UltraTech Cement (ULTCEM) 2873

Company Update Rating matrix Rating : Buy Target : 36 Target Period : 9-12 months Potential Upside : 25% What s changed? Target Price EPS FY16E* EPS FY17E* Rating *We have not incorporated Jaypee financials Key financials Unchanged Unchanged Unchanged Unchanged Crore FY14* FY15* FY16E* FY17E* Net Sales 277.9 22651.5 24171.5 26376.7 EBITDA 3616. 3915.3 451.1 5198.1 Net Profit 2144.5 214.7 2254.8 2756.7 EPS ( ) 78.2 73.4 82.2 1.5 * Does not include Jaypee financials as the deal will take 12-15 months to materialise Valuation summary FY14* FY15* FY16E* FY17E* PE (x) 36.7 39.1 35. 28.6 EV to EBITDA (x) 22. 21.1 18.4 15.9 EV/Tonne(US$) 234 217 24 181 Price to book (x) 4.6 4.1 3.8 3.4 RoNW (%) 12.5 1.6 1.8 11.9 RoCE (%) 11.7 1.9 11.6 12.9 Stock data Particular Amount Mcap 78835 crore Debt (FY15) 7574 crore Cash & Invest (FY15) 2916 crore EV 83493 crore 52 week H/L 3399 / 253 Equity cap 274.2 crore Face value 1 Price performance 1M 3M 6M 12M ACC -4.3-12.2-12.5-27.4 Ambuja Cement -4. -7. -4.6-27.2 Shree Cement 3.2-8.5. -5.9 UltraTech Cement.7-1.1-4.6-6.9 Research Analyst Rashesh Shah rashes.shah@icicisecurities.com Devang Bhatt devang.bhatt@icicisecurities.com In a league of its own... March 1, 216 UltraTech Cement (ULTCEM) 2873 UltraTech Cement (UltraTech) has entered into a binding MoU for acquisition of 22.4 MT cement assets of Jaiprakash Associates (Jaypee). This move will increase its capacity by 33% to 9.7 MT (from the current 68.3 MT), making it the largest cement player in the domestic market (fourth largest player globally) with a market share of over 22%. The assets to be acquired include 22.4 MT cement capacity along with 325 MW captive power plant for 16,97 crore, which works out to US$11/tonne. However, if we consider a US$1-11/tonne valuation for 6 MT plant in south operating at 55% utilisation (due to overcapacity in the region) and 47 crore for 4 MT under construction grinding unit, the valuation for remaining assets works out to US$14-145/tonne, which, we believe is fairly valued and in line with current replacement cost. The transaction is subject to various regulatory approvals and amendments in MMDR regulations resulting in a gestation period of 12-15 months. The deal will be positive for the company considering synergy benefits, access to newer markets and reasonable valuation. Hence, we remain positive on the company and maintain our BUY recommendation. Acquisition to further strengthen leadership; provide access to new clusters The acquisition of Jaypee will increase UltraTech s market share from 16% to 22%, making it the largest cement player in the domestic market. Jaypee s cement assets are spread across regions viz. 1) central region (11.4 MT), 2) north (4.8 MT), 3) south (6MT). The 12 plant locations of Jaypee complement the existing 4 location of UltraTech. The acquisition is expected to give UltraTech access to newer markets of Satna (11.4 MT) and coastal Andhra Pradesh (5. MT). Post the acquisition, UltraTech s capacity share in central & north is expected to increase from 9% & 14% to 29% & 19%, respectively, making UltraTech the dominant player in these regions. Considering the high entry barriers for organic expansion, the current acquisition of Jaypee (given the substantial capacity, 4 years of limestone reserves and complementary markets) makes it a strategic fit for the company. Long term value accretive In the long term we expect the deal to be value accretive mainly led by improvement in operational performance, logistic synergies, procurement synergy (bulk procurement of raw materials), higher usage of pet coke and more importantly UltraTech s brand advantage. Well positioned to reap benefits of demand recovery; maintain BUY With the proposed acquisition of Jaypee, UltraTech will become the fourth largest cement player globally (in capacity terms). From a long term perspective the deal is expected to be earnings accretive for the company led by synergy benefits. Further, with this deal, UltraTech will have a presence across regions (except NE) enabling it to reap the benefits of a demand recovery led by higher government spends on infra and revival in housing demand. With industry-leading growth (on the back of consistent capacity addition), higher margins and healthy cash flows, we maintain our positive view with a target price of 3,6/share (i.e. at 2.x FY17E EV/EBITDA) and BUY rating on the stock. ICICI Securities Ltd Retail Equity Research

Exhibit 1: Plant wise capacity of Jaiprakash Associate Capacity (mt) Particulars Location Plant type Clinker Cement 1 Dalla Integrated Unit 2.1.5 2 JP super (under commissioning) Clinker 2.3 3 Tanda Grinding unit 1. 4 Sikanderabad Grinding unit 1. 5 Bara (under commisioning) Grinding unit 4. 6 Bela Integrated Unit 2.1 2.6 7 Sidhi Integrated Unit 3.1 2.3 Satna cluster 9.6 11.4 8 Baga Integrated Unit 3.3 1.7 9 Bagheri Grinding unit 2. 1 Roorkee Grinding unit 1.1 HP cluster 3.3 4.8 11 Balaji Integrated Unit 3.3 5. 12 Shahabad Grinding unit 1.2 South cluster 3.3 6.2 Total 16.2 22.4 Exhibit 2: UltraTech s zonal presence post acquisition Region Pre-acquistion Organic expansion Jaypee's plants Postacquistion As a % of domestic capacity North 19. 4.8 23.8 26.8 Satna. 11.4 11.4 12.9 East 9.8 1.6. 11.4 12.9 West 2.4. 2.4 23. South 15.5 6.2 21.7 24.5 All India 64.7 22.4 88.7 1. Overseas 3.6. 3.6 Total 68.3 22.4 92.3 Source: Company, ICICIdirect.com, Research Source: Company, ICICIdirect.com, Research Exhibit 3: Global positioning post proposed acquisition (in mt) 45 4 35 3 25 2 15 1 5 39 Lafarge Holcim 2 Heidelberg Italcementi 94 92.3 65 Cemex Ultratech* CRH, * includes 1.6 MT grinding unit in Bihar to be commissioned in Mar-16 Company to strengthen its presence across major clusters post acquisition The company is expected to gain access to newer markets of Satna and coastal Andhra Pradesh (AP). The Satna cluster has been growing at a CAGR of 7% in the past five years and has low per capita consumption of 14 kg, representing huge potential for growth. The region has eight players with a total capacity of 38 MT and utilisation of 8%. The AP region is poised for growth led by development of new capital city Amravathi and is expected to register ~1% CAGR in the next five years. capacity utilisation is expected to increase from 71% to 85% in the next five years. The acquisition of HP assets is expected to provide synergy benefits in terms of reduced logistic cost led by lower lead distance. Further, high infra spending and increased housing demand is expected to drive cement demand in the region. ICICI Securities Ltd Retail Equity Research Page 2

Company Analysis Largest pan-india player in cement Industry UltraTech Cement is the largest player in capacity terms (~68.3 MT) with a market share of over ~16% in India. The company has consistently remained ahead of its peers in terms of capacity expansion with a CAGR of 23% vs. peer s CAGR of 13% in the past five years. In Q2FY16, UltraTech commissioned the 1.6 MT grinding unit at Jhajjar, Haryana and 1.6 MT grinding unit at Dankuni, West Bengal. The management has also indicated that the Bihar and Maharashtra grinding unit (1.6 MT each) is expected to be commissioned by March 216. Further, the ongoing organic, inorganic expansion is expected to help the company cement its leadership position, going forward. Demand expected to revive in FY17 UltraTech derives majority of its revenue across India and is well distributed indicating lower volatility in blended realisation, going forward. The company has indicated some green shoots of recovery in demand from bigticket infra projects in north. Further, in the east, sustained infra spending in Odisha, Bihar and Chhattisgarh are expected to continue to drive volume growth in Q4FY16 and FY17. In the south, the company expects demand from Seemandhra and Telangana to pick up in FY17. Operates at healthy EBITDA/tonne vis-à-vis industry With lower lead distances due to a pan-india presence, captive power plants and higher sales realisations due to a higher trade mix coupled with higher white cement sales realisation, the company generates highest EBITDA/tonne in the industry. It has also been able to reduce its power consumption per tonne gradually through various initiatives. Power requirement of ~8% is met through captive power plants, helping the company reduce per tonne cost. Other than this, the company has also increased pet coke consumption, helping it to reduce power cost. Further, commissioning of various grinding units is expected to reduce freight cost/tonne. Exhibit 4: Gradual reduction in power requirement Exhibit 5: Higher EBITDA/tonne vis-à-vis peer group 86 84 82 8 78 76 74 85.1 83.1 82. 81.3 81.1 79. FY9 FY1 FY11 FY12 FY13 FY14 EBITDA/tonne ( ) 1,2 1, 8 6 4 2-1,16 837 Q1FY14 74 548 Q2FY14 765 61 Q3FY14 914 787 Q4FY14 843 82 Q1FY15 775 718 Q2FY15 781 63 Q3FY15 1,13 845 Q4FY15 881 73 Q1FY16 834 74 Q2FY16 Kwh/T of cement Ultratech Industry Peer set includes ACC, Ambuja, Shree cement and India cement ICICI Securities Ltd Retail Equity Research Page 3

Expect revenue CAGR of 7.9% in FY15-17E We expect revenues to grow at a CAGR of 7.9% YoY over the next two years led by capacity expansion. We expect volume CAGR of 6.4% in FY15-17E. We expect the blended realisation to increase at a CAGR of 1.4% in FY15-17E. Exhibit 6: Volume to grow at CAGR of 6.4% during FY15-17E Exhibit 7: Realisation to pick up led by higher price realisation in south 7. 6. 5. 4. 3. 2. 1.. 41.6 41.7 42.6 45.6 48.4 51.7 FY12 FY13 FY14 FY15 FY16E FY17E 52 5 48 46 44 42 4 515 4963 4996 48 4713 4374 FY12 FY13 FY14 FY15 FY16E FY17E 2. 15. 1. 5.. -5. Sales Volumes Realisation ( /tonne) -LS Growth (%) -RS Exhibit 8: Robust volume growth led by capacity expansion Exhibit 9: Quarterly realisation trend Million Tonne 14 12 1 8 6 4 2 9.4 1. 12.5 12. 1.7 1.8 12.2 12.4 11.1 11.6 ( ) 55 525 5 475 45 425 482 4792 4662 4725 528 568 545 4866 553 4955 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Sales Volume Q1FY16 Q2FY16 Q3FY16 4 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Realisation Q4FY15 Q1FY16 Q2FY16 Q3FY16 ICICI Securities Ltd Retail Equity Research Page 4

Margins to improve led by operating efficiency Exhibit 1: Expect EBITDA/tonne of 16 in FY17E In Q3FY16, total cost/tonne declined 5.4% YoY led by lower energy cost. Going forward, cost/tonne is expected to come down further led by commissioning of various grinding units, WHRS, and increased use of pet coke. The full benefit of the recent decline in pet coke prices will be reflected in Q4FY16 and FY17. This, in turn, would help the company achieve margins over 2% by FY17E. Exhibit 11: Margins to improve led by improvement in realisations 12 1 8 6 4 2 713 962 184 849 858 932 16 3. 25. 2. 15. 19.2 22. 22.6 18. 17.3 18.7 19.7 1. FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY11 FY12 FY13 FY14 FY15 FY16E FY17E EBITDA/Tonne EBITDA Margin (%) Exhibit 12: Q3FY16 EBITDA per tonne improves due to lower energy cost Exhibit 13: Pick-up in margins expected, going forward per tonne 12 1 8 6 4 2 74 765 914 843 775 781 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 113 881 834 9 Q4FY15 Q1FY16 Q2FY16 Q3FY16 (%) 25 2 15 1 5 14.7 Q2FY14 19.6 16. Q3FY14 Q4FY14 17.8 Q1FY15 15.4 Q2FY15 15.4 2.1 Q3FY15 Q4FY15 16.5 18.1 Q1FY16 Q2FY16 Q3FY16 18.2 EBITDA Margin Expect net profit CAGR of 17.% in FY15-17E After witnessing a sharp decline in profit in FY15, we expect net margins to improve to 1.5% in FY17E, which is still lower than the average NPM of 13.3% in FY12. Exhibit 14: Profitability trend crore 3 25 2 15 1 5 2655.6 2446.2 1.6 2144.5 13.3 13.5 1.7 144. 214.7 8.9 2756.7 2254.8 1.5 9.3 16. 14. 12. 1. 8. 6. 4. 2.. (%) FY11 FY12 FY13 FY14 FY15 FY16E FY17E Net profit - LS Net profit margin -RS ICICI Securities Ltd Retail Equity Research Page 5

Outlook and valuation With the proposed acquisition of Jaypee, UltraTech will become the fourth largest cement player globally (in capacity terms). From a long term perspective the deal is expected to be earnings accretive for the company led by synergy benefits. Further, with this deal, UltraTech will have a presence across regions (except NE) enabling it to reap the benefits of a demand recovery led by higher government spends on infra and revival in housing demand. With industry-leading growth (on the back of consistent capacity additions), higher margins and healthy cash flows, we maintain our positive view with a target price of 3,6/share (i.e. at 2.x FY17E EV/EBITDA) and BUY rating on the stock. Exhibit 15: Key assumptions per tonne FY13 FY14 FY15 FY16E FY17E Sales Volume* 42 43 46 48 52 Net Realisation* 48 4713 4963 4996 515 Total Expenditure 3716 3864 415 464 499 Raw material 671 781 78 86 79 Power & Fuel 131 971 139 98 98 Freight 112 175 1182 1219 12 Employees 232 238 267 29 31 Others 771 799 836 842 9 EBITDA per Tonne 184 849 858 932 16 Source: ICICIdirect.com Research; * Blended (grey + white + clinker) Exhibit 16: Valuation Sales Growth EPS Growth PE EV/Tonne EV/EBITDA RoNW RoCE ( cr) (%) ( ) (%) (x) ($) (x) (%) (%) FY13 22.9.3 96.8-19.3 29.7 255 17.6 17.4 18.7 FY14 277.9.3 78.2-19.3 36.7 234 22. 12.5 11.7 FY15 22651.5 12.8 73.4-6.1 39.1 217 21.1 1.6 1.9 FY16E 24171.5 2.4 82.2 5.1 35. 24 18.4 1.8 11.6 FY17E 26376.7 16.4 1.5 36.8 28.6 181 15.9 11.9 12.9 ICICI Securities Ltd Retail Equity Research Page 6

Company snapshot 4,5 4, 3,5 Target price: 36 3, 2,5 2, 1,5 1, 5 Feb-1 May-1 Aug-1 Nov-1 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Event Jun-12 CCI publishes an order against several cement manufacturers including ACC Ltd and imposes a penalty of.5 times of the profit for the year 29-1 and 21-11. For UltraTech, the amount works out to 1175.49 crore Jul-12 Announces that the company has signed an agreement with the shareholders of Gotan Lime Stone Khanij Udyog Pvt Ltd (GKUPL), Rajasthan to acquire 1% equity shares of GKUPL. With this acquisition, GKUPL becomes a wholly-owned subsidiary of the company Sep-13 Announces that the company will acquire 4.8 MT of Gujarat Cement plant of Jaypee Cement. Other than this, ~ 1 MTPA capacity will be commissioned by FY15. Total cement capacity is expected to reach ~7 MTPA Jun-14 Company starts including Jaypee Cement operations in quarterly result from Q1FY15 Sep-14 Commissions 1.4 MT cement mill at Karnataka and 25 MW power plant at AP Dec-14 Board approves acquisition of cement business of Jaiprakash Associates in MP with capacity of 4.9 MT Aug-15 Commissions a bulk terminal with a capacity of 2 MT in Pune, Maharashtra. Sep-15 Commissions a cement grinding unit with a capacity of 1.6 MT at Jhajjar, Haryana. Sep-15 Commissions a cement grinding unit with a capacity of 1.6 MT at Dankuni, West Bengal. Dec-15 Compat sets aside the Competition Commission of India (CCI) order of alleged cartelisation Feb-16 The company signs binding MoU with Jaiprakash Associate to acquire 22.4 MT cement capacity Top 1 Shareholders Rank Name Last filing date % O/S Position (m) Change (m) 1 Aditya Birla Group 31-Dec-15 61.6 169.17 (.) 2 Aberdeen Asset Management (Asia) Ltd. 3-Jun-15 2.5 6.94. 3 Life Insurance Corporation of India 31-Dec-15 2.4 6.51.4 4 OppenheimerFunds, Inc. 31-Dec-15 1.4 3.88. 5 Aberdeen Asset Managers Ltd. 31-Dec-15 1.4 3.78 (.2) 6 UTI Asset Management Co. Ltd. 31-Dec-15.7 1.88 (.3) 7 The Vanguard Group, Inc. 31-Jan-16.7 1.82 (.) 8 Franklin Advisers, Inc. 3-Sep-15.6 1.66. 9 Franklin Templeton Asset Management (India) Pvt. Ltd. 31-Dec-15.6 1.63. 1 DSP BlackRock Investment Managers Pvt. Ltd. 31-Jan-16.5 1.46. Source: Reuters, ICICIdirect.com Research Recent Activity Shareholding Pattern (in %) Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Promoter 61.69 61.69 61.69 61.69 62.67 FII 19.52 19.32 18.52 18.43 18.1 DII 5.88 5.86 6.77 7.1 7.44 Others 12.91 13.13 13.2 12.78 11.79 Buys Sells Investor Name Value Shares Investor Name Value Shares Life Insurance Corporation of India 17.6.42 GMO LLC -28.74 -.68 Driehaus Capital Management, LLC 6.77.16 William Blair Investment Management, LLC -26.11 -.62 Baillie Gifford & Co. 2.6.6 UTI Asset Management Co. Ltd. -1.75 -.26 T. Rowe Price Hong Kong Limited 2.14.5 Aberdeen Asset Managers Ltd. -1.2 -.24 Kotak Mahindra Asset Management Company Ltd. 1.43.3 BlackRock Institutional Trust Company, N.A. -2.25 -.5 Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 7

Financial summary Profit and loss statement Crore (Year-end March) FY14 FY15 FY16E* FY17E* Total operating Income 2,77.9 22,651.5 24,171.5 26,376.7 Growth (%).3 12.8 6.7 9.1 Raw material cost 3327.4 356.1 3898. 481.8 Power & Fuel cost 4135.4 4742.9 439.9 4691.4 Freight cost 458.8 5397. 5895.7 62.1 Employees cost 114.6 1218.3 141.6 1555.2 Others 343.7 3817.9 475.2 465.1 Total Operating Exp. 16,461.9 18,736.2 19,661.4 21,178.6 EBITDA 3,616. 3,915.3 4,51.1 5,198.1 Growth (%) -2. 8.3 15.2 15.3 Depreciation 1,52.3 1,133.1 1,252.4 1,32.6 Interest 319.2 547.5 519.9 52.6 Other Income 531. 651.5 493.2 616.5 PBT 2,775.6 2,886.3 3,231. 3,991.4 Total Tax 631. 871.5 976.2 1234.6 PAT 2,144.5 2,14.7 2,254.8 2,756.7 Growth (%) -19.2-6.1 11.9 22.3 Adjusted EPS ( ) 78.2 73.4 82.2 1.5, * does not include Jaypee financials Cash flow statement Crore (Year-end March) FY14 FY15 FY16E* FY17E* Profit after Tax 2,144.5 2,14.7 2,254.8 2,756.7 Add: Depreciation 1,52.3 1,133.1 1,252.4 1,32.6 (Inc)/dec in Current Assets -641.7-599.7 462.9-2,711.3 Inc/(dec) in CL and Provisions -886.7 1,566.5-993.8 1,975.1 CF from operating activities 1,668.4 4,114.6 2,976.3 3,341.2 (Inc)/dec in Investments -62.4 1,26.4.. (Inc)/dec in Fixed Assets -2,338. -6,24.8-3,. -2,5. Others 389.9 496.2.. CF from investing activities -2,55.5-4,538.3-3,. -2,5. Issue/(Buy back) of Equity.2.2.. Inc/(dec) in loan funds 979.6 1,638.1 825. -5. Dividend paid & dividend tax -288.8-288.5-82.6-82.6 Inc/(dec) in Sec. premium.... Others 6.9 217.3 342.5 45. CF from financing activities 697.9 1,567. 364.9-852.6 Net Cash flow 135.2 119.9 341.2-11.5 Opening Cash 142.3 277.5 397.5 738.7 Closing Cash 277.5 397.5 738.7 727.3, * does not include Jaypee financials Balance sheet Crore (Year-end March) FY14 FY15 FY16E* FY17E* Liabilities Equity Capital 274.2 274.4 274.4 274.4 Reserve and Surplus 16,823.3 18,766.9 2,561.6 22,965.7 Total Shareholders funds 17,97.6 19,41.3 2,836. 23,24.1 Total Debt 4,875.1 6,513.2 7,338.2 6,838.2 Deferred Tax Liability 2,295.8 2,792. 2,792. 2,792. Minority Interest / Others.... Total Liabilities 24,268.5 28,346.4 3,966.2 32,87.3 Assets Gross Block 25,317.3 31,558.1 34,358.1 35,146.5 Less: Acc Depreciation 9,442.3 1,575.4 11,827.8 13,148.4 Net Block 15,875. 2,982.7 22,53.3 21,998.2 Capital WIP 2,38.4 2,38.4 2,238.4 3,95. Total Fixed Assets 17,913.5 23,21.2 24,768.7 25,948.2 Investments 5,391.7 5,28.8 5,28.8 5,28.8 Inventory 2,368.4 2,751.4 2,546.4 3,234.8 Debtors 1,281. 1,23.2 1,71.6 1,469. Loans and Advances 2,56.7 2,8.5 2,33.8 4,296.6 Other Current Assets 15.3 16. 17.4 19. Cash 277.5 397.5 738.7 727.3 Total Current Assets 6,448.9 7,168.6 7,46.9 9,746.7 Creditors 4,512.6 5,749.1 4,846.6 6,426.7 Provisions 973. 1,33. 1,211.7 1,66.7 Total Current Liabilities 5,485.6 7,52.1 6,58.3 8,33.4 Net Current Assets 963.3 116.5 988.6 1,713.3 Others Assets.... Application of Funds 24,268.5 28,346.4 3,966.1 32,87.2, * does not include Jaypee financials Key ratios (Year-end March) FY14 FY15 FY16E* FY17E* Per share data ( ) EPS 78.2 73.4 82.2 1.5 Cash EPS 116.6 114.7 127.8 148.6 BV 623.5 693.9 759.3 846.9 DPS 9. 9. 25. 25. Cash Per Share 1.1 14.5 26.9 26.5 Operating Ratios (%) EBITDA Margin 18. 17.3 18.7 19.7 PBT / Total Operating income 13.8 12.7 13.4 15.1 PAT Margin 1.7 8.9 9.3 1.5 Inventory days 42.9 41.2 4. 4. Debtor days 2.9 2. 22. 22. Creditor days 89.2 82.7 8. 78. Return Ratios (%) RoE 12.5 1.6 1.8 11.9 RoCE 11.7 1.9 11.6 12.9 RoIC 14.1 11.9 12.8 15.1 Valuation Ratios (x) P/E 36.7 39.1 35. 28.6 EV / EBITDA 22. 21.1 18.4 15.9 EV / Net Sales 4. 3.6 3.4 3.1 Market Cap / Sales 3.9 3.5 3.3 3. Price to Book Value 4.6 4.1 3.8 3.4 Solvency Ratios Debt/EBITDA 1.3 1.7 1.6 1.3 Debt / Equity.3.3.4.3 Current Ratio 1.2 1. 1.2 1.2 Quick Ratio 1.1 1. 1. 1.1, * does not include Jaypee financials ICICI Securities Ltd Retail Equity Research Page 8

ICICIdirect.com coverage universe (Cement) CMP M Cap EPS ( ) EV/EBITDA (x) EV/Tonne ($) RoCE (%) RoE (%) Company ( ) TP( ) Rating ( Cr) FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E ACC* 1211 14 Hold 23,455 61.8 31.3 59.4 17.5 18.9 13.2 119 121 16 8.3 6. 1.7 14.1 7. 12.5 Ambuja Cement* 189 215 Hold 3,38 9.7 5.2 7. 13.4 17.7 13.8 173 164 123 14. 7.9 11.3 14.8 7.8 1.1 UltraTech Cem 2873 36 Buy 78,835 73.4 82.2 1.5 21.1 18.4 15.9 217 24 181 1.9 11.6 12.9 1.6 1.8 11.9 Shree Cement 1327 113 Buy 36,255 122.5 135.7 273.4 27.7 27. 16.4 286 218 22 6.2 7. 13. 8.1 8.3 14.5 Heidelberg Cem 65 81 Hold 1,836 2.6 1.4 3. 8.8 11.5 9.1 79 79 79 7.2 6.2 8.6 6.8 3.6 7. India Cement 69 8 Hold 2,243 1. 4. 5.7 7.3 6.2 5.6 53 51 51 6.8 8.5 9.3.8 3.7 4.5 JK Cement 493 486 Hold 3,133 22.4 18.7 34.6 11.9 9.8 8.3 75 72 81 8.5 9.7 12.4 9.5 7.5 12.3 JK Lakshmi Cem 276 294 Hold 3,143 8.1-1.9 8.5 13.2 16. 11.1 116 8 72 7.8 4.1 8.3 7.2 NA 7.3 Mangalam Cem 171 196 Buy 438 8.9-7.2 18.4 9.8 22.4 6.1 39 4 35 7.2 1.2 11.1 5.3 NA 8.8 SFCL 13 14 Buy 2,353 3.8 5.3 9.6 6.9 6.6 4.6 162 158 135 12.4 15.2 21.8 12.1 14.1 2.9 *CY14, CY15E, CY16E ; ^June year end ICICI Securities Ltd Retail Equity Research Page 9

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Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. It is confirmed that Rashesh Shah, CA, and Devang Bhatt, PGDBM, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. It is confirmed that Rashesh Shah, CA, and Devang Bhatt, PGDBM, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report. We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. 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