CHAPTER- I

INTRODUCTION

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INTRODUCTION
Every firm is most concerned with its profitability. One of the most frequently used tools of
financial ratio analysis is profitability ratios which are used to determine the company's
bottom line and its return to its investors. Profitability measures are important to company
managers and owners alike. If a small business has outside investors who have put their own
money into the company, the primary owner certainly has to show profitability to those equity
investors.

Profitability ratios show a company's overall efficiency and performance. We can divide
profitability ratios into two types: margins and returns. Ratios that show margins represent the
firm's ability to translate sales dollars into profits at various stages of measurement. Ratios
that show returns represent the firm's ability to measure the overall efficiency of the firm in
generating returns for its shareholders.

Profitability ratios measure a company’s ability to generate earnings relative to sales, assets
and equity. These ratios assess the ability of a company to generate earnings, profits and cash
flows relative to relative to some metric, often the amount of money invested. They highlight
how effectively the profitability of a company is being managed.

Common examples of profitability ratios include return on sales, return on investment, return
on equity, return on capital employed (ROCE), cash return on capital invested (CROCI), gross
profit margin and net profit margin. All of these ratios indicate how well a company is
performing at generating profits or revenues relative to a certain metric.

Different profitability ratios provide different useful insights into the financial health and
performance of a company. For example, gross profit and net profit ratios tell how well the
company is managing its expenses. Return on capital employed (ROCE) tells how well the
company is using capital employed to generate returns. Return on investment tells whether the
company is generating enough profits for its shareholders.

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For most of these ratios, a higher value is desirable. A higher value means that the company is
doing well and it is good at generating profits, revenues and cash flows. Profitability ratios are
of little value in isolation. They give meaningful information only when they are analyzed in
comparison to competitors or compared to the ratios in previous periods. Therefore, trend
analysis and industry analysis is required to draw meaningful conclusions about the
profitability of a company.

Some background knowledge of the nature of business of a company is necessary when

analyzing profitability ratios. For example sales of some businesses are seasonal and they
experience seasonality in their operations. The retail industry is example of such businesses.
The revenues of retail industry are usually very high in the fourth quarter due to Christmas.
Therefore, it will not be useful to compare the profitability ratios of this quarter with the
profitability ratios of earlier quarters. For meaningful conclusions, the profitability ratios of
this quarter should be compared to the profitability ratios of similar quarters in the previous
years.

Financial statements are prepared primarily for decision-making. They play a prominent role
in setting the framework of managerial decisions. But the information provided in the
financial statements is not an end in itself as no meaningful conclusions can be drawn from
these statements alone. However, the information provided in financial statements is of
immense use in making decisions through analysis and interpretation of financial statements.

Ratio analysis is used to evaluate relationships among financial statement items. The ratios
are used to identify trends over time for one company or to compare two or more companies at
one point in time. Financial statement ratio analysis focuses on three key aspects of a
business: liquidity, profitability, and solvency.

Use and Significance of Profitability Analysis

The Profitability is one of the most powerful tools of financial analysis. It is used as a device
to analyze and interpret the financial health of enterprise. Thus ratios have wide applications
and are of immense use today.

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MANAGERIAL USES OF RATIO ANALYSIS

Helps in decision making

Financial statements are prepared primarily for decision-making. Profitability
analysis helps in making decision from the, information provided in these Financial
Statements.

a. Helps in financial forecasting and planning

Profitability analysis is of much help in financial forecasting and planning. Planning
is looking ahead and the ratios calculated for a number of years a work as a guide for the
future. Thus, ratio analysis helps in forecasting and planning.

b. Helps in communicating
The financial strength and weakness of a firm are communicated in a more easy and
understandable manner by the use of a ratio. Thus, ratios help in communication and enhance
the value of the financial statements.

c. Helps in co-ordination
Profitability even help in co-ordination, which is of at most importance in effective
business management. Better communication of efficiency and weakness of an enterprise
result in better co-ordination in the enterprise.

d. Helps in control
Ratio analysis even helps in making effective control of business. The weakness is
otherwise, if any, come to the knowledge of the managerial, which helps, in effective control
of the business

e. Utility to shareholders/investors
An investor in the company will like to assess the financial position of the concern
where he is going to invest. His first interest will be the security of his investment and then a

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return in form of dividend or interest. Ratio analysis will be useful to the investor in making
up his mind whether present financial position of the concern warrants further investment or
not.

f. Utility of creditors
The creditors or suppliers extent short-term credit to the concern. They are invested to
know whether financial position of the concern warrants their payments at a specified time or
not.

g. Utility to employees
The employees are also interested in the financial position of the concern especially
profitability. Their wage increases and amount of fringe benefits are related to the volume of
profits earned by the concern.

h. Utility to government
Government is interested to know overall strength of the industry. Various financial
statement published by industrial units are used to calculate ratios for determining short term,
long-term and overall financial position of the concerns.

i. Tax audit requirements

Sec44AB was inserted in the income tax act by financial act, 1984. Clause 32 of the
income tax act requires that the following accounting ratios should be given:
a. Gross profit/turnover.
b. Net profit/turnover.
c. Material consumed/finished goods produced.

NEED OF THE STUDY

The problems, which are common to most of the public sectors under taking, are
materials scarcity. Capacity utilization and mainly Profitability requirements and Ultratech

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cements Limited is no exception. Thus the importance of the study reveals as to how
efficiently the working capital has been used so far in the organization.

Profitability Analysis is one of the key areas of financial decision-making. It is

significant because, the management must see that an excessive investment in current assets
should protect the company from the problems of stock-out. Current assets will also
determine the liquidity position of the firm.

The goal of Profitability Analysis is to manage the firm current assets and current
liabilities in such a way that a satisfactory level of working capital is maintained. If the firm
cannot maintain a satisfactory level of capital, it is likely to become insolvent and may be
even forced into bankruptcy.

SCOPE OF THE STUDY

The scope of the study is limited to collecting financial data published in the annual
reports of the company every year. The analysis is done to suggest the possible solutions.
The study is carried out for 5 years (2013-18).

A study of the Profitability Analysis involves an examination of long term as well as

short term sources that a company taps in order to meet its requirements of finance. The scope
of the study is confined to the sources that Ultratech cements Limited tapped over the years
under study i.e. 2014-18.

OBJECTIVES OF THE STUDY

 To examine the Profitability Analysis of the Ultratech cements
 To analyses interpret and to suggest the Profitability efficiency of the Ultratech
cements Limited by comparing the balance sheet & profit & loss A/c.
 To critically analyses the financial performance of the Ultratech cements limited. With
the help of ratios.
 To assess the capital employed by the Ultratech cements Limited.

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  To examine feasibility of present system of managing capital.
 To understand how the company finances its Profitability.
 To analyze the financial performance of the company with reference to Profitability.

RESEARCH METHODOLOGY
DATA SOURCES
The study is based on secondary data. However the primary data is also collected to
fill the gap in the information.
 Primary data will be through regular interaction with the officials of Ultratech
cements Limited.
 Secondary data collected from annual reports and also existing manuals and like
company records balance sheet and necessary records.

LIMITATIONS OF THE STUDY

 The study is based on only secondary data.
 The period of study was 2014-18 financial years only.
 Another limitation is that of standard ratio with which the actual ratios may be
compared generally there is no such ratio, which may be treated as standard for the
purpose of comparison because conditions of one concern differ significantly from
those of another concern.
 The accuracy and correctness of ratios are totally dependent upon the reliability of the
data contained in financial statements on the basis of which ratios are calculated.

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 CHAPTER –II
REVIEW OF LITRETURE

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 REVIEW OF LITERATURE

Dr. Monica Tulsian-2014-The main purpose of a business unit is to make profit. The
profitability analysis is done to throw light on the current operating performance and
efficiency of business firms. It should be duly noted that net income figure alone is not very
helpful in determining the efficiency and performance of the business firm unless it is related
to some other figures such as sales, cost of goods sold, operating expenses, capital invested
etc. Thus the profitability ratios are calculated to enlighten the end result and comparison of
business firms which is the sole criterion of overall efficiency of business concern.

Omar A. A. Jawabreh, Emran Al Momani-2017- The study aimed at indicating the most
important factors that control the takings and expenses of the hotel and classifying them
according to their ability to influence the profitability of the hotel by using the appropriate
analytical financial methods for the hotel activity which contribute in increasing the efficiency
of planning and monitoring the hotel activity. The study indicated that the average spending
power of the single guest and the numbers of guests are the basic factors that form the hotel’s
revenues, where the spending power of the single guest was the most powerful factor to
influence the profitability of the hotel activity. Accommodation represents the most important
factor in forming the spending power for the single guest and consequently influences
profitability. The study also showed that the changing and fixed costs elements directly affect
profitability and control the activity of the hotel sector and they, therefore, need planning,
monitoring and following up by those in charge.

Brierley, J.A. (2016) Although profitability analysis has been identified as a useful technique,
it is an under researched area. This paper extends the limited research into profitability
analysis by using research interviews to examine the circumstances when profitability analysis

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is or is not prepared, why various types of profitability analysis are prepared and the how it is
used in decision making. Some notable results indicate that operating units prepare
profitability analysis when there is an interest in preparing it and the resources exist to prepare
it. Operating units prepare both product profitability analysis (PPA) and customer profitability
analysis (CPA) to assist with increasing profits through managing low profit or loss making
customers. The aim is to identify those products that contribute to the low profit or loss of a
customer. In those operating units preparing only PPA, its function is to identify low profit or
unprofitable products. This information is used to assist in determining what action should be
taken to increase the profits of those products. In contrast, customer focused operating units
produce only CPA.

B Kayathiri Bai, V Buvaneshwaran-2015- The hotel industry is a mature industry marked

by intense competition. Market share increases typically comes at a competitor’s expense.
Industry-wide, most growth occurs in the international, rather than the domestic area. Hotels
are a major employment generator in Hospitality industry. Work in the area of Hotel
Management involves ensuring that all operations, including accommodation, food and drink
and other hotel services run smoothly. It includes instructions in hospitality administration,
hotel/motel management, restaurant and food services management, facilities planning, leisure
studies, recreation administration, marketing, recreation equipment and grounds operations
and maintenance, business finance, insurance and taxation, event management and guest
services, personnel management, travel and logistics management, safety and health services,
professional standards and ethics, and applications to specific vacation types and locations.

T. VENKATESAN, DR. S. K. NAGARAJAN-2012- India is among the top producers of all

forms of steel in the world. Easy availability of low cost manpower and preference of
abundant referrers make India competitive in the global set up. Finance is needed for day to
day operation. I can be considered as a life blood for business. Profitability is the profit
earning capacity which is a crucial factor contributing for the survival of the firms. The
profitability level should maintain at increasing level in order to overcome this problem. The
data is purely based on secondary Profitability position is major determined by the direct and
indirect expenses and two away ANOVAs of ROI of selected steel company was, there is a
significant different on the selected steel company viz, they are maintaining different level of

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returns on their investment and correlation of sail to tata of Net Profit and bhushan to jsw of
OP was positive it tells, they are maintaining similar level in the Net Profit a of sail to tata and
jsw to bhushan of OP. finally tata, sail has got better first better performer in the area of
earning power. Bhushan and jsw have got second better performer in the area of overall
earning power. Visa‟s financial position has a negative result of the study period. It is the
drawback to get lost position in their analysis.

N.Sivathaasan-2013- This paper aims to investigate whether factors such as capital structure,
working capital, firm size, non-debt tax shield and growth rate, determining profitability have
any impact on profitability of selected manufacturing companies listed on Colombo stock
exchange, Sri Lanka over a period of five years from 2008 to 2012. This study employs
multiple regression analysis to measure relationship among variables, individual and overall
impact on profitability and to test the operational hypotheses. The results revealed that
whereas all independent variables explain 76.6% and 84.7% of the variance on ROA and ROE
respectively where significant is at 5% levels, the overall model has a significant impact on
profitability at the rate of 80.5 % (Adjusted R2 = 80.5%, P< 0.05), the remaining working
capital (+), growth rate (-) and firm size (+) have no significant effect on the profitability (P >
0.05).

Dan Wang, Fengxia Zhou-2016- With the application of financial analysis in business
management with the development of economy, enterprises are facing increasingly complex
environment. Enterprise modern management is the trend. Financial management is an
important part of strengthening the capacity of corporate financial analysis. It has an
irreplaceable role to improve their core competitiveness, but this aspect currently in China is
still not taken seriously enough. In business management, through the analysis of accurate and
comprehensive financial indicators can be more systematic and comprehensive understanding
of the enterprise, it can provide a favorable support to make correct and reasonable judgments
and decisions, so as to formulate a more comprehensive fit enterprise systems and strategies, a
more reasonable and effective, targeted measure for enterprises’ sustainable development is
important. Its implementation enables businesses to sustainable development.

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Georgeta Vintilă and Elena Alexandra Nenu-2016- In the context of the financial crisis
from the last years, liquidity has become an issue of great interest. Recent studies have been
generally focused on the relationship between market’s liquidity and the real economy, and
also on the effects that the banking system could generate, as the basis of the entire financial
system. This study started from the assumption that liquidity and profitability are issues of
significant impact on companies’ stability and development. The analysis was conducted on
companies listed on the Bucharest Stock Exchange. In order to observe the changes recorded
before the crisis and the subsequent evolution, data were collected for a period of 10 years,
from 2005 to 2014. In this paper, we did not focus on testing a certain model, but analyzed the
correlations between the studied variables. In the first part of the study, a graphical analysis
was contucted regarding the trend of current liquidity and leverage ratios. Also, the effective
tax rate was analyzed in order to monitor the impact of tax pressure and changes recorded
during the financial crisis. The empirical study was conducted by econometric analysis, using
multivariate regression models for unbalanced panel data. Financial performance was
approached through accounting measures using return on assets and return on equity. Factors
that could influence firm’s performance were focused on liquidity and solvency indicators.
The results confirmed the statistically significant relationship between the analyzed variables
and revealed a negative correlation between liquidity and corporate financial performance.

HABIMANA THEOGENE-2017- Financial ratio analysis is important to the management,

owners, customers, suppliers, competitors, regulatory agencies, tax payers and lenders each
having their views in applying financial statement analysis in their evaluations and making
judgments about the financial health of organization, while some authors found that financial
ratios analysis is not an adequate method by which to evaluate the overall performance of an
organization; also the balanced scorecard is more efficient than financial ratios analysis. The
general objective of this study was to analyze the contribution of financial ratio analysis on
decision making in commercial banks in Rwanda. Specific objectives were to analyze the
contribution of liquidity ratio analysis in effective decision making in BK; to determine the
effect of efficiency ratio analysis on the effective decision making in BK; to measure the
extent to which asset quality ratio analysis affects decision making in BK and to assess the
role of profitability ratio analysis on the effective decision making in BK. The findings should
enable management of banking institutions come out with realistic policies for ratio analysis
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aimed at improving the quality of their decision. This research was descriptive and
correlational design and used both qualitative and quantitative methods. The population under
study was comprised of 139 employees of BK and then, the sample size of the study was 104
employees. This study employed the stratified random sampling technique. This research used
regression analysis to establish relationship between variables under study. The Statistical
Package for Social Sciences (SPSS) version 16 was used in this study. The data was presented
in forms of frequency and percentages. The study revealed that if efficiency ratio increased by
one per cent, the effective decision making also increased by 0.910. Hence, there is a positive
effect of efficiency ratio analysis on effective decision making and if asset quality ratios
analysis increased by one per cent, the effective decision making also increased by 16.935.
Hence, there is a positive effect of asset quality ratios analysis on effective decision making.
The study concluded that ratios analysis is a good way to evaluate the financial results of bank
in order to measure its performance. Ratios allow the bank to compare its business against
different standards using the figures on its financial statements. This research recommends
National Bank of Rwanda to speed up the sensitization campaign of the Rwandan commercial
Banks to focus on ratios analysis as among the best tool to the effective decision making in
commercial bank.

Rafiq Ahmad-2016-The purpose of this research paper is to know the relationship between
two ratios of the financial statements i.e. profitability and liquidity. The study is focused on
the banking sector. The relation is measured by current ratio, quick ratio, and net-working
capital. The bank under study is standard chartered bank Pakistan. From the findings of this
study we came to conclusion that there is weak positive relation between liquidity and
profitability. Quantitative research design is used as tool for the study. To find the relation and
strength of the relation correlation and regression are used. So companies need to focus on
liquidity management which has a positive relation with the company’s profitability.

Renáta Myšková-2017-Indicators of financial performance, especially financial ratio

analysis, have become important financial decision-support information used by firm
management and other stakeholders to assess financial stability and growth potential.
However, additional information may be hidden in management communication. The article
deals with the analysis of the annual reports of U.S. firms from both points of view, a financial

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one based on a set of financial ratios, and a linguistic one based on the analysis of other
information presented by firms in their annual reports. Spearman correlation coefficient is
used to compare the values of financial and linguistic indicators. For the purpose of the
comprehensive assessment, novel word lists are proposed, specifically designed for each
category of financial analysis. The aim is to assess the information ability of annual reports
and whether successful firms present their results precisely or not. The results show that the
proposed topic dictionaries can be beneficial, especially for the assessment of cash flow and
leverage ratios.

Ľubica Lesáková-2007-The evaluation of profitability performance appears an important

lesson for our managers. Numerical measures of performance are valuable tools, but their use
must be kept in perspective. It is short-sighed to manage strictly by the numbers. Executives
need to take broader, more qualitative view of the evaluation process. Firms are too
complicated to allow the substitution of mechanical rules for creative thought. In my paper
will be presented the quantitative and qualitative approach to the profitability ratio analysis, as
well as the uses and limitations of profitability ratios in managerial practice.

Luis Javier Sánchez Barrios-2014-This paper proposes a novel approach which

complements the traditional creditworthiness assessment and aims at increasing profitability
and therefore, sustainability of credit programmes in emerging economies. Lenders rely on
previous credit history in credit granting decisions. In emerging economies with weak credit
bureaus a lot of credit applicants lack credit records, and therefore, are viewed as high risks
and excluded from formal credit. A program from a major lender in Colombia which provides
credit to such individuals is used as an example. A mixed methods approach is used to collect
and analyze data to explore profit and return at customer and portfolio levels. The qualitative
data gathered through interviews sets the context for the subsequent quantitative exploratory
analysis. The latter investigates the potential use of several alternative customer-level
profit/return measures in the credit acceptance decision-making process and compares the
resulting implications of adopting a particular measure on the portfolio performance. The
results demonstrate ways of increasing profitability of credit-granting to financially excluded
segments provided there is an on-going relationship between borrower and lender and a strong
collection process is in place. From regulatory point of view it is an important confirmation

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that lending to those financially excluded can be a profitable business and a win-win situation
for both lenders and borrowers.

Asma Khan and Jyoti Singhal-2015-This paper focuses on the performance of selected IT
industries in terms of ratios. The study covers a period of five years and applies various
profitability ratios and found that the performance of HCL Technologies was satisfactory
except in Return on net worth and return on long term funds whereas in case of Tech
Mahindra return on net worth and return on long term funds is satisfactory. Wipro showed an
average performance during the study period. Authors have used ANOVA to find out the
significant difference between the companies and between the years. This paper also enhances
the knowledge of the investor about the growth of the IT companies.

CHAPTER - III
INDUSTRY & COMPANY PROFILE

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 INDUSTRY PROFILE

In the most general sense of the word, cement is a binder, a substance which sets and
hardens independently, and can bind other materials together. The word "cement" traces to
the Romans, who used the term "opus caementicium" to describe masonry which resembled
concrete and was made from crushed rock with burnt lime as binder. The volcanic ash and
pulverized brick additives which were added to the burnt lime to obtain a hydraulic binder
were later referred to as cementum, cimentum, cäment and cement. Cements used in
construction are characterized as hydraulic or non-hydraulic. The most important use of
cement is the production of mortar and concrete—the bonding of natural or artificial
aggregates to form a strong building material which is durable in the face of normal
environmental effects.

Concrete should not be confused with cement because the term cement refers only to
the dry powder substance used to bind the aggregate materials of concrete. Upon the addition
of water and/or additives the cement mixture is referred to as concrete, especially if
aggregates have been added. It is uncertain where it was first discovered that a combination
of hydrated non-hydraulic lime and a pozzolan produces a hydraulic mixture (see also:
Pozzolanic reaction), but concrete made from such mixtures was first used on a large scale by
Roman engineers.They used both natural pozzolans (trass or pumice) and artificial pozzolans
(ground brick or pottery) in these concretes. Many excellent examples of structures made
from these concretes are still standing, notably the huge monolithic dome of the Pantheon in
Rome and the massive Baths of Caracalla. The vast system of Roman aqueducts also made
extensive use of hydraulic cement. The use of structural concrete disappeared in medieval
Europe, although weak pozzolanic concretes continued to be used as a core fill in stone walls
and columns.

Modern Cement

Modern hydraulic cements began to be developed from the start of the Industrial Revolution
(around 1800), driven by three main needs:

Hydraulic renders for finishing brick buildings in wet climates

Hydraulic mortars for masonry construction of harbor works etc, in contact with sea

water. Development of strong concretes.

In Britain particularly, good quality building stone became ever more expensive during a
period of rapid growth, and it became a common practice to construct prestige buildings from
the new industrial bricks, and to finish them with a stucco to imitate stone. Hydraulic limes
were favored for this, but the need for a fast set time encouraged the development of new
cements. Most famous was Parker's "Roman cement." This was developed by James Parker
in the 1780s, and finally patented in 1796. It was, in fact, nothing like any material used by
the Romans, but was a "Natural cement" made by burning septaria - nodules that are found in
certain clay deposits, and that contain both clay minerals and calcium carbonate. The burnt
nodules were ground to a fine powder. This product, made into a mortar with sand, set in 5–
15 minutes. The success of "Roman Cement" led other manufacturers to develop rival
products by burning artificial mixtures of clay and chalk.

John Smeaton made an important contribution to the development of cements when he was
planning the construction of the third Eddystone Lighthouse (1755-9) in the English Channel.
He needed a hydraulic mortar that would set and develop some strength in the twelve hour
period between successive high tides. He performed an exhaustive market research on the
available hydraulic limes, visiting their production sites, and noted that the "hydraulicity" of
the lime was directly related to the clay content of the limestone from which it was made.
Smeaton was a civil engineer by profession, and took the idea no further. Apparently unaware
of Smeaton's work, the same principle was identified by Louis Vicat in the first decade of the
nineteenth century. Vicat went on to devise a method of combining chalk and clay into an
intimate mixture, and, burning this, produced an "artificial cement" in 1817. James
Frost,orking in Britain, produced what he called "British cement" in a similar manner around
the same time, but did not obtain a patent until 1822. In 1824, Joseph Aspdin patented a
similar material, which he called Portland cement, because the render made from it was in
color similar to the prestigious Portland stone.

All the above products could not compete with lime/pozzolan concretes because of
fast-setting (giving insufficient time for placement) and low early strengths (requiring a delay
of many weeks before formwork could be removed). Hydraulic limes, "natural" cements and
"artificial" cements all rely upon their belite content for strength development. Belite
develops strength slowly. Because they were burned at temperatures below 1250 °C, they
contained no alite, which is responsible for early strength in modern cements. The first
cement to William Aspdin's innovation was counter-intuitive for manufacturers of "artificial
cements", because they required more lime in the mix (a problem for his father), because they
required a much higher kiln temperature (and therefore more fuel) and because the resulting
clinker was very hard and rapidly wore down the millstones which were the only available
grinding technology of the time. Manufacturing costs were therefore considerably higher, but
the product set reasonably slowly and developed strength quickly, thus opening up a market
for use in concrete. The use of concrete in construction grew rapidly from 1850 onwards, and
was soon the dominant use for cements. Thus Portland cement began its predominant role. it
is made from water and sand

Types of modern cement

Portland cement

Cement is made by heating limestone (calcium carbonate), with small quantities of other
materials (such as clay) to 1450°C in a kiln, in a process known as calcination, whereby a
molecule of carbon dioxide is liberated from the calcium carbonate to form calcium oxide, or
lime, which is then blended with the other materials that have been included in the mix . The
resulting hard substance, called 'clinker', is then ground with a small amount of gypsum into a
powder to make 'Ordinary Portland Cement', the most commonly used type of cement (often
referred to as OPC).

Portland blastfurnace cement contains up to 70% ground granulated blast furnace slag,
with the rest Portland clinker and a little gypsum. All compositions produce high ultimate
strength, but as slag content is increased, early strength is reduced, while sulfate resistance
increases and heat evolution diminishes. Used as an economic alternative to Portland sulfate-
resisting and low-heat cements.

Portland flyash cement contains up to 30% fly ash. The fly ash is pozzolanic, so that
ultimate strength is maintained. Because fly ash addition allows a lower concrete water
content, early strength can also be maintained. Where good quality cheap fly ash is available,
this can be an economic alternative to ordinary Portland cement.
Portland pozzolan cement includes fly ash cement, since fly ash is a pozzolan, but also
includes cements made from other natural or artificial pozzolans. In countries where volcanic
ashes are available (e.g. Italy, Chile, Mexico, the Philippines) these cements are often the
most common form in use.

Portland silica fume cement. Addition of silica fume can yield exceptionally high strengths,
and cements containing 5-20% silica fume are occasionally produced. However, silica fume
is more usually added to Portland cement at the concrete mixer.

Masonry cements are used for preparing bricklaying mortars and stuccos, and must not be
used in concrete. They are usually complex proprietary formulations containing Portland
clinker and a number of other ingredients that may include limestone, hydrated lime, air
entrainers, retarders, waterproofers and coloring agents. They are formulated to yield
workable mortars that allow rapid and consistent masonry work. Subtle variations of
Masonry cement in the US are Plastic Cements and Stucco Cements. These are designed to
produce controlled bond with masonry blocks.

Expansive cements contain, in addition to Portland clinker, expansive clinkers (usually

sulfoaluminate clinkers), and are designed to offset the effects of drying shrinkage that is
normally encountered with hydraulic cements. This allows large floor slabs (up to 60 m
square) to be prepared without contraction joints.

White blended cements may be made using white clinker and white supplementary
materials such as high-purity metakaolin.

Colored cements are used for decorative purposes. In some standards, the addition of
pigments to produce "colored Portland cement" is allowed. In other standards (e.g. ASTM),
pigments are not allowed constituents of Portland cement, and colored cements are sold as
"blended hydraulic cements".

Very finely ground cements are made from mixtures of cement with sand or with slag or
other pozzolan type minerals which are extremely finely ground together. Such cements can
have the same physical characteristics as normal cement but with 50% less cement
particularly due to their increased surface area for the chemical reaction. Even with intensive
grinding they can use up to 50% less energy to fabricate than ordinary Portland cements.

Non-Portland hydraulic cements

Pozzolan-lime cements. Mixtures of ground pozzolan and lime are the cements used by the
Romans, and are to be found in Roman structures still standing (e.g. the Pantheon in Rome).
They develop strength slowly, but their ultimate strength can be very high. The hydration
products that produce strength are essentially the same as those produced by Portland cement.

Slag-lime cements. Ground granulated blast furnace slag is not hydraulic on its own, but is
"activated" by addition of alkalis, most economically using lime. They are similar to
pozzolan lime cements in their properties. Only granulated slag (i.e. water-quenched, glassy
slag) is effective as a cement component.

Supersulfated cements. These contain about 80% ground granulated blast furnace slag, 15%
gypsum or anhydrite and a little Portland clinker or lime as an activator. They produce
strength by formation of ettringite, with strength growth similar to a slow Portland cement.
They exhibit good resistance to aggressive agents, including sulfate.

Calcium aluminate cements are hydraulic cements made primarily from limestone and
bauxite. The active ingredients are monocalcium aluminate CaAl 2O4 (CaO · Al2O3 or CA in
Cement chemist notation, CCN) and mayenite Ca12Al14O33 (12 CaO · 7 Al2O3 , or C12A7 in
CCN). Strength forms by hydration to calcium aluminate hydrates. They are well-adapted for
use in refractory (high-temperature resistant) concretes, e.g. for furnace linings.

Calcium sulfoaluminate cements are made from clinkers that include ye'elimite
(Ca4(AlO2)6SO4 or C4A3 in Cement chemist's notation) as a primary phase. They are used
in expansive cements, in ultra-high early strength cements, and in "low-energy" cements.
Hydration produces ettringite, and specialized physical properties (such as expansion or rapid
reaction) are obtained by adjustment of the availability of calcium and sulfate ions. Their use
as a low-energy alternative to Portland cement has been pioneered in China, where several
million tonnes per year are produced. Energy requirements are lower because of the lower
kiln temperatures required for reaction, and the lower amount of limestone (which must be
endothermically decarbonated) in the mix. In addition, the lower limestone content and lower
fuel consumption leads to a CO 2 emission around half that associated with Portland clinker.
However, SO2 emissions are usually significantly higher.

"Natural" Cements correspond to certain cements of the pre-Portland era, produced by

burning argillaceous limestones at moderate temperatures. The level of clay components in
the limestone (around 30-35%) is such that large amounts of belite (the low-early strength,
high-late strength mineral in Portland cement) are formed without the formation of excessive
amounts of free lime. As with any natural material, such cements have highly variable
properties.

Geopolymer cements are made from mixtures of water-soluble alkali metal silicates and
aluminosilicate mineral powders such as fly ash and metakaolin.

CEMENT INDUSTRY IN INDIA

India is the world's second largest producer of cement according to the Cement
Manufacturers’ Association.

During September 2010, the cement production touched 12.54 million tonnes (MT), while the
cement despatches quantity was 12.56 MT during the month. The total cement production
during April-September 2010-11 reached 81.54 MT as compared to 77.22 MT over the
corresponding period last fiscal. Further, cement despatches also witnessed an upsurge from
76.50 MT during April-September 2009-10 to 81.10 MT during April-September 2010-11.

Moreover, the government's continued thrust on infrastructure will help the key building
material to maintain an annual growth of 9-10 per cent in 2010, according to India's largest
cement company, ACC.

In January 2010, rating agency Fitch predicted that the country will add about 50 million
tonne cement capacity in 2010, taking the total to around 300 million tonne.

Further, speaking at the Green Cementech 2010, a seminar jointly organised by the
Confederation of Indian Industry (CII) and the Cement Manufacturer's Association in
Hyderabad in May 2010, G Jayaraman, Executive President, Birla Corporation Ltd, said that
in 2009, 40 MT of capacity was added and he expects a similar trend to follow this year.
 New Investments

Cement and gypsum products have received cumulative foreign direct investment (FDI) of
US$ 1,971.79 million between April 2000 and September 2010, according to the Department
of Industrial Policy and Promotion (DIPP).

 Dalmia Bharat Enterprises plans to invest US$ 554.32 million to set up two greenfield
cement plants in Karnataka and Meghalaya.
 Bharathi Cement plans to double its production capacity by the end of the current
financial year by expanding its plant in Andhra Pradesh, with an investment of US$
149.97 million.
 Madras Cements Ltd is planning to invest US$ 178.4 million to increase the
manufacturing capacity of its Ariyalur plant in Tamil Nadu to 4.5 MT from 2 MT by
April 2011.
 My Home Industries Limited (MHI), a 50:50 joint venture (JV) between the
Hyderabad-based My Home Group and Ireland's building material major CRH Plc,
plans to scale up its cement production capacity from the existing 5 million tonne per
annum (mtpa) to 15 mtpa by 2016. The company would undertake this capacity
expansion at a cost of US$ 1 billion.
 Shree Cement, plans to invest US$ 97.13 million this year to set up a 1.5 million MT
clinker and grinding unit in Rajasthan. Moreover, in June 2010, Shree Cement signed
a memorandum of understanding (MoU) with the Karnataka government to invest
US$ 423.6 million for setting up a cement unit and a power plant. US$ 317.7 million
will be used to set up a cement manufacturing unit with an annual capacity of 3 mtpa
while the balance will be for the 100 mega watt power plant.
 Jaiprakash Associates plans to invest US$ 640 million to increase its cement capacity.
 Swiss cement company Holcim plans to invest US$ 1 billion in setting up 2-3
greenfield manufacturing plants in the country in the next five years to serve the rising
domestic demand. Holcim is present in the country through ACC and Ambuja
Cements and holds around 46 per cent stake in each company. While ACC operates
16 cement plants, Ambuja Cements controls five plants in India. The Aditya Birla
group is the largest cement-making group by capacity in the country and controls
Grasim Industries and Ultratech Cement.
GOVERNMENT INITIATIVES

The cement industry is pushing for increased use of cement in highway and road
construction. The Ministry of Road Transport and Highways has planned to invest US$ 354
billion in road infrastructure by 2012. Housing, infrastructure projects and the nascent trend
of concrete roads would continue to accelerate the consumption of cement.

Increased infrastructure spending has been a key focus area. In the Union Budget 2010-11,
US$ 37.4 billion has been provided for infrastructure development.

The government has also increased budgetary allocation for roads by 13 per cent to US$ 4.3
billion.

Gujarat plans to treble its cement production capacity in 3-5 years. Proposals have been
invited from cement companies such as ACC, ABG, Ambuja Cement, Emami, Indiabulls,
Adani group, Ultratech and L&T and the state hopes to raise its capacity from 20 million
tonnes per annum to 70 million tonne. The state will host the biennial Vibrant Gujarat Global
Summit in January 2011 and expects to witness investment proposals worth US$ 13.2 billion
in the cement sector.

Exchange rate used: 1 USD = 45.42 INR (as of December 2010)

The cement industry is one of the vital industries for economic development in a country.
The total utilization of cement in a year is used as an indicator of economic
growth.

Cement is a necessary constituent of infrastructure development and a key raw material for
the construction industry, especially in the government’s infrastructure development plans in
the context of the nation’s socioeconomic development.

Prior To Independence
The first endeavor to manufacture cement dates back to 1889 when a Calcutta based company
endeavored to manufacture cement from Argillaceous (kankar).
But the first endeavor to manufacture cement in an organized way commenced in Madras.
South India Industries Limited began manufacture of Portland cement in 1904.But the effort
did not succeed and the company had to halt production.

Finally it was in 1914 that the first licensed cement manufacturing unit was set up by India
Cement Company Ltd at Porbandar, Gujarat with an available capacity of 10,000 tons and
production of 1000 installed. The First World War gave the impetus to the cement industry
still in its initial stages. The following decade saw tremendous progress in terms of
manufacturing units, installed capacity and production. This phase is also referred to as the
Nascent Stage of Indian Cement Industry.

During the earlier years, production of cement exceeded the demand. Society had a biased
opinion against the cement manufactured in India, which further led to reduction in demand.
The government intervened by giving protection to the Industry and by encouraging
cooperation among the manufacturers.

In 1927, the Concrete Association of India was formed with the twin goals of creating a
positive awareness among the public of the utility of cement and to propagate cement
consumption.

After Independence

The growth rate of cement was slow around the period after independence due to various
factors like low prices, slow growth in additional capacity and rising cost. The government
intervened several times to boost the industry, by increasing prices and providing financial
incentives. But it had little impact on the industry.

In 1956, the price and distribution control system was set up to ensure fair prices for both the
manufacturers and consumers across the country and to reduce regional imbalances and reach
self sufficiency.

Period Of Restriction (1969-1982)

The cement industry in India was severely restrained by the government during this period.
Government hold over the industry was through both direct and indirect means. Government
intervened directly by exercising authority over production, capacity and distribution of
cement and it intervened indirectly through price control.

In 1977 the government authorized higher prices for cement manufactured by new units or
through capacity increase in existing units. But still the growth rate was below par.

In 1979 the government introduced a three tier price system. Prices were different for cement
produced in low, medium and high cost plants.

However the price control did not have the desired effect. Rise in input cost, reduced profit
margins meant the manufacturers could not allocate funds for increase in capacity.

Partial Control (1982-1989)

To give impetus to the cement industry, the Government of India introduced a quota system
in 1982.A quota of 66.60% was imposed for sales to Government and small real estate
developers. For new units and sick units a lower quota at 50% was effected. The remaining
33.40% was allowed to be sold in the open market.

These changes had a desired effect on the industry. Profitability of the manufacturers
increased substantially, but the rising input cost was a cause for concern

After Liberalization

In 1989 the cement industry was given complete freedom, to gear it up to meet the challenges
of free market competition due to the impending policy of liberalization. In 1991 the industry
was de licensed. This resulted in an accelerated growth for the industry and availability of
state of the art technology for modernization. Most of the major players invested heavily for
capacity expansion. To maximize the opportunity available in the form of global markets, the
industry laid greater focus on exports. The role of the government has been extremely crucial
in the growth of the industry.
Future Trends

 The cement industry is expected to grow steadily in 2018-2019 and increase capacity
by another 50 million tons in spite of the recession and decrease in demand from the
 housing sector.
 The industry experts project the sector to grow by 9 to 10% for the current financial
year provided India's GDP grows at 7%.
 India ranks second in cement production after China.
 The major Indian cement companies are Associated Cement Company Ltd (ACC),
Grasim Industries Ltd, Ambuja Cements Ltd, J.K Cement Ltd and Madras Cement
Ltd.
 The major players have all made investments to increase the production capacity in
the past few months, heralding a positive outlook for the industry.
 The housing sector accounts for 50% of the demand for cement and this trend is
expected to continue in the near future.

An increased outflow in infrastructure sector, by the government as well as private builders,

has raised a significant demand of cement in India. It is the key raw material in construction
industry. Also, it has highly influenced those bigger companies to participate in the growing
sector. At least 125 plants set up by the big companies in India with about 300 other small
scale cement manufacturers, to fulfill the growing demand of cement. Being one of the vital
industries, the cement industry contributes to the nation's socioeconomic development. The
sum total utilization of cement in a year indicates the country's economic growth.

Cement plant was first set up in Calcutta, in 1889. At that time, the cement used to
manufacture from Argillaceous. In 1904, the first organized set up to manufacture cement
was commenced in Madras, which was named South India Industries Limited. Again in 1914,
another cement manufacturing unit was set up in Porbandar, Gujarat, but this time it was
licensed. In the early years of that era, the demand for the cement tremendously exceeded but
only after few years, the industry faced a severe downfall. To overcome from this the
worsening situation, the Concrete Association of India was founded in 1927. The
organization has two prime goals, one was to create awareness about utility of cement and
another was to encourage cement utilization.
Even after the independence, the growth of the cement industry was too gradual. In the year
1956, a Distribution Control System was established with an objective to provide Indian
manufacturers and consumers self sufficiency. Indian government then introduced a quota
system to provide an impetus to this industry, in which 66% of the sales was imposed to
government or small real estate developers. After the implementation of quota, the cement
industry tasted a sudden growth and profitability in India. In 1991, the government de-
licensed the cement industry. The growth of the industry accelerated forthwith and majority
of the industrialists invested heavily in the industry with the awarded freedom. The industry
started focusing on export also to double the opportunity available for it in global markets.
Today, the cement manufacturers in India have transformed into leading Indian exporters of
cement across the world.

The demand of cement in year 2018-2019 is expected to increase by 50 million tons despite
of the recession and decline in demand of housing sector. Against India's GDP growth of 7%,
the experts have estimated the cement sector to grow by 9 to 10 % in the current financial
year. Major Indian cement manufacturers and exporters have all made huge investments in
the last few months to increase their production capability. This heralds an optimistic outlook
for cement industry. The housing sector in India accounts for 50 % of the cement's demand.
And the demand is expected to continue. With the constant effort made by cement
manufacturers and exporters, India has become the second largest cement producer in the
world. Madras Cement Ltd., Associated Cement Company Ltd (ACC), Ambuja Cements Ltd,
Grasim Industries Ltd, and J.K Cement Ltd. are among few renowned names of the major
Indian cement companies.
 COMPANY PROFILE

UltraTech Cement Limited has an annual capacity of 18.2 million tonnes. It manufactures
and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland
Pozzalana Cement. It also manufactures ready mix concrete (RMC).

UltraTech Cement Limited has five integrated plants, six grinding units and three terminals
— two in India and one in Sri Lanka.

UltraTech Cement is the country’s largest exporter of cement clinker. The export markets
span countries around the Indian Ocean, Africa, Europe and the Middle East.
UltraTech’s subsidiaries are Dakshin Cement Limited and UltraTech Ceylinco (P) Limited.

The roots of the Aditya Birla Group date back to the 19th century in the picturesque town of
Pilani, set amidst the Rajasthan desert. It was here that Seth Shiv Narayan Birla started
trading in cotton, laying the foundation for the House of Birlas.

Through India's arduous times of the 1850s, the Birla business expanded rapidly. In the early
part of the 20th century, our Group's founding father, Ghanshyamdas Birla, set up industries
in critical sectors such as textiles and fibre, aluminium, cement and chemicals. As a close
confidante of Mahatma Gandhi, he played an active role in the Indian freedom struggle. He
represented India at the first and second round-table conference in London, along with
Gandhiji. It was at "Birla House" in Delhi that the luminaries of the Indian freedom struggle
often met to plot the downfall of the British Raj.
The principles by which he lived were soaked up by his grandson, Aditya Vikram Birla, our
Group's legendary leader.
 BOARD OF DIRECTORS

Mr. Kumar Mangalam Birla Mrs. Rajashree Birla Ms. Anita Ramachandran
Chairman Independent Director Non-Executive Director

Mrs. Alka Bharucha Mr Sunil Duggal Mr. K. C. Jhanwar

Independent Director Independent Director Managing Director

Mr. Anjani Kumar Agrawal Dr. Vikas Balia Mr. Vivek Agrawal
Independent Director Independent Director Wholetime Director and Chief
Marketing Officer
 Aditya Vikram Birla: putting India on the world map A formidable force in Indian
industry, Mr. Aditya Birla dared to dream of setting up a global business empire at the age of
24. He was the first to put Indian business on the world map, as far back as 1969, long before
globalisation became a buzzword in India.

In the then vibrant and free market South East Asian countries, he ventured to set up world-
class production bases. He had foreseen the winds of change and staked the future of his
business on a competitive, free market driven economy order. He put Indian business on the
globe, 22 years before economic liberalisation was formally introduced by the former Prime
Minister, Mr. Narasimha Rao and the former Union Finance Minister, Dr. Manmohan Singh.
He set up 19 companies outside India, in Thailand, Malaysia, Indonesia, the Philippines and
Egypt.

Interestingly, for Mr. Aditya Birla, globalisation meant more than just geographic reach. He
believed that a business could be global even whilst being based in India. Therefore, back in
his home-territory, he drove single-mindedly to put together the building blocks to make our
Indian business a global force. Under his stewardship, his companies rose to be the world's
largest producer of viscose staple fibre, the largest refiner of palm oil, the third largest
producer of insulators and the sixth largest producer of carbon black. In India, they attained
the status of the largest single producer of viscose filament yarn, apart from being a producer
of cement, grey cement and rayon grade pulp. The Group is also the largest producer of
aluminium in the private sector, the lowest first cost producers in the world and the only
producer of linen in the textile industry in India.

At the time of his untimely demise, the Group's revenues crossed Rs.8,000 crore globally,
with assets of over Rs.9,000 crore, comprising of 55 benchmark quality plants, an employee
strength of 75,000 and a shareholder community of 600,000.

Most importantly, his companies earned respect and admiration of the people, as one of
India's finest business houses, and the first Indian International Group globally. Through this
outstanding record of enterprise, he helped create enormous wealth for the nation, and respect

for Indian entrepreneurship in South East Asia. In his time, his success was unmatched by any other
industrialist in India.
That India attains respectable rank among the developed nations, was a dream he forever cherished.
He was proud of India and took equal pride in being an Indian.

Under the leadership of our Chairman, Mr. Kumar Mangalam Birla, the Group has sustained and
established a leadership position in its key businesses through continuous value-creation. Spearheaded
by Grasim, Hindalco, Aditya Birla Nuvo, Indo Gulf Fertilisers and companies in Thailand, Malaysia,
Indonesia, the Philippines and Egypt, the Aditya Birla Group is a leader in a swathe of products —
viscose staple fibre, aluminium, cement, copper, carbon black, palm oil, insulators, garments. And
with successful forays into financial services, telecom, software and BPO, the Group is today one of
Asia's most diversified business groups.

Our vision
"To actively contribute to the social and economic development of the communities in which we
operate. In so doing, build a better, sustainable way of life for the weaker sections of society and raise
the country's human development index."

— Mrs. Rajashree Birla, Chairperson,

The Aditya Birla Centre for Community Initiatives and Rural Development

Making a difference
Before Corporate Social Responsibility found a place in corporate lexion, it was already textured into
our Group's value systems. As early as the 1940s, our founding father Shri G.D Birla espoused the
trusteeship concept of management. Simply stated, this entails that the

wealth that one generates and holds is to be held as in a trust for our multiple stakeholders. With
regard to CSR, this means investing part of our profits beyond business, for the larger good of
society.

While carrying forward this philosophy, his grandson, Aditya Birla weaved in the concept of
'sustainable livelihood', which transcended cheque book philanthropy. In his view, it was unwise to
keep on giving endlessly. Instead, he felt that channelising resources to ensure that people have the
wherewithal to make both ends meet would be more productive. He would say, "Give a hungry man
fish for a day, he will eat it and the next day, he would be hungry again. Instead if you taught him how
to fish, he would be able to feed himself and his family for a lifetime."
Taking these practices forward, our chairman Mr. Kumar Mangalam Birla institutionalized the concept
of triple bottom line accountability represented by economic success, environmental responsibility and
social commitment. In a holistic way thus, the interests of all the stakeholders have been textured into
our Group's fabric.

The footprint of our social work today straddles over 3,700 villages, reaching out to more than 7
million people annually. Our community work is a way of telling the people among whom we operate
that We Care.

Our strategy

Our projects are carried out under the aegis of the "Aditya Birla Centre for Community Initiatives and
Rural Development", led by Mrs. Rajashree Birla. The Centre provides the strategic direction, and the
thrust areas for our work ensuring performance management as well.

Our focus is on the all-round development of the communities around our plants located mostly in
distant rural areas and tribal belts. All our Group companies —- Grasim, Hindalco, Aditya Birla Nuvo,
Indo Gulf and UltraTech have Rural Development Cells which are the implementation bodies.

Projects are planned after a participatory need assessment of the communities around the plants. Each
project has a one-year and a three-year rolling plan, with milestones and measurable targets. The
objective is to phase out our presence over a period of time and hand over the reins of further
development to the people. This also enables us to widen our reach. Along with internal performance
assessment mechanisms, our projects are audited by reputed external agencies, who measure it on
qualitative and quantitative parameters, helping us gauge the effectiveness and providing excellent
inputs.

Our partners in development are government bodies, district authorities, village panchayats and the
end beneficiaries -- the villagers. The Government has, in their 5-year plans, special funds earmarked
for human development and we recourse to many of these. At the same time, we network and
collaborate with like-minded bilateral and unilateral agencies to share ideas, draw from each other's
experiences, and ensure that efforts are not duplicated. At another level, this provides a platform for
advocacy. Some of the agencies we have collaborated with are UNFPA, SIFSA, CARE India, Habitat
for Humanity International, Unicef and the World Bank.
 CHAPTER-IV
DATA ANALYSIS
 & INTERPRETATION

PROFITABILITY RATIOS

Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable
rate of return

Gross margin, Gross profit margin or Gross Profit Rate

::: OR :::

Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS)

Note: Operating income is the difference between operating revenues and operating expenses, but it is
also sometimes used as a synonym for EBIT and operating profit. This is true if the firm has no non-
operating income. (Earnings before interest and taxes / Sales)
Profit margin, net margin or net profit margin

Return on equity (ROE)

Return on assets (ROA ratio or Du Pont Ratio)

Return on assets (ROA)

Return on net assets (RONA)

Return on capital (ROC)

Return on capital employed (ROCE)

 Note: this is somewhat similar to (ROI), which calculates Net Income per Owner's Equity

NET PROFIT RATIO:

Net profit \net sales
Table-1
Year Net profit Net sales Net profit ratio
2024-2023 2014.73 22936.17 8.78407333
2023-2022 2144.47 20279.80 10.5744139
2022-2021 2655.43 20174.94 13.1620217
2021-2020 2446.19 18270.69 13.3886022
2020-2019 1404.23 13205.64 10.6335626

Chart-1

Net profit ratio

2024-23 2023-22 2022-21 2021-20 2020-19

Interpretation:
The net profit of the company is in the decreasing position because of the expenses in the industry are increased
the net profit will be in decreasing position in the yare 2019-2024.

OPERATING RATIO:
Operating expenses\Net sales
Table-2
Year Operating Expenses Net sales Operating ratio
2024-2023 18851.20 22936.17 82.18
2023-2022 16354.92 20279.80 80.64
2022-2021 15617.65 20174.94 77.42
2021-2020 14144.45 18270.69 77.41
2020-2019 10718.55 13205.64 81.16

Chart-2

Operating ratio

2024-23 2023-22 2022-21 2021-20 2020-19

Interpretation:
The operating ratio is a financial term defined as a company's operating expenses as a percentage of revenue.
This financial ratio is most commonly used for industries which require a large percentage of revenues to
maintain operations in the year 2019-2024.

Profitability = (100-Operating ratio %)

Table-3
Year Operating ratio Profitability(100-OR)
2024-2023 82.18 17.81
2023-2022 80.64 19.36
2022-2021 77.42 22.58
2021-2020 77.41 22.59
2020-2019 81.16 18.84

Chart-3

Profitability(100-OR)

2024-23 2023-22 2022-21 2021-20 2020-19

Interpretation:
Profitability is the primary goal of all business ventures. Without profitability the business will not survive in the
long run. So measuring current and past profitability and projecting future profitability is very important and it is
high in Ultratech cements limited.
RETURN ON INVESTMENT:
Net profit/Total investment
Table-4
Year Net profit Total investment ROI
2024-2023 2014.73 5208.75 0.38
2023-2022 2144.47 5391.67 0.39
2022-2021 2655.43 5108.72 0.51
2021-2020 2446.19 3788.77 0.46
2020-2019 1404.23 3730.32 0.37

Chart-4

ROI

2024-23 2023-22 2022-21 2021-20 2020-19

Interpretation:
A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a
number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of
the investment has been increased to 2019-2024.
OPERATING MARGIN:

Operating income\Net sales

Table-5

Year Operating income Net sales Operating margin

2024-2023 4566.81 22936.17 19.91
2023-2022 3817.90 20279.80 18.82
2022-2021 4675.48 20174.94 23.17
2021-2020 4105.91 18270.69 22.47
2020-2019 2553.20 13205.64 19.33

Chart-5

Operating margin

2024-23 2023-22 2022-21 2021-20 2020-19

Interpretation:

The two basic components for the calculation of operating ratio are operating cost (cost of goods sold plus
operating expenses) and net sales. Operating expenses normally include (a) administrative and office expenses
and (b) selling and distribution expenses. in the year 2022 the net sales has been increased.

RETURN ON ASSETS:
Net income\Average total Assets
Table-6
Year Net income total Assets ROA
2024-2023 2014.73 25369.51 7.94
2023-2022 2144.47 21970.29 9.76
2022-2021 2655.43 19697.50 13.48
2021-2020 2446.19 16667.95 14.67
2020-2019 1404.23 14810.64 9.42

Chart-6

ROA

2024-23 2023-22 2022-21 2021-20 2020-19

Interpretation:

An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient
management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its
total assets, ROA is displayed as a percentage and it was not improved in the year 2023.
 CHAPTER-V
FINDINGS
CONCLUSION & SUGGESTIONS

FINDINGS

 The Ultratech cements limited net capital is satisfactory between the years 2017-18 since it shows
increasing trend; but after that it is in declining position.
 The current ratio of Ultratech cements limited is satisfactory during the period of study 2019-20 to
2023-24. It is increased but after that it is declining.
  The average quick ratio of Ultratech cements limited is not good though the quick ratio is showing
maximum value of 1.14 in the year 2023-24 and then it is inclining to be deal.
 Assets turnover ratio of Ultratech cements limited increased. The company has to maintain this.
 Turnover ratio of Ultratech cements limited is also increased gradually, without any fit falls up to 2019-
24. But in the year 2019-20 it is declined, and again it has increased in the year 2020-21. Good inventory
management is good sign for efficient management
 Total Assets turnover ratio of Ultratech cements limited is not satisfactory because it is always below
one, except in the year 2023-24 having a value of 79.41.
 Return on investment is not satisfactory. This indicates that the company’s funds are not being utilized in
a better way.

CONCLUSION

 The Ultratech cements limited Net Profit Ratio is showing positive profit in the year 2023-24. This
event is an expected one because since from the previous two years it is showing the incline stage in Net
Profit Ratio.
 The Gross Profit Margin of Ultratech cements limited increases in decreases due to the increase in sales
 Profit Margin of Ultratech cements limited is decreasing and showing negative profit because there is
increase in the price of copper
  The Ultratech cements limited Net Profitability Ratio is satisfactory.
 The Ultratech cements limited return on Total Assets ratio shows a negative sign in the year 2023-24.
 The Operating Ratio of Ultratech cements limited increase in the year 2019-20 and reached in the year
2017-18 So the company has to reduce its operating costs.
 The Operating Ratio of Ultratech cements limited is satisfactory. Due to increase in cost of production,
this ratio is decreasing. So the has to reduce its office administration expenses

SUGGESTIONS

 Improve position funds should be utilized properly.

 Better Awareness to increase the sales is suggested.
 Cost cut down mechanics can be employed.
 Better production technique can be employed.
 The investment on raw material should be made as per the requirement. Unnecessary investment may
block up the funds.
 Neither too high nor too low inventory turnover ratios may reduce profit and liquidity position of the
industry. So, proper balance should be made to increase profits and to ensure liquidity.
 The raw material should be acquired from the right source at right quality and at right cost.
 The process that was being used by Ultratech cements limited with the purchasing department should
undergo changes; so that, it seeks enhance the celerity of the delivery of a product without compromising
its quality by improving the utilization of materials, labor and equipment.
 BIBLIOGRAPHY

BIBLIOGRAPHY

BOOKS

1. Khan, M Y and P K Jain, Financial Management, Tata McGraw-Hill Publishing Co.,

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