IMPACT OF PIOTROSKI SCORE ON P/E RATIO: A STUDY ON INDIAN CEMENT SECTOR

IMPACT OF PIOTROSKI SCORE ON P/E RATIO: A STUDY ON INDIAN CEMENT SECTOR Sri Ayan Chakraborty Faculty: Management: University Program (Techno India University), ICA Eduskills chakrabortyayankumar78@gmail.com ABSTRACT The intrinsic value of a firm depends on several factors like growth in Earnings per Share, Debt Equity ratio etc, which have an impact on its Market Price. During several decades diverse capital market anomalies have been established that stood the test of time and independent scrutiny. Piotroski F Score, named after Professor Joseph Piotroski is a discrete score between 0-9 which plays a significant role in determining the financial strength of a firm. It is used to determine the best value stocks, with nine being the best and zero being the worst. Every criterion when met one point is awarded; otherwise, no points are awarded. The points are then added up to determine the best value stocks. The criteria are divided into 3 groups namely: Profitability, Leverage & Liquidity and Operating Efficiency. This paper focuses on analyzing the Profitability, Leverage & Liquidity and Operating Efficiency ratios as well as the impact of Operating Cash Flow/Total Assets, Leverage, MV/BV, Return on Equity and Piotroski F Score on P/E of the Leading Indian Cement Companies. Keywords: Leverage, Operating Cash Flow, Return on Assets, Piotroski F Score, P/E, Current Ratio, Long Term Debt, Operating Margin, P/E ratio. I. OBJECTIVE OF THE STUDY 1. To analyze the Profitability, Leverage & Liquidity and Operating Efficiency Ratios leading Cement Companies and calculate the Piotroski F Score.. To show the change in Piotroski F Score over the years from 01 to 017. 3. To highlight the impact of Operating Cash Flow/Total Assets, Leverage, MV/BV, ROE and Piotroski F Score on P/E ratio. REVIEW OF LITERATURE A number of researchers in finance and accounting have extensively researched on F Score and its impact on Market Return. These have motivated the corporate to identify and improvise upon their financial performance. A brief review of some of these studies has been presented. Jegadeesh and Titman s (001) study affirms that buying winning stocks and selling losing stocks based on their past performance provides abnormal returns and this zero cost momentum strategy provides abnormal returns. Sehgal and Balakrishnan (00) report continuation of trend in short term and significant high returns of value investing strategy in Indian market from July 1989 to March 1999 for 364 companies. Fama and French (01) have added momentum as a fourth factor to their three factor model to explain the excess return. Academic literature on value investing has grown leaps and bounds around the momentum strategies. Fama & French, 1993; Pontiff & Lawrence (1998) believed that the stock with high market to book value is often financially distressed and thus the larger returns generated by the stock is simply a compensation for risk. 59

After Basu (1977, 1983) and Rosenberg, Reid and Lanstein (1985) conducted early research on the systematic outperformance of value stocks over growth stocks, the explanation for this return difference has been the topic of discussions among academics and practitioners alike. Ou and Penman (1989) similarly showed the array of financial ratios created from historical Financial Statements have the power to predict a a firm s future earnings. Lev B, Thiagarajan (1993) analyzed 1 financial ratios and demonstrated their positive effect on future earnings growth. They showed that fundamental signals are correlated with contemporaneous returns after considering Current Earnings, firm size and macro variable factors. II. SCOPE OF STUDY The financial statement is a mirror, which reflects the financial position and operational strength and weakness of concern. But a mere look at the financial statement will not reveal some crucial information. To bring out the hidden information, financial statements over a period are analyzed. This study is concerned with the analysis of Profitability, Leverage & Liquidity and Efficiency ratios of the Leading Indian Cement Firms as well as impact of Operating CF/ TA, Asset Turnover, Leverage, Current Ratio, Operating Margin & F Score on P/E ratio. PERIOD OF STUDY The study covers a period of 6 years from 011-1 to 016-17. METHODOLOGY Sources of Data The study is based on analysis of secondary data. Information required for the study has been collected from the Annual Reports of Ultratech Cement, ACC, Ambuja Cement, Shree Cement, India Cement, Prism Cement, Binani Cement, Ramco Cement, Birla Corp, JK Cement and different books, journal, magazines, and data collected from various websites. III. TOOLS APPLIED In this study various tools: Financial Tools Ratio Analysis and Statistical Tools (i.e.) Mean and ANOVA, t-test has been used for data analysis. MEAN = Sum of variable/n Standard Deviation is used to see how measurements for a group are spread out from Mean. A low Standard Deviation means that most of the numbers are very close to the average and vice-versa. (SD) = X /N-( X/N) Coefficient of Variation is a standardized measure of dispersion of a probability distribution or frequency distribution. It is the ratio of standard deviation to mean. Higher the coefficient of variation, the greater the level of dispersion around mean and vice-versa. Coefficient of Variation (COV) = SD/MEAN* 100 t-test (Two-Sample Assuming Unequal Variances): t-test assesses whether the means of two groups are statistically different from each other. Hypothesis An ANOVA is statistical hypothesis in which the sampling distribution of test statistic when null hypotheses is true. Null hypotheses have been set and adopted for the analysis of data. The null hypotheses are represented by H 0. It is a negative statement which avoids personal bias of investigator during data collection as well as the time of drawing conclusion. IV. LIMITATION OF THE STUDY 1. The study is related to a period of 6 years.. Data is secondary i.e. they are collected from the published Annual Reports 3. Profitability, Leverage & Liquidity and Efficiency ratios have been considered for this study. Indian Cement Sector & its Key Players Because of its strong linkages to other sectors including construction, the Indian Cement Industry plays an important role in the development of economy. ULTRATECH CEMENT: Headquartered in Mumbai, Ultra-Tech Cement Ltd was founded in 1983. It has a production capacity of 93 million tonnes per annum (MTPA) of grey cement. It operates across India, Bangladesh, Bahrain, UAE, and Sri Lanka. ACC: Headquartered in Mumbai, ACC was founded in 1936. It is the second largest cement company with annual production capacity of 33.4 million tonnes. Its operations include over 40 ready mix concrete plants, 1 sales offices, & several zonal offices. AMBUJA CEMENT: Headquartered in Mumbai, Ambuja was founded in 1983. It is the third largest cement company with annual production capacity of 9.65 million tonnes. It has 5 integrated cement manufacturing plants and 8 cement grinding units. 60

SHREE CEMENTS: Headquartered in Kolkata, Shree Cements was founded in1979 in Bewar in Ajmer district of Rajasthan. It is the fourth largest cement company with annual production capacity of 13.5 million tonnes. It has 6 cement manufacturing plants located at Beawar, Ras, Khushkhera, Jaipur, Rajasthan and Uttarakhand. RAMCO CEMENT: Headquartered in Chennai, Ramco was founded in 1984. It is the fifth largest cement company with annual production capacity of 16.45 million tonnes. It has 8 manufacturing plants including grinding unit. It also produces Ready Mix Concrete and Dry Mortar products. INDIA CEMENTS: Headquartered in Tirunelveli, India Cements was founded in 1946. It is the sixth largest cement company with annual production capacity of 15.5 million tonnes. It manufactures cement for various applications including, precast concrete items, concrete components, and multi-storey buildings, as well as runways, concrete roads, bridges and for general-purpose use. PRISM CEMENT: Prism is India s 8th leading integrated Building Materials Company, with a wide range of products from cement, ready-mixed concrete, tiles, and bath products to kitchens. BINANI CEMENT: Headquartered in Mumbai, Binani was founded in the year 187. It is the seventh largest cement company with annual production capacity of 11.5 million tonnes. It has integrated plants in India &China, and grinding units in Dubai. BIRLA CORP: M.P Birla is one of the top Industrial groups in India. It offers wide range of products including auto interiors, cables, jute, cement etc. JK CEMENT: Headquartered in Mumbai, J.K Cement was founded by Lala Kamlapat Singhania. It is one of the top manufacturers of white cement in India. It has 3 cement production plants located in Karnataka, Andhra Pradesh, & Maharashtra. It produces types of cements namely Portland Slag Cement, Ordinary Portland Cement and Ground Granulated Blast Furnace Slag. PREFACE Though investments in Emerging Market are an important destination for investors still Investors face challenge while investing in market deep value stocks. Investment Valuation by applying F Score is limited to trading in market space. F Score can be used to measure the financial strength of a portfolio in terms of Return & Liquidity, analysis of a particular stock, effect of management decision on financial health of a firm. F score calculation is based on 9 criteria divided into 3 groups namely Profitability, Leverage, Liquidity and Source of Funds & Operating Efficiency. 1. Profitability Return on Assets Operating Cash Flow Accruals (Operating CF/ Total Assets) Revenue: It is the income a business generates from its Operating Activities, after deducting Sales Returns and Indirect Taxes. It plays a pivotal role behind the success and growth of an enterprise. EXHIBIT 1: REVENUE Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 1,90,775 1,0,37 85,10 58,981 46,310 45,498 30,694 3,36,869 5,378 01-13,11,561 1,13,58 97,395 55,903 51,595 47,73 44,811 38,308 6,030 9,040 013-14,14,433 1,11,501 91,099 58,873 50,848 49,616 47,356 36,835 30,164 7,815 014-15,40,558 1,17,388 99,305 64,536 50,604 55,840 43,31 36,554 3,099 33,874 015-16,51,53 1,17,97 93,880 55,136 55,348 5,31 37,844 35,818 3,68 37,855 016-17,53,749 1,11,676,00,940 84,9 58,609 50,113 36,660 39,673 43,477 40,63 Mean,7,101 1,1,415 1,11,305 6,953 5,19 50,170 40,113 36,571 31,0 3,431 SD 5,337 5,643 44,19 10,964 4,5 3,593 6,174,533 7,084 6,019 COV 0.11 0.050 0.397 0.174 0.081 0.07 0.154 0.069 0.7 0.186 CAGR (%) 5.871 1.755 18.717 7.40 4.83 1.951 3.616 4.39 13.711 9.865 The above Exhibit depicts that Ultratech reported the highest mean in terms of Revenue followed by ACC and Ambuja Cement. Ambuja reported the highest CAGR of 18.7% followed by Birla Corp & JK Cements. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Revenue of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Revenue of Cement Firms differ over years) 61

EXHIBIT : REVENUE: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 13,6,608.00,7,101.33 64,19,38,369.73 ACC 6 6,74,489.70 1,1,414.95 3,18,4,698.05 AMBUJA CEMENT 6 6,67,89.40 1,11,304.90 1,95,9,33,094.81 SHREE CEMENT 6 3,77,70.50 6,953.4 1,0,14,070.65 INDIA CEMENT 6 3,13,31.94 5,18.8 1,80,81,158.14 PRISM CEMENT 6 3,01,00.40 50,170.07 1,9,06,806.70 BINANI CEMENT 6,40,675.71 40,11.6 3,81,1,39.1 RAMCO CEMENT 6,19,43.80 36,570.63 64,13,98.79 BIRLA CORP 6 1,87,319.6 31,19.88 5,01,86,088.31 JK CEMENT 6 1,94,585.8 3,430.97 3,6,9,091.93 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups,01,31,14,77,487.76 9,36,79,41,943.08 76.895969 3.70337E-6.073351 Within Groups 14,54,4,87,731.13 50 9,08,85,754.6 Total,15,85,57,65,18.89 59 Above analysis shows that the F value (76.895969) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Revenue of Cement Firms differs over the years. Assets are resources owned by enterprise from which it can generate or yield future benefits. Total Assets include both Non Current Assets (Tangible & Intangible) and Current Assets. EXHIBIT 3: TOTAL ASSETS Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1,49,037 1,19,10 1,15,767 46,951 86,695 40,439 67,506 60,58 40,747 35,760 01-13,95,898 1,19,8 1,3,456 66,39 9,5 45,754 65,10 64,714 45,93 40,078 013-14 3,1,940 1,1,011 1,9,568 7,685 91,317 46,0 69,676 68,455 48,85 57,633 014-15 3,83,678 1,6,816 1,38,785 85,546 1,08,38 48,701 77,03 69,398 51,017 69,838 015-16 4,1,033 1,8,000 1,41,330 94,63 1,06,915 50,131 79,047 69,443 5,93 75,319 016-17 4,,187 1,33,865 3,7,330 1,11,660 1,09,347 48,753 73,760 70,705 96,978 70,185 Mean 3,47,46 1,4,697 1,6,706 79,634 99,138 46,663 7,05 67,16 55,859 58,135 SD 69,37 5,873 81,06,711 10,19 3,473 5,57 3,839 0,574 16,760 COV 0.00 0.047 0.499 0.85 0.10 0.074 0.077 0.057 0.368 0.88 CAGR (%) 11.134.346 3.106 18.919 4.75 3.810 1.788 3.139 18.937 14.438 The above Exhibit depicts that Ultratech reported the highest mean in terms of Total Assets followed by Ambuja & ACC. Ambuja reported the highest CAGR of 3.106% followed by Birla Corp & Shree Cements. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Total Assets of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Total Assets of Cement Firms differ over years) EXHIBIT 4: TOTAL ASSETS: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 0,84,77.90 3,47,46.15 4,81,4,78,33.84 ACC 6 7,48,183.40 1,4,697.3 3,44,95,94.73 AMBUJA CEMENT 6 9,76,34.40 1,6,705.73 6,59,44,3,664.54 SHREE CEMENT 6 4,77,803.0 79,633.87 51,58,01,153.51 INDIA CEMENT 6 5,94,88.9 99,138.05 10,5,90,056.17 PRISM CEMENT 6,79,979.50 46,663.5 1,0,64,495.59 BINANI CEMENT 6 4,3,31.47 7,05.08 3,05,51,863.86 RAMCO CEMENT 6 4,03,97.60 67,16.7 1,47,39,309.31 BIRLA CORP 6 3,35,153.08 55,858.85 4,3,89,007.7 JK CEMENT 6 3,48,811.98 58,135.33 8,08,81,99.67 6

ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 4,39,84,6,58,66.0 9 48,87,14,06,514.004 38.11731.35403E-19.073351 Within Groups 64,10,65,79,004.70 50 1,8,1,31,580.0940 Total 5,03,94,9,37,630.7 59 Above analysis shows that the F value (38.11731) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Total Assets of Cement Firms differs over the years. Return on Assets measures the quality of the Assets owned and shows how profitable a company's assets are in generating its revenues. Higher the ratio, it indicates that a company is utilizing its Assets effectively. EXHIBIT 5: RETURN ON ASSETS (%) Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 76.60 85.88 73.61 15.6 53.4 11.51 45.47 53.1 56.13 70.97 01-13 71.50 95. 78.89 84.8 55.94 104.30 68.81 59.0 57.47 7.46 013-14 66.61 9.14 70.31 81.00 55.68 107.39 67.97 53.81 61.78 48.6 014-15 6.70 9.57 71.55 75.44 46.71 114.66 56.10 5.67 6.9 48.50 015-16 61.05 9.17 66.43 58.6 51.77 104.19 47.87 51.58 6.50 50.6 016-17 60.10 83.4 61.39 75.49 53.60 10.79 49.70 56.11 44.83 57.88 Mean 66.43 90.3 70.36 83.35 5.85 107.64 55.99 54.43 57.60 58.06 SD 6.51 4.54 6.01.57 3.39 4.89 10.4.78 6.85 11.16 COV 0.098 0.050 0.085 0.71 0.064 0.045 0.183 0.051 0.119 0.19 CAGR (%) -4.736-0.578-3.565-9.684 0.068-1.791 1.796 1.067-4.394-3.996 The above Exhibit depicts that Prism reported the highest mean in terms of Return on Assets followed by ACC and Shree Cements. Ultratech, ACC, Ambuja, Shree, Prism, J K Cements & Birla Corp reported a Negative CAGR, indicating that Return on Assets have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Return on Assets of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Return on Assets / Total Assets of Cement Firms differ over years) EXHIBIT 6: RETURN ON ASSETS (%): CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 398.557 66.46 4.435 ACC 6 541.393 90.3 0.611 AMBUJA CEMENT 6 4.173 70.36 36.143 SHREE CEMENT 6 500.094 83.349 509.398 INDIA CEMENT 6 317.14 5.854 11.461 PRISM CEMENT 6 645.840 107.640 3.94 BINANI CEMENT 6 335.94 55.987 104.794 RAMCO CEMENT 6 36.577 54.430 7.77 BIRLA CORP 6 345.619 57.603 46.991 JK CEMENT 6 348.336 58.056 14.444 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 18,7.338 9,030.60 1.879 1.9441E-14.073351 Within Groups 4,639.640 50 9.793 Total,911.978 59 Above analysis shows that the F value (1.879) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Long-Term Debt / Total Assets of Cement Firms differs over the years. Operating Cash Flow is the Cash generated by a business from its Operations during a financial period. It indicates whether a company have sufficient amount of Cash to maintain and grow its operations. EXHIBIT 7: OPERATING CASH FLOWS 63

Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 33,833 15,760 15,318 19,63 9,419,667 5,13 8,638,450 5,198 01-13 36,379 15,769 18,600 1,597 7,318,599 5,844 7,014 1,964 3,80 013-14 34,545 10,634 1,675 14,007 5,161 566,14 5,086 3,588 3,643 014-15 41,90 13,5 16,755 1,385 6,451 1,986-45 9,316,818,56 015-16 45,55 14,566 15,566 15,661 9,637 4,61 3,400 10,888,487 5,800 016-17 49,935 13,905 8,151,016 7,565 6,756 3,597 11,174 6,773 7,595 Mean 40,308 14,06 17,844 15,988 7,59 3,199 3,95 8,686 3,347 4,770 SD 6,485 1,903 5,409 3,888 1,71,178,56,33 1,76 1,804 COV 0.161 0.136 0.303 0.43 0.7 0.681 0.685 0.68 0.57 0.378 CAGR (%) 8.097 -.473 1.943.708-4.89 0.43-7.153 5.84.556 7.878 The above Exhibit depicts that Ultratech reported the highest mean in terms of Operating Cash Flows followed by Ambuja & Shree Cement. Birla Corp reported the highest CAGR of.556%. ACC, India and Binani Cements reported a Negative CAGR, indicating that Operating Cash Flows have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Operating Cash Flows of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Operating Cash Flows of Cement Firms differ over years) EXHIBIT 8: OPERATING CASH FLOWS: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6,41,848.30 40,308.05 4,0,5,31.35 ACC 6 84,156.10 14,06.0 36,1,53.99 AMBUJA CEMENT 6 1,07,06.60 17,843.77,9,56,53. SHREE CEMENT 6 95,98.80 15,988.13 1,51,14,699.65 INDIA CEMENT 6 45,549.88 7,591.65 9,61,4.63 PRISM CEMENT 6 19,195.80 3,199.30 47,44,40.88 BINANI CEMENT 6 19,77.13 3,95.35 50,88,408.77 RAMCO CEMENT 6 5,115.10 8,685.85 54,38,834.5 BIRLA CORP 6 0,079.67 3,346.61 31,05,881.46 JK CEMENT 6 8,617.48 4,769.58 3,54,04.96 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 6,99,7,97,609.51 9 77,74,77,51.168 67.804 6.6307E-5.073351 Within Groups 57,31,88,867.14 50 1,14,63,777.348 Total 7,57,04,86,476.66 59 Above analysis shows that the F value (67.804) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Operating Cash Flows of Cement Firms differs over the years. Operating Cash Flow on Total Assets is an efficiency ratio which rates the cash flows of company assets without being affected by income measurements. It is calculated by dividing Operating Cash Flows by Total Assets. 64

EXHIBIT 9: OPERATING CASH FLOWS / TOTAL ASSETS (%) Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 13.585 13.0 13.3 41.07 10.864 6.595 7.7 14.58 6.01 14.536 01-13 1.94 13.0 15.066 18.99 7.934 5.681 8.974 10.838 4.337 9.53 013-14 10.730 8.788 9.78 19.70 5.65 1.5 3.075 7.49 7.349 6.30 014-15 10.91 10.663 1.07 14.478 5.955 4.079-0.550 13.43 5.53 3.668 015-16 10.983 11.380 11.014 16.550 9.013 9.18 4.30 15.679 4.756 7.701 016-17 11.88 10.388 8.600 19.717 6.918 13.858 4.877 15.804 6.984 10.81 Mean 11.74 11.76 11.68 1.67 7.73 6.776 4.733 1.905 5.87 8.763 SD 1.094 1.78.347 9.689 1.98 4.369 3.400 3.39 1.196 3.774 COV 0.093 0.153 0.0 0.447 0.57 0.645 0.718 0.51 0.05 0.431 CAGR (%) -.733-4.708-8.56-13.63-8.631 16.01-8.783.080 3.043-5.73 The above Exhibit depicts that Shree Cements reported the highest mean in terms of Operating Cash Flows / Total Assets followed by Ramco. Prism reported the highest CAGR of 16.01%. Ultratech, ACC, Ambuja, Shree, India, Binani & JK Cements all reported a Negative CAGR, indicating that Operating Cash Flows / Total Assets ratio have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Operating Cash Flows / Total Assets of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Operating Cash Flows / Total Assets of Cement Firms differ over years) EXHIBIT 10: OPERATING CASH FLOWS / TOTAL ASSETS (%): CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 70.34 11.737 1.1963 ACC 6 67.6578 11.763.9849 AMBUJA CEMENT 6 69.7655 11.676 5.5080 SHREE CEMENT 6 130.0336 1.673 93.8788 INDIA CEMENT 6 46.3371 7.78 3.984 PRISM CEMENT 6 40.6555 6.7759 19.0877 BINANI CEMENT 6 8.3996 4.7333 11.5579 RAMCO CEMENT 6 77.4318 1.9053 10.4898 BIRLA CORP 6 34.9608 5.868 1.498 JK CEMENT 6 5.5781 8.7630 14.396 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 1,79.677 9 14.1863 8.654 1.10968E-07.073351 Within Groups 81.506 50 16.4301 Total,101.183 59 Above analysis shows that the F value (8.654) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Operating Cash Flows / Total Assets (%) of Cement Firms differs over the years.. Leverage, Liquidity & Source of Funds Long-term Debt/ Total Assets Current Ratio Shares Outstanding 65

EXHIBIT 11: LONG TERM DEBT Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 48,433 5,061 507 8,177 17,519.0 10,631 34,451. 15,007.5 7,5.4 9,967. 01-13 51,691 850 393 4,431 1,31. 1,480 33,943.5 13,930.6 8,973.8 10,595.3 013-14 60,08 0 334 4,467,407.0 14,478 38,193.8 15,03.5 9,163.1 4,415. 014-15 53,798 0 316 4,080 5,068.0 16,340 48,667.5 17,59.1 10,933.7 7,34.8 015-16 63,708 0 36 5,307 1,65. 14,769 51,48.8 10,594.6 7,896.9 8,710.7 016-17 49,935 0 36 5,187 4,514.9 11,900 54,474.7 5,110.4 40,490.8 9,06.3 Mean 54,68.8 985. 337.0 5,75.0,015.9 13,433 43,496.6 1,851 14,163.4 1,664.3 SD 6,054.9,05.4 103.1 1,498.4,719.6,118.4 9,039.4 4,377 1,95.7 8,970. COV 0.111.056 0.306 0.84 0.14 0.158 0.08 0.341 0.915 0.414 CAGR (%) 0.61-100 -14.06-8.701 6.951.8 9.597-19.383 40.0 3.866 The above Exhibit depicts that Ultratech reported the highest mean in terms of Long-Term Debt indicating the maximum Debt Capital followed by Binani. Birla Corp reported the highest CAGR of 40.0%. ACC, Ambuja, Shree & Ramco Cements reported a Negative CAGR, indicating that Debt Capital have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Long-Term Debt of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Long-Term Debt of Cement Firms differ over years) EXHIBIT 1: LONG TERM DEBT: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 3,7,77.60 54,68.767 3,66,61,41.44 ACC 6 5,911.10 985.183 41,0,37.91 AMBUJA CEMENT 6,0.0 337.033 10,69.66 SHREE CEMENT 6 31,649.9 5,74.983,45,59.3 INDIA CEMENT 6 1,3,095.3,015.886 73,96,380.0 PRISM CEMENT 6 80,598.0 13,433.033 44,87,678.83 BINANI CEMENT 6,60,979.39 43,496.564 8,17,10,676.71 RAMCO CEMENT 6 77,105.7 1,850.950 1,91,57,971.9 BIRLA CORP 6 84,980.6 14,163.436 16,77,73,558.77 JK CEMENT 6 1,9,985.53 1,664.56 8,04,64,666.99 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 17,03,37,75,515.6 9 1,89,6,41,73.96 46.846.68097E-1.073351 Within Groups,0,00,5,407.38 50 4,04,01,048.148 Total 19,05,38,7,9.99 59 Above analysis shows that the F value (46.846) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Long-Term Debt of Cement Firms differs over the years. Debt Asset Ratio: It measures the Long Term Debt of a company as a percentage of Total Assets. A high Debt / Asset ratio indicates high amount of Interest expenses which has to be paid irrespective of the profit volume. 66

EXHIBIT 13: LONG TERM DEBT / TOTAL ASSETS Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 0.19 0.04 0.00 0.17 0.0 0.6 0.51 0.5 0.18 0.8 01-13 0.17 0.01 0.00 0.07 0.3 0.7 0.5 0. 0.0 0.6 013-14 0.19 0.00 0.00 0.06 0.5 0.31 0.55 0. 0.19 0.4 014-15 0.14 0.00 0.00 0.05 0.3 0.34 0.63 0.5 0.1 0.39 015-16 0.15 0.00 0.00 0.06 0.0 0.9 0.65 0.15 0.15 0.38 016-17 0.1 0.00 0.00 0.05 0. 0.4 0.74 0.07 0.4 0.41 Mean 0.16 0.01 0 0.08 0. 0.9 0.60 0.19 0.3 0.36 SD 0.03 0.0 0 0.05 0.0 0.03 0.09 0.07 0.10 0.07 COV 0.181.056 0.510 0.649 0.08 0.118 0.148 0.356 0.47 0.193 CAGR (%) -9.468-100 -30.309-3.5.099-1.47 7.67-1.836 17.79 8.38 The above Exhibit depicts that Binani reported the highest mean in terms of Long-Term Debt / Asset ratio indicating high leverage Ratio followed by JK Cements. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Long-Term Debt / Total Assets of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Long-Term Debt / Total Assets of Cement Firms differ over years) EXHIBIT 14: LONG TERM DEBT / TOTAL ASSETS: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 0.969 0.16 0.001 ACC 6 0.050 0.008 0.000 AMBUJA CEMENT 6 0.015 0.00 0.000 SHREE CEMENT 6 0.453 0.075 0.00 INDIA CEMENT 6 1.333 0. 0.000 PRISM CEMENT 6 1.73 0.87 0.001 BINANI CEMENT 6 3.597 0.600 0.008 RAMCO CEMENT 6 1.159 0.193 0.005 BIRLA CORP 6 1.353 0.6 0.009 JK CEMENT 6.15 0.359 0.005 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 1.707 9 0.190 59.803 1.1566E-3.073351 Within Groups 0.159 50 0.003 Total 1.866 59 Above analysis shows that the F value (59.803) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Long-Term Debt / Total Assets of Cement Firms differs over the years. Current Ratio: It measures the Liquidity of a firm and plays a significant role in management of Working Capital EXHIBIT 15: CURRENT RATIO Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 1.35 1.33 1.53 1.3 0.54 0.91 0.59 0.69.46 1.45 01-13 1.17 1.40 1.81 1.35 0.63 0.87 0.48 0.78 0. 1.19 013-14 1.45 1.0 1.94 1.60 0.64 0.94 0.40 0.7.58 1.15 014-15 0.8 0.97 1.91 1.44 0.64 0.97 0.55 0.71 4.09 4.09 015-16 0.91 0.90.0 1.56 0.59 0.98 0.53 0.66.86.86 016-17 1.60 1 1.08 1.65 0.80 0.76 0.53 0.70 1.59 1.59 Mean 1. 1.13 1.71 1.49 0.64 0.91 0.51 0.71.30.06 SD 0.31 0.1 0.35 0.14 0.09 0.08 0.07 0.04 1.30 1.18 COV 0.5 0.18 0.1 0.09 0.14 0.09 0.13 0.06 0.56 0.57 CAGR (%) 3.38-5.44-6.77 4.53 8.15-3.64 -.0 0.39-8.30 1.87 67

The above Exhibit depicts that Birla Corp reported the highest mean in terms of Current Ratio followed by JK Cements. India Cements reported the highest CAGR of 8.15%. ACC, Ambuja, Prism, Binani Cements & Birla Corp reported a Negative CAGR, indicating that Current Ratio have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Current Ratio of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Current Ratio of Cement Firms differ over years) EXHIBIT 16: CURRENT RATIO: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 7.307 1.18 0.096 ACC 6 6.800 1.133 0.04 AMBUJA CEMENT 6 10.83 1.714 0.15 SHREE CEMENT 6 8.917 1.486 0.019 INDIA CEMENT 6 3.84 0.640 0.008 PRISM CEMENT 6 5.431 0.905 0.007 BINANI CEMENT 6 3.081 0.514 0.004 RAMCO CEMENT 6 4.50 0.708 0.00 BIRLA CORP 6 13.804.301 1.685 JK CEMENT 6 1.333.055 1.384 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 0.169 9.41 6.648 3.4677E-06.073351 Within Groups 16.856 50 0.337 Total 37.05 59 Above analysis shows that the F value (6.648) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Current Ratio of Cement Firms differs over the years Shares Outstanding: It depicts the total number of shares issued by the companies which are fully paid up. EXHIBIT 17: SHARES OUTSTANDING (MILLIONS) Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 74 189 155 348 307 503 96 4 77 699 01-13 74 189 155 348 307 503 96 4 77 699 013-14 74 189 155 348 307 503 96 4 77 699 014-15 74 189 155 348 307 503 314 4 77 699 015-16 74 189 155 348 307 503 314 4 77 699 016-17 74 189 199 348 307 503 314 4 77 699 Mean 74 189 16 348 307 503 305 4 77 699 SD 0 0 17.96 0 0 0 9.86 0 0 0 COV 0 0 0.11 0 0 0 0.03 0 0 0 CAGR (%) 0 0 5.1 0 0 0 1.19 0 0 0 The above Exhibit depicts that there have been no change in the number of Eq Shares for Ultratech, ACC, Shree, India, Prism, Ramco, Birla Corp & J K Cements over the years. Ambuja reported the highest CAGR of 5.1% followed by Binani of 1.19% 68

3. Operating Efficiency Operating Margin Asset Turnover Operating Margin: It is an important margin ratio which indicates the Operating Profit as a percentage of Net Revenue. EXHIBIT 18: OPERATING MARGIN % Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 17.1 15.65 0.59 15.65 14.7 3.4 5.54.1 17.45 16.84 01-13 18.15 13.70 0.7 3.48 1.33 3.00 6.44 0.01 15.99 16.44 013-14 15.9 11.90 17.18 16.04 3.33 3.4 0.47 8.66 7.89 9.59 014-15 14.70 10.4 18.5 8.08 9.53 5.10-1.78 15.14 9.07 11.0 015-16 15.0 7.04 13.48.71 10.90 5.84.7 3.64 8.67 10.53 016-17 15.64 7.83 10.63 19.70 10.78 5.15 3.91 4.4 11.66 14.30 Mean 16.14 11.06 16.78 17.61 10.7 4.9.81 18.99 11.79 13.1 SD 1.30 3.35 3.97 5.69 3.83 1.1 3.1 6.03 4.05 3.16 COV 0.081 0.303 0.36 0.33 0.373 0.8 1.111 0.318 0.344 0.41 CAGR (%) -1.889-1.938-1.391 4.705-6.055 8.535-6.713 1.770-7.74-3.11 The above Exhibit depicts that Ramco reported the highest mean in terms of Operating Profit Margin followed by Shree & Ambuja Cements. Prism Cements reported the highest CAGR of 8.535%. Ultratech, ACC, Ambuja, India, Binani, Birla Corp & JK Cements reported a Negative CAGR, indicating that Operating Profit Margin have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Operating Margin of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Operating Margin of Cement Firms differ over years) EXHIBIT 19: OPERATING MARGIN %: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 96.87 16.138 1.689 ACC 6 66.357 11.060 11.06 AMBUJA CEMENT 6 100.676 16.779 15.77 SHREE CEMENT 6 105.65 17.609 3.381 INDIA CEMENT 6 61.596 10.66 14.680 PRISM CEMENT 6 5.756 4.93 1.466 BINANI CEMENT 6 16.847.808 9.79 RAMCO CEMENT 6 113.911 18.985 36.403 BIRLA CORP 6 70.78 11.788 16.416 JK CEMENT 6 78.719 13.10 9.963 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 1,610.949 9 178.994 11.960 8.65605E-10.073351 Within Groups 748.305 50 14.966 Total,359.54 59 Above analysis shows that the F value (11.96) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Operating Margin of Cement Firms differs over the years Asset Turnover: It is an important turnover ratio which reflects the quality of the Assets and its impact on Revenue generation. 69

EXHIBIT 0: ASSET TURNOVER Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 0.77 0.86 0.74 1.6 0.53 1.13 0.45 0.53 0.56 0.71 01-13 0.71 0.95 0.79 0.84 0.56 1.04 0.69 0.59 0.57 0.7 013-14 0.67 0.9 0.70 0.81 0.56 1.07 0.68 0.54 0.6 0.48 014-15 0.63 0.93 0.7 0.75 0.47 1.15 0.56 0.53 0.63 0.49 015-16 0.61 0.9 0.66 0.58 0.5 1.04 0.48 0.5 0.6 0.50 016-17 0.60 0.83 0.61 0.75 0.54 1.03 0.50 0.56 0.45 0.58 Mean 0.66 0.90 0.70 0.83 0.53 1.08 0.56 0.54 0.58 0.58 SD 0.07 0.05 0.06 0.3 0.03 0.05 0.10 0.03 0.07 0.11 COV 0.098 0.050 0.085 0.71 0.064 0.045 0.183 0.051 0.119 0.19 CAGR (%) -4.736-0.578-3.565-9.684 0.068-1.791 1.796 1.067-4.394-3.996 The above Exhibit depicts that Prism reported the highest mean in terms of Asset Turnover followed by ACC, Shree Cements. Binani reported the highest CAGR of 1.796%. Ultratech, ACC, Ambuja, Shree, Prism, Birla Corp & JK Cements reported a Negative CAGR, indicating that the Asset Turnover have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Asset Turnover of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Asset Turnover of Cement Firms differ over years) EXHIBIT 1: ASSET TURNOVER: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 3.986 0.664 0.004 ACC 6 5.414 0.90 0.00 AMBUJA CEMENT 6 4. 0.704 0.004 SHREE CEMENT 6 5.001 0.833 0.051 INDIA CEMENT 6 3.171 0.59 0.001 PRISM CEMENT 6 6.458 1.076 0.00 BINANI CEMENT 6 3.359 0.560 0.010 RAMCO CEMENT 6 3.66 0.544 0.001 BIRLA CORP 6 3.456 0.576 0.005 JK CEMENT 6 3.483 0.581 0.01 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 1.87 9 0.03 1.879 1.9441E-14.073351 Within Groups 0.464 50 0.009 Total.91 59 Above analysis shows that the F value (1.879) is more than the table value (.073351) so, null hypothesis is rejected. Therefore it is concluded that Asset Turnover of Cement Firms differs over the years. Piotroski Score: Joseph Piotroski devised a methodology based on nine parameters to assess the overall financial strength of a Company. The points obtained from Profitability, Margin, Liquidity & Leverage are then added up to determine the best value stocks. 70

EXHIBIT : PIOTROSKI SCORE: ULTRATECH CEMENT Year 01 013 014 015 016 017 Net Income (ML) 190775 11561 14433 40558 5153 53749 Total Assets (ML) 49037 95898 31940 383678 41033 4187 Return on Assets 76.6% 1 71.5% 1 66.6% 1 6.7% 1 61.0% 1 60.1% 1 0 0 0 0 0 Operating Cash Flow (ML) 33833 36379 34545 4190 4555 49935 Operating CF/ Total Assets 13.59% 1 1.9% 1 10.73% 1 10.9% 1 10.98% 1 11.83% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 48433 51691 6008 53798 48966 63708 Long-term Debt/ Total Assets 19.45% 17.47% 1 18.70% 0 14.0% 1 11.88% 1 15.09% 0 Current Ratio 1.355 1.17 0 1.455 1 0.80 0 0.907 1 1.600 1 Operating Margin % 17.1% 18.15% 1 15.9% 0 14.70% 0 15.0% 1 15.64% 1 Shares Outstanding (ML) 74 74 1 74 1 74 1 74 1 74 1 Asset Turnover (Average) 0.766 0.715 0 0.666 0 0.67 0 0.610 0 0.601 0 Piotroski Score 5/9 4/9 4/9 6/9 5/9 Piotroski Score (%).56.44.44.67.56 The above Exhibit depicts that Ultratech Cement s Piotroski Score have decreased from 5/9 to 4/9 for both 013-14 & 014-15, which have again increased to 6/9 in between 015-16 and finally decreased to 5/9 016-17. EXHIBIT 3: PIOTROSKI SCORE: ACC Year 01 013 014 015 016 017 Net Income (ML) 1037 11358 111501 117388 11797 111676 Total Assets (ML) 11910 1198 11011 16816 18000 133865 Return on Assets 85.9% 1 95.% 1 9.1% 1 9.6% 1 9.% 1 83.4% 1 1 0 1 0 0 Operating CF (ML) 15760 15769 10634 135 14566 13905 Operating CF/ Total Assets 13.% 1 13.% 1 8.79% 1 10.66% 1 11.38% 1 10.39% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 5061 850 0 0 0 0 LTD/ TA 4.5% 0.71% 1 0% 100% 0% 0% 0% 0% 0% 0 Current Ratio 1.387 1.396 1 1.05 0 0.967 0 0.899 0 1.0046 1 Operating Margin % 15.65% 13.7% 0 11.9% 0 10.4% 0 7.04% 0 7.83% 1 Shares Outstanding (ML) 189 189 1 189 1 189 1 189 1 189 1 Asset Turnover (Average) 0.8588 0.95 1 0.914 0 0.957 1 0.917 0 0.834 0 Piotroski Score 7/9 4/9 5/9 3/9 5/9 Piotroski Score (%).78.44.56.33.56 The above Exhibit depicts that ACC s Piotroski Score have decreased from 7/9 to 4/9 in 013-14 which have again increased to 5/9 in 014-15, again decreased to 3/9 in 015-16 & finally increased to 5/9 in between 016-17. EXHIBIT 4: PIOTROSKI SCORE: SHREE CEMENT Year 01 013 014 015 016 017 Net Income (ML) 58981 55903 58873 64536 55136 849 Total Assets (ML) 46951 6639 7685 85546 9463 111660 Return on Assets 15.6% 1 84.3% 1 81.0% 1 75.4% 1 58.3% 1 75.5% 1 0 0 0 0 1 Operating CF (ML) 1963 1597 14007 1385 15661 016 Operating CF/ Total Assets 41.03% 1 18.99% 1 19.7% 1 14.48% 1 16.55% 1 19.7% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 8177 4431 4467 4080 5307 5187 LTD/ TA 17.4% 6.68% 1 6.15% 1 4.77% 1 5.61% 0 4.65% 1 Current Ratio 1.3 1.349 1 1.603 1 1.435 0 1.557 1 1.650 1 Operating Margin % 15.65% 3.48% 1 16.04% 0 8.08% 0.71% 1 19.70% 0 Shares Outstanding (ML) 348 348 1 348 1 348 1 348 1 348 1 Asset Turnover (Average) 1.56 0.843 0 0.810 0 0.754 0 0.583 0 0.755 1 Piotroski Score 6/9 5/9 4/9 5/9 7/9 Piotroski Score (%).67.56.44.56.78 71

The above Exhibit depicts that Shree Cement s Piotroski Score have decreased from 6/9 to 5/9 in 013-14 which further decreased to 4/9 in 014-15, again increased to 5/9 in 015-16 & finally increased to 7/9 in between 016-17. EXHIBIT 5: PIOTROSKI SCORE: INDIA CEMENT Year 01 013 014 015 016 017 Net Income (ML) 46310 51595 50848 50604 55348 58609 Total Assets (ML) 86695 95 91317 10838 106915 109347 Return on Assets 53.4% 1 55.9% 1 55.7% 1 46.7% 1 51.8% 1 53.6% 1 1 0 0 1 1 Operating CF (ML) 9419 7318 5161 6451 9637 7565 Operating CF/ Total Assets 10.86% 1 7.93% 1 5.65% 1 5.95% 1 9.01% 1 6.9% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 17519 131 407 5068 165 4515 LTD/ TA 0.1% 3.1% 0 4.54% 0 3.14% 1 19.89% 1.4% 0 Current Ratio 0.54 0.67 1 0.637 1 0.640 1 0.595 0 0.80 1 Operating Margin % 14.7% 1.33% 0 3.33% 0 9.53% 1 10.90% 1 10.78% 0 Shares Outstanding (ML) 307 307 1 307 1 307 1 307 1 307 1 Asset Turnover (Average) 0.534 0.559 1 0.557 0 0.467 0 0.518 1 0.536 1 Piotroski Score 6/9 4/9 6/9 7/9 6/9 Piotroski Score (%).67.44.67.78.67 The above Exhibit depicts that India Cement s Piotroski Score have decreased from 6/9 to 4/9 in 013-14 which increased to 6/9 in 014-15, 7/9 in 015-16 & again decreased to 6/9 in between 016-17. EXHIBIT 6: PIOTROSKI SCORE: PRISM CEMENT Year 01 013 014 015 016 017 Net Income (ML) 45498 4773 49616 55840 531 50113 Total Assets (ML) 40439 45754 460 48701 50131 48753 Return on Assets 11.5% 1 104.3% 1 107.4% 1 114.7% 1 104.% 1 10.8% 1 0 1 1 0 0 Operating CF (ML) 667 599 566 1986 461 6756 Operating CF/ Total Assets 6.59% 1 5.68% 1 1.3% 1 4.08% 1 9.% 1 13.86% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 10631 1480 14478 16340 14769 11900 LTD/ TA 6.9% 7.8% 0 31.34% 0 33.55% 0 9.46% 1 4.41% 1 Current Ratio 0.914 0.867 0 0.943 1 0.970 1 0.978 1 0.759 0 Operating Margin % 3.4% 3.00% 0 3.4% 1 5.10% 1 5.84% 1 5.15% 0 Shares Outstanding (ML) 503 503 1 503 1 503 1 503 1 503 1 Asset Turnover (Average) 1.15 1.043 0 1.074 1 1.147 1 1.04 0 1.08 0 Piotroski Score 3/9 7/9 7/9 6/9 4/9 Piotroski Score (%).33.78.78.67.44 The above Exhibit depicts that Prism Cement s Piotroski Score have increased from 3/9 in 013-14 to 7/9 in both 014-15 & 015-16, again decreased to 6/9 in between 015-16 and finally decreased to 4/9 in 016-17. EXHIBIT 7: PIOTROSKI SCORE: BINANI CEMENT Year 01 013 014 015 016 017 Net Income (ML) 30694 44811 47356 4331 37844 36660 Total Assets (ML) 67506 6510 69676 7703 79047 73760 Return on Assets 45.5% 1 68.8% 1 68.0% 1 56.1% 1 47.9% 1 49.7% 1 1 0 0 0 1 Operating CF (ML) 513 5844 14-45 3400 3597 Operating CF/ Total Assets 7.7% 1 8.97% 1 3.07% 1-0.55% 0 4.30% 1 4.88% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 34451 33943 38194 48667 5149 54475 LTD/ TA 51.03% 5.1% 0 54.8% 0 63.04% 0 64.83% 0 73.85% 0 Current Ratio 0.590 0.478 0 0.40 0 0.554 1 0.55 0 0.533 1 Operating Margin % 5.54% 6.44% 1 0.47% 0-1.78% 0.7% 1 3.91% 1 Shares Outstanding (ML) 96 96 1 96 1 314 0 314 1 314 1 Asset Turnover (Average) 0.455 0.688 1 0.680 0 0.561 0 0.479 0 0.497 1 Piotroski Score 6/9 3/9 /9 4/9 7/9 Piotroski Score (%).67.33..44.78 7

The above Exhibit depicts that Binani Cement s Piotroski Score have decreased from 6/9 to 3/9 in 013-14 which further decreased to /9 in 014-15 then increased gradually to 4/9 in 015-16 & 7/9 in between 016-17. EXHIBIT 8: PIOTROSKI SCORE: RAMCO CEMENT Year 01 013 014 015 016 017 Net Income (ML) 336 38308 36835 36554 35818 39673 Total Assets (ML) 6058 64714 68455 69398 69443 70705 Return on Assets 53.% 1 59.% 1 53.8% 1 5.7% 1 51.6% 1 56.1% 1 1 0 0 0 1 Operating CF (ML) 8638 7014 5086 9316 10888 11174 Operating CF/ Total Assets 14.6% 1 10.84% 1 7.43% 1 13.4% 1 15.68% 1 15.80% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 15008 13931 1504 1759 10595 5110 LTD/ TA 4.77% 1.53% 1.1% 0 4.87% 0 15.6% 1 7.3% 1 Current Ratio 0.688 0.776 1 0.715 0 0.71 0 0.656 0 0.70 1 Operating Margin %.1% 0.01% 0 8.66% 0 15.14% 1 3.64% 1 4.4% 1 Shares Outstanding (ML) 4 4 1 4 1 4 1 4 1 4 1 Asset Turnover (Average) 0.53 0.59 1 0.538 0 0.57 0 0.516 0 0.561 1 Piotroski Score 7/9 3/9 4/9 5/9 8/9 Piotroski Score (%).78.33.44.56.89 The above Exhibit depicts that Ramco Cement s Piotroski Score have decreased from 7/9 to 3/9 in 013-14, since then it have increased over the years and finally reached 8/9 in between 016-17. EXHIBIT 9: PIOTROSKI SCORE: BIRLA CORP Year 01 013 014 015 016 017 Net Income (ML) 869 6030 30164 3099 368 43477 Total Assets (ML) 40747 4593 4885 51017 593 96978 Return on Assets 56.1% 1 57.5% 1 61.8% 1 6.9% 1 6.5% 1 44.8% 1 1 1 1 0 0 Operating CF (ML) 450 1964 3588 818 487 6773 Operating CF/ Total Assets 6.01% 1 4.34% 1 7.35% 1 5.5% 1 4.76% 1 6.98% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 75 8974 9163 10934 7897 40491 LTD/ TA 18.46% 19.81% 0 18.77% 1 1.43% 0 15.10% 1 41.75% 0 Current Ratio.459 0. 0.58 1 4.087 1.860 0 1.595 0 Operating Margin % 17.45% 15.99% 0 7.89% 0 9.07% 1 8.67% 0 11.66% 1 Shares Outstanding (ML) 77 77 1 77 1 77 1 77 1 77 1 Asset Turnover (Average) 0.561 0.575 1 0.618 1 0.69 1 0.65 0 0.448 0 Piotroski Score 5/9 7/9 7/9 4/9 4/9 Piotroski Score (%).56.78.78.44.44 The above Exhibit depicts that Birla Corp s Piotroski Score have increased from 5/9 in 013-14 to 7/9 in both 014-15 & 015-16, again decreased to 4/9 in both 015-16 & 016-17. EXHIBIT 30: PIOTROSKI SCORE: J K CEMENTS Year 01 013 014 015 016 017 Net Income (ML) 5378 9040 7815 33874 37855 4063 Total Assets (ML) 35760 40078 57633 69838 75319 70185 Return on Assets 71.0% 1 7.5% 1 48.3% 1 48.5% 1 50.3% 1 57.9% 1 1 0 1 1 1 Operating CF (ML) 5198 380 3643 56 5800 7595 Operating CF/ Total Assets 14.54% 1 9.53% 1 6.3% 1 3.67% 1 7.70% 1 10.8% 1 Cash Flow Return on Assets 0 0 0 0 0 0 Long-Term Debt 9967 10595 4415 735 8711 906 LTD/ TA 7.87% 6.44% 1 4.36% 0 39.00% 1 38.1% 1 41.41% 0 Current Ratio 1.453 1.190 0 1.148 0 4.087 1.860 0 1.595 0 Operating Margin % 16.84% 16.44% 0 9.59% 0 11.0% 1 10.53% 0 14.30% 1 Shares Outstanding (ML) 699 699 1 699 1 699 1 699 1 699 1 Asset Turnover (Average) 0.710 0.75 1 0.483 0 0.485 1 0.503 1 0.579 1 Piotroski Score 6/9 3/9 8/9 6/9 6/9 Piotroski Score (%).67.33.89.67.67 73

The above Exhibit depicts that J K Cement s Piotroski Score have decreased from 6/9 to 3/9 in 013-14 which increased to 8/9 in 014-15, again decreased and have been 6/9 in both 015-16 & 016-17. EXHIBIT 31: PIOTROSKI SCORE: CEMENT FIRMS Year Ultratech ACC Ambuja Shree India Prism Binani Ramco Birla Corp JK 011-1 0.667 0.667 0.667 0.667 0.667 0.667 0.667 0.667 0.667 0.667 01-13 0.556 0.778 0.778 0.667 0.667 0.333 0.667 0.778 0.556 0.667 013-14 0.444 0.444 0.556 0.556 0.444 0.778 0.333 0.333 0.778 0.333 014-15 0.444 0.556 0.778 0.444 0.667 0.778 0. 0.444 0.778 0.889 015-16 0.667 0.333 0.556 0.556 0.778 0.667 0.444 0.556 0.444 0.667 016-17 0.556 0.556 0.333 0.778 0.667 0.444 0.778 0.889 0.444 0.667 Mean 0.556 0.556 0.611 0.611 0.648 0.611 0.519 0.611 0.611 0.648 SD 0.099 0.157 0.169 0.117 0.109 0.183 0.18 0.08 0.153 0.178 COV 0.179 0.83 0.76 0.191 0.169 0.99 0.41 0.340 0.51 0.75 CAGR (%) -3.581-3.581-1.945 3.131 0.000-7.789 3.131 5.9-7.789 0.000 The above Exhibit depicts that both India & J K Cements reported the highest mean in terms of Piotroski Score followed by Ambuja, Shree, Prism, Ramco Cements and Birla Corp. Ramco Cements reported the highest CAGR of 5.9%. Ultratech, ACC, Ambuja, Prism & Birla Corp reported a Negative CAGR, indicating that Piotroski Score have declined over the years. Hypothesis: =µ =µ 3 =µ 4 =µ 5 =µ 6 =µ 7 =µ 8 =µ 9 =µ 10 (Piotroski Score of Cement Firms doesn t differ over years) µ µ 3 µ 4 µ 5 µ 6 µ 7 µ 8 µ 9 µ 10 (Piotroski Score of Cement Firms differ over years) EXHIBIT 3: PIOTROSKI SCORE: CEMENT FIRMS: ANOVA ANOVA: Single Factor Groups Count Sum Average Variance ULTRATECH CEMENT 6 3.33 0.56 0.009877 ACC 6 3.33 0.56 0.04691 AMBUJA CEMENT 6 3.67 0.61 0.08395 SHREE CEMENT 6 3.67 0.61 0.013580 INDIA CEMENT 6 3.89 0.65 0.011934 PRISM CEMENT 6 3.67 0.61 0.033333 BINANI CEMENT 6 3.11 0.5 0.047737 RAMCO CEMENT 6 3.67 0.61 0.04310 BIRLA CORP 6 3.67 0.61 0.03457 JK CEMENT 6 3.89 0.65 0.031687 ANOVA: VARIATION Source of Variation SS df MS F P-value F crit Between Groups 0.09 9 0.0105 0.39341 0.936150006.073351 Within Groups 1.34 50 0.068 Total 1.43 59 Above analysis shows that the F value (0.39341) is less than the table value (.073351) so, null hypothesis is accepted. Therefore it is concluded that Piotroski Score of Cement Firms does not differ over the years T-Test: It is used to determine the difference between two sample means from two normally distributed populations with unknown variances. It uses small sample size in order to test the difference between the samples when two normal distributions are unknown. If t Stat value lies between - t Critical two tail and + t Critical two test we don t reject Null Hypothesis. Piotroski Score is used to assess financial strength of a company. This Score helps to determine is used the value stocks. An analyse have been done by conducting T Test to show the effect of Operating CF/ Total Assets, Asset Turnover Ratio, Leverage, Current Ratio & Operating Margin on P/E ratio. 74

EXHIBIT 33: T-TEST: Two-Sample Assuming Unequal Variances: ULTRATECH CEMENT Operating CF/TA LTD/ TA MV E / BV E ROE F SCORE P/E Mean 0.11735 0.161550 3.777650 0.137176 0.555556 9.60411 Variance 0.00010 0.000856 0.4411 0.00157 0.009877 99.537531 Observations 6 6 6 6 6 6 Hypothesized Mean Difference 0 0 0 0 0 df 5 5 5 5 5 t Stat -7.395600-7.8653-6.333108-7.3463-7.131595 P(T<=t) one-tail 0.000395 0.000395 0.000739 0.0003937 0.000407 t Critical one-tail.0150484.0150484.0150484.0150484.0150484 P(T<=t) two-tail 0.0007849 0.0007904 0.0014477 0.0007874 0.0008413 t Critical two-tail.5705818.5705818.5705818.5705818.5705818 OPERATING CASH FLOW/TOTAL ASSETS & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between Operating Cash Flow/Total Assets & P/E, Variance is not Equal) µ (There is significant no relationship between Operating Cash Flow/Total Assets & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances LONG TERM DEBT/ TOTAL ASSETS & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between Long Term Debt/Total Asset & P/E, Variance is not Equal) µ (There is significant no relationship between Long Term Debt/Total Asset & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances MV E / BV E & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between MV E / BV E & P/E, Variance is not Equal) µ (There is significant no relationship between MV E / BV E & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances ROE & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between ROE & P/E, Variance is not Equal) µ (There is significant no relationship between ROE & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances F SCORE & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between F Score & P/E, Variance is not Equal) µ (There is significant no relationship between F Score & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances EXHIBIT 34: T-TEST: Two-Sample Assuming Unequal Variances: ACC Operating CF/TA LTD/ TA MV E / BV E ROE F SCORE P/E Mean 0.11735 0.008636 3.3016 0.13830 0.555556 1.1769 Variance 0.00010 0.000887 0.08606 0.0016 0.04691 119.119 Observations 6 6 6 6 6 6 Hypothesized Mean Difference 0 0 0 0 0 df 5 5 5 5 5 t Stat -7.395600 -.719951-1.975954 -.693995 -.596857 P(T<=t) one-tail 0.000395 0.008887 0.05560 0.01546 0.04166 t Critical one-tail.0150484.0150484.0150484.0150484.0150484 P(T<=t) two-tail 0.0007849 0.0417774 0.105105 0.043093 0.048433 t Critical two-tail.5705818.5705818.5705818.5705818.5705818 OPERATING CASH FLOW/TOTAL ASSETS & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between Operating Cash Flow/Total Assets & P/E, Variance is not Equal) µ (There is significant no relationship between Operating Cash Flow/Total Assets & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances LONG TERM DEBT/ TOTAL ASSETS & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between Long Term Debt/Total Asset & P/E, Variance is not Equal) µ (There is significant no relationship between Long Term Debt/Total Asset & P/E, Variance is Equal) 75

Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances MV E / BV E & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between MV E / BV E & P/E, Variance is not Equal) µ (There is significant no relationship between MV E / BV E & P/E, Variance is Equal) Here t Stat value lies between -.5705818 & +.5705818. Therefore, we reject Null Hypothesis stating that variances are equal. ROE & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between ROE & P/E, Variance is not Equal) µ (There is significant no relationship between ROE & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances F SCORE & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between F Score & P/E, Variance is not Equal) µ (There is significant no relationship between F Score & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances EXHIBIT 35: T-TEST: Two-Sample Assuming Unequal Variances: AMBUJA Operating CF/TA LTD/ TA MV E / BV E ROE F SCORE P/E Mean 0.11676 0.00469 0.35097 0.104 0.611111 8.53605 Variance 0.000551 0.00000 0.00604 0.001337 0.08395 80.3544 Observations 6 6 6 6 6 6 Hypothesized Mean Difference 0 0 0 0 0 df 5 5 5 5 5 t Stat -7.765868-7.796993-7.708707-7.76410-7.6939 P(T<=t) one-tail 0.00083 0.000780 0.000931 0.000835 0.0003076 t Critical one-tail.0150484.0150484.0150484.0150484.0150484 P(T<=t) two-tail 0.0005664 0.0005559 0.0005863 0.0005670 0.0006153 t Critical two-tail.5705818.5705818.5705818.5705818.5705818 OPERATING CASH FLOW/TOTAL ASSETS & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between Operating Cash Flow/Total Assets & P/E, Variance is not Equal) µ (There is significant no relationship between Operating Cash Flow/Total Assets & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances LONG TERM DEBT/ TOTAL ASSETS & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between Long Term Debt/Total Asset & P/E, Variance is not Equal) µ (There is significant no relationship between Long Term Debt/Total Asset & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances MV E / BV E & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between MV E / BV E & P/E, Variance is not Equal) µ (There is significant no relationship between MV E / BV E & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances ROE & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between ROE & P/E, Variance is not Equal) µ (There is significant no relationship between ROE & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances F SCORE & PRICE-EARNINGS (P/E) RATIO = µ (There is significant relationship between F Score & P/E, Variance is not Equal) µ (There is significant no relationship between F Score & P/E, Variance is Equal) Here the t Stat value do not lie between -.5705818 & +.5705818. Therefore, we accept Null Hypothesis stating that the variances 76