trade. MACE provides engineering solutions for huge projects, provides
after-sales support services to Individual home builders who use Ramco, on-site guidance,
some of the major tests on concrete , all free of cost.

CAPITAL STRUCTURE

For the purpose of the Company’s capital management, capital includes issued equity share
capital and all other equity reserves attributable to the equity holders of the Company. The
primary objective of the Company's capital management is to maximize the shareholders' wealth.

The Company manages its capital structure and makes adjustments in the light of changes in
economic conditions and the requirements of the financial covenants. The Company monitors
capital using a gearing ratio, which is net debt divided by total equity plus net debt.

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 THE RAMCO CEMENTS'S SHAREHOLDING PATTERN

COMPARISON OF MARKET CAPITALISATION WITH PEERS

Company Name Last Price % Chg 52 wk High 52 wk Low Market Cap (Rs. cr)
UltraTechCement 4,005.15 -0.62 4,753.35 2,913.15 115,599.07
Shree Cements 21,894.15 0.82 25,341.20 15,500.00 78,995.73
Ambuja Cements 219.6 -1.59 226.25 136.65 43,604.77
ACC 1,396.80 -0.74 1,736.75 895.5 26,230.12
Ramco Cements 687.6 0.47 883.3 456.5 16,198.26
Dalmia Bharat 764.35 -3 1,071.00 406 14,342.86
J. K. Cement 1,600.40 3.12 1,613.00 800 12,366.01
Heidelberg Cem 183 -0.3 217.8 120 4,147.02
Star Cement 88.4 -0.11 113 56 3,645.87
India Cements 116.95 2.81 140 67.9 3,624.25

VALUATION RATIOS

PRICE – EARNINGS RATIO

The P/E ratio helps investors determine the market value of a stock as compared to
the company's earnings. In short, the P/E ratio shows what the market is willing to pay today for
a stock based on its past or future earnings. A high P/E could mean that a stock's price is high

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relative to earnings and possibly overvalued. Conversely, a low P/E might indicate that the
current stock price is low relative to earnings. 

P/E Ratio = Market value per share / Earnings per share

P/E RATIO COMPARISION TO PEERS

Shree-
Ultra- Cemen Ambuja JK Birla Ramco
Year Tech t Cement ACC Cement Corporation Cement

2019-20 0.98 0.45 0 0 3.15 3 7.57

2018-19 3.82 1.11 0 0 8.73 9.66 14.58
2017-18 3.09 0.63 0 0 6.03 12.5 10
2016-17 2.97 0.76 0 0 11.54 10.29 10.12
2015-16 2.15 0.59 0 0 23.49 8.92 8.09

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 P/E RATIO
25

20

15

10

0
Ultra-Tech Shree-Cement Ambuja Cement ACC JK Cement Birla Ramco Cement
Corporation

2019-20 2018-19 2017-18 2016-17 2015-16

Conclusion- Compare to other peers group Ramco Cement has a high P/E ratio which means
shares are overvalued or we can say Earning is less compare Market Price. It will attract
Investors because if the Ratio is high mean Investor will get more return.

EV/EBITDA

EV/EBITDA is a ratio that compares a company’s Enterprise Value (EV) to its Earnings Before

Interest, Taxes, Depreciation & Amortization (EBITDA).  The EV/EBITDA ratio is commonly
used as a valuation metric to compare the relative value of different businesses.

The ratio of EV/EBITDA is used to compare the entire value of a business with the amount
of EBITDA it earns on an annual basis.  This ratio tells investors how many times EBITDA they
have to pay, were they to acquire the entire business.

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COMPARISION TO PEERS

Ultra- Shree- Ambuja JK Birla Ramco

Year Tech Cement Cement ACC Cement Corporation Cement
2019-20 11.55 16.17 6.84 8.24 7.31 4.72 12.42
2018-19 17.08 22.12 9.9 11.5 9.69 7.35 17.64
2017-18 18.84 20.84 12.5 14.85 10.12 10.39 15.87
2016-17 19.58 21.04 11.17 16.16 11.16 12.28 13.6
2015-16 17.46 21.12 15.15 15.36 12.51 7.25 9.67

EV/EBITDA
25

20

15

10

0
Ultra-Tech Shree-Cement Ambuja ACC JK Cement Birla Ramco
Cement Corporation Cement

2019-20 2018-19 2017-18 2016-17 2015-16

Conclusion- As we see compare to other peers company Ramco Cement EBITA ratio is
moderate which means there earning is not that much high and Investors will get the share in
medium prices to compare to other companies.

Price-to-Sales Ratio

The price-to-sales (P/S) ratio compares a company’s stock price to its revenues. It is an indicator
of the value placed on each dollar of a company’s sales or revenues.

P/S Ratio=MVS/SPS

where:

MVS=Market Value per Share

SPS=Sales per Share

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To determine the P/S ratio, one must divide the current stock price by the sales per share.. The
sales per share metric is calculated as dividing a company’s sales by the number of outstanding
shares.

COMPARISION TO PEERS

Ultra- Shree- Ambuja JK Birla Ramco

Year Tech Cement Cement ACC Cement Corporation Cement
2019-
20 2.23 4.93 1.44 1.73 1.25 0.46 2.25
2018-
19 2.64 5.17 1.71 1.91 1.27 0.62 3.36
2017-
18 3.5 5.73 2.28 2.49 1.46 0.96 3.91
2016-
17 4.32 6.9 2.04 2.24 1.41 1.31 4.02
2015-
16 3.52 7.85 3.33 2.17 1.07 0.85 2.66

P/S RATIO
9

0
Ultra-Tech Shree-Cement Ambuja ACC JK Cement Birla Ramco Cement
Cement Corporation

2019-20 2018-19 2017-18 2016-17 2015-16

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Conclusion- As we seen Price to sale ratio tells how much market price is with sales per share.
For Ramco, the Cement ratio is between 2-4 which means their market price is twice times of
sales value per share.

LEVERAGE RATIOS

Debt to Equity Ratio

The debt-to-equity (D/E) ratio is calculated by dividing a company’s total liabilities by its
shareholder equity. The ratio is used to evaluate a company's financial leverage. It is a measure
of the degree to which a company is financing its operations through debt versus wholly-owned
funds. More specifically, it reflects the ability of shareholder equity to cover all outstanding
debts in the event of a business downturn.

Debt / Equity = Total Liabilities / Total Shareholder Equity

Comparision to Peers

Ultra- Shree- Ambuja JK Birla Ramco

Year Tech Cement Cement ACC Cement Corporation Cement
2019-20 0.55 0.18 0 0 0.95 0.78 0.53
2018-19 0.86 0.29 0 0 0.99 0.81 0.32
2017-18 0.71 0.38 0 0 1.38 1.13 0.24
2016-17 0.31 0.17 0 0 1.81 1.24 0.3
2015-16 0.34 0.11 0 0 1.97 0.32 0.54

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 Debt to Equity
2.5

1.5

0.5

0
Ultra-Tech Shree-Cement Ambuja ACC JK Cement Birla Ramco Cement
Cement Corporation

2019-20 2018-19 2017-18 2016-17 2015-16

Conclusion- As we see from the upper graph we can compare to peers company Ramco cement
have low Debt to Equity Ratio which mean if suddenly company wind up then Debt payment
will be equal to 50% amount available with the shareholder and J.K cement company ratio is
better then all company because they can meet 90% of Debt

Interest Coverage Ratio

 
The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a
company can pay interest on its outstanding debt. The interest coverage ratio may be calculated
by dividing a company's earnings before interest and taxes (EBIT) during a given period by the
company's interest payments due within the same period.

The Interest coverage ratio is also called “times interest earned.” Lenders, investors, and
creditors often use this formula to determine a company's riskiness relative to its current debt or
for future borrowing.

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Interest Coverage Ratio=EBIT / Interest Expense
where:
EBIT=Earnings before interest and taxes

Comparision to Peers
Ultra Shree- Ambuja JK Birla Ramco
Year -Tech Cement Cement ACC Cement Corporation Cement
24.6
2019-20 3.64 7.64 23.7 3 3.66 2.76 11.98
18.0
2018-19 3.01 6.34 18.93 9 2.58 1.86 14.77
14.1
2017-18 3.95 14.51 14.39 9 2.41 1.46 14.19
13.2
2016-17 7.05 12.83 14.3 5 2.01 1.86 9.17
15.3
2015-16 7.04 16.52 13.69 9 1.31 3.83 4.61

Interest Coverage Ratios 

30

25

20

15

10

0
Ultra-Tech Shree-Cement Ambuja ACC JK Cement Birla Ramco Cement
Cement Corporation

2019-20 2018-19 2017-18 2016-17 2015-16

Conclusion- As from our upper graph Ramco cement is in moderate position but their ratio is
not good for the future because it is increasing year by year and this ratio will tell the company
take too much outsider fund excluding shareholder money.

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PROFITABILITY RATIOS

Profitability ratios are a class of financial metrics that are used to assess a business's ability to
generate earnings relative to its revenue, operating costs, balance sheet assets, or shareholders'
equity over time, using data from a specific point in time. Three common margin ratios — gross
profit margin, operating profit margin, and net profit margin.

1. Gross Profit Margin- Gross profit margin is a measure of profitability that shows the
percentage of revenue that exceeds the cost of goods sold (COGS)
Formula-
Gross Profit Margin= (Gross Profit/ Revenue) ×100

Year Ultra-Tech Shree-Cement Ambuja Cement ACC JK Cement Birla Corporation Ramco Cement
2019-20 15.24 16.59 13.75 11.53 17.7 11.03 13.28
2018-19 11.89 10.75 11.82 9.76 12.36 5.8 13.14
2017-18 13.82 16 13.07 9.55 12.51 5.27 16.31
2016-17 15.49 15.1 9.17 7.27 13.77 6.7 21.03
2015-16 14.04 10.5 9.57 7.5 10.18 4.16 21.01

Gross Profit Margin

2019-20 2018-19 2017-18 2016-17 2015-16

21.01
14.04 10.5 10.18 21.03
15.49 15.1 9.57 13.77
9.17 7.5
13.82 16 12.51 16.31
13.07 7.27
9.55 12.36 4.16
11.89 10.75 11.82 6.7 13.14
9.76 5.27
15.24 16.59 13.75 17.7 5.8
11.53 11.03 13.28

Ultra-Tech Shree-Cement Ambuja ACC JK Cement Birla Ramco Cement

Cement Corporation

Conclusion: As we see compare to other peers company Ramco Cement have high Gross profit
Margin. That will help the company to earn more profits but they have to minimize their other
cost but don’t sacrifice with quality and quantity of the company.

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 2. Operating Profit Margin- Operating margin measures how much profit a company
makes on a dollar of sales, after paying for variable costs of production, such as wages
and raw materials, but before paying interest or tax.

Formula-
Operating Profit Margin= ( Operating Profit / Revenue) ×100

Year Ultra-Tech Shree-Cement Ambuja Cement ACC JK Cement Birla Corporation Ramco Cement
2019-20 21.28 30.86 18.41 15.38 21.62 14.22 20.17
2018-19 17.69 22.63 16.65 13.81 16.26 9.16 17.94
2017-18 19.74 25.14 18.55 14.37 16.56 9.19 22.9
2016-17 20.79 29.24 18.4 12.69 18.46 11.1 29.14
2015-16 19.51 25.51 16.18 13.03 14.57 8.71 26.45

Operating Profit Margin

2015-16 2016-17 2017-18 2018-19 2019-20

25.51

26.45
29.24
19.51
16.18 14.57 29.14
20.79 25.14
18.4 13.03 18.46
19.74 22.9
22.63 18.55 12.69 16.56 8.71
14.37 11.1
17.69 16.65 16.26 17.94
30.86 13.81 9.19
21.28 21.62 9.16 20.17
18.41 15.38 14.22

Ultra-Tech Shree-Cement Ambuja ACC JK Cement Birla Ramco Cement

Cement Corporation

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Conclusion- it has seen Ramco Cement have high gross margin and Operating Margin which
will a positive aspect it means there operating cost are under control so they will generate more
Net profit if company will control other Non operating Cost.

3. Net profit Margin- Net profit margin is the ratio of net profits to revenues for a
company or business segment. 
Formula-
Net Profit Margin= (Net Profit / Revenue) ×100

Year Ultra-Tech Shree-Cement Ambuja Cement ACC JK Cement Birla Corporation Ramco Cement
2019-20 13.42 13.19 13.1 8.67 7.32 6.65 10.18
2018-19 6.03 8.11 13.09 10.17 6.52 3.11 7.83
2017-18 7.49 14.07 11.94 6.89 7.44 3.09 11.61
2016-17 10.99 15.58 10.13 5.39 5.61 6.39 14.43
2015-16 9.99 20.73 8.53 5.01 2.85 4.8 14.52

Net Profit Margin

2015-16 2016-17 2017-18 2018-19 2019-20

20.73

8.53 14.52
15.58
9.99 10.13
14.43
10.99 11.94 5.01
14.07
5.39 2.85 11.61
7.49 13.09 6.89 5.61
4.8
6.03 8.11 7.44 6.39
10.17 7.83
13.42 13.19 13.1 6.52 3.09
8.67 3.11 10.18
7.32 6.65

Ultra-Tech Shree-Cement Ambuja Cement ACC JK Cement Birla Corporation Ramco Cement

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Conclusion- Net Profit Margin is also very good that will show a positive aspect as company
will not take that much loans and other Non operating cost is also control. Investor will also see
this as a opportunity because if Net profit Margin is high they will get more return.

EARNINGS PER SHARE

Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of
its common stock. The resulting number serves as an indicator of a company's profitability.The
higher a company's EPS, the more profitable it is considered.

The earnings per share value are calculated as the net income (also known as profits or earnings)
divided by the available shares.

Earnings per share = net income / End of period common shares outstanding

Comparison to peers

Birla
Ultra- Shree- Ambuja JK Corporatio Ramco
Year Tech Cement Cement ACC Cement n Cement
2019-
20 201.61 435.35 10.55 73.35 62.56 65.6 26
2018-
19 84.02 288.88 10.97 80.97 36.74 33.21 22
2017-
18 80.94 397.32 7.64 49.23 41.41 19.99 25
2016-
17 98.92 384.38 5.57 32.19 25.42 28.5 29
2015-
16 90.3 328.13 5.21 31.3 8.27 21.78 24

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 EPS
500

450

400

350

300

250

200

150

100

50

0
Ultra-Tech Shree-Cement Ambuja ACC JK Cement Birla Ramco Cement
Cement Corporation

2019-20 2018-19 2017-18 2016-17 2015-16

Conclusion- As compare to peer competitors Ramco Cement EPS ratio is very less it means
Investors will not get that much return as compare to other companies. It will also say the
company should try to improve their earning capacity that will attract more investors who will
invest for more return it will help the company for future growth.

COMPOUND ANNUAL GROWTH RATE (REVENUE)

Compound annual growth rate (CAGR) is a business and investing specific term for the
geometric progression ratio that provides a constant rate of return over the time period. It may be
positive and negative. But the negative is not a good sign it means compare to previous company
sales is decreased by how much percentage.

CAGR (Revenue) = ((Sales for 2 year-Sales for 1 year)/Sales for 1 year))*100

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Ramco Cement last 5 year sales data.

Year Sales (in Crores) CAGR

2013-14 3,746.81

2014-15 3,740.27 -0.17455

2015-16 4,214.88 12.68919
2016-17 4,621.25 9.641318
2017-18 4,617.67 -0.07747
2018-19 5,187.30 12.33588
Conclusion- As we can conclude from
upper calculation that CAGR in the year 2014-15 and 2017-18 is negative in compare to other
years. But some year there is a hike of 9 to 12% in sales compare to other years.

DIVIDEND POLICY AND PAYOUT RATIO

There are some Regulation given by Securities Exchange Board of India vide its Notification No.
SEBI/LADNRO/GN/2016-17/008 dated July 08, 2016, inserted Regulation 43A in the SEBI
Regulations, 2015 [LODR] mandating the formulation of a Dividend Distribution Policy for the
top 500 listed entities based on their market capitalization.

The decision on the distribution of dividend will consider the following parameters.

 Financial Parameters (Profits earned during the period / year, Accumulated Reserves)
 Internal Factors (Capital Expenditure Plans, Inorganic Growth Plans , Past Dividend
Trends)
 External Factors(Economic Environment, Investor Expectations , Legal and Regulatory
Framework)

Company Policy: The Company shall strive to distribute at least 10% of its Consolidated Post-
Tax Profits as dividend including interim dividends in each financial year. The distribution shall
include dividends and tax on such dividends as per relevant regulations. Special Dividends, if
any may be declared in addition to the regular dividend payout.

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The Board may not recommend any dividend or may recommend a lower payout for a given
financial year

a. The company has reported a net loss for the year.

b. Cash flow from operations is negative.
c. The credit protection or capital adequacy metrics of the company are weak.
d. The company is undergoing any form of debt restructuring.
e. The company has been prohibited to declare dividends by any regulatory
authority.

 If the company does not declare any dividend or if the final payout for the year is lower
than the target percentage referred in Clause 7.1, the Board will provide a rationale for
the deviation from the policy in the annual report.
 If the Company declares dividend on the basis of parameters not enumerated in this
policy or changes the dividend distribution policy contained in any of the parameters, it
shall disclose such changes along with the rationale for the same in the annual report and
on its website.

Payout Ratio of Ramco Cement for Last 5 years-

Year 2019-20 2018-19 2017-18 2016-17 2015-16

Payout 10.75 10.60 8.34 8.54 8.66

Ratio

Dividend Pattern of Last 5 year-

Year 2019-20 2018-19 2017-18 2016-17 2015-16

Dividend 250 300 300 300 300

ACQUITIONS

Ramco Cements is planned to invest around Rs 1,095 crore in various projects,

including expansion of its satellite grinding unit capacity. The company is expecting
the cement demand to be growing in the near So they increase its capacity through satellite
grinding plants and this would enable the company to increase its presence in Andhra

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Pradesh, Odisha and West Bengal. The plans are to increase the capacity to 7.1 mtpa from 4
mtpa.The expansion will be taken up at Vizag, Kolaghat and with a new grinding unit in Odisha. 
The effects of the goods an services tax, increased spending by the Centre on infrastructure
and affordable housing scheme are expected to propel the growth for the cement demand in the
future

CORPORATE ACTIONS

A corporate action is any activity that brings material change to an organization and impacts its
stakeholders, including shareholders, both common and preferred, as well as bondholders. There
are different types of Corporate Action that are listed below:

1. A cash dividend is a common corporate action that alters a company's stock price. A cash
dividend is subject to approval by a company's board of directors, and it is a distribution
of a company's earnings to a specified class of its shareholders.
2. A stock split is another common corporate action that alters a company's existing shares.
In a stock split, the number of outstanding shares is increased by a specified multiple,
while the share price is decreased by the same factor as the multiple. 
3. A reverse split would be implemented by a company that wants to force up the price of
its shares.
4. Mergers and acquisitions (M&A) are a third type of corporate action that bring about
material changes to companies. In a merger, two or more companies synergize to form a
new company.
5. A spin-off occurs when an existing public company sells a part of its assets or distributes
new shares in order to create a new independent company. Often the new shares will be
offered through a rights issue to existing shareholders before they are offered to new
investors.

There is no recent corporate action done by Ramco Cement, but they done corporate action in

 2013-2014 -Madras Cements Ltd. shall be changed to The Ramco Cements Ltd. And the
trading symbol of the Company be changed from MADRASCEM to RAMCOCEM.
 2007-2008- Company has issued Bonus Shares in the Ratio of 1:1.he Company has splits
its face value from Rs10/- to Rs1 because they want to guarantee furnished by the
Company to UTI Bank Ltd., for its Subsidiary, Ramco InfoTech Solutions Ltd. to support
their credit facilities.
 2003-2004 -Madras Cements members approve stock split of the existing equity shares of
Rs 100/- to 10 shares of Rs 10/- each.
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