Ultratech, an Aditya Birla Group (ABG) Company is incorporated in 2000  as UltraTech CemCo Limited. It operated as a subsidiary of L&T, the engineering major till 2004. 63.35% of total capital of the Company is owned by Grasim Industries Ltd. (BOM:500300) . This Capital Intensive company is engaged in manufacturing and marketing of Cement and Cement products. Post merger with Samruddhi Cement, UltraTech is the largest cement  company in India and 8th  largest in the world. At 48.8 mt of grey cement capacity spread across 22 plants, from 11 manufacturing plant in India with total production capacity of 23.10 Mn TPA as on March 2010  the Company is a leading player in Cement Industry. The Company has 11.7  million cubic metres of ready-mix concrete, a more expensive sort of cement, across 68 plants and 504 megawatts of captive thermal power.
The manufacturing plants and grinding unit are spread the country.
1. Pricing Pressure:
The Cement Industry is facing pricing pressure, as the country’s Cement Industry is experiencing demand-supply imbalance since the past two years at least. As per report prepared by rating agency Fitch, the demand-supply imbalance would reach to its highest level in FY13 to 125.8 mtpa  with capacity going up to 392.8 mtpa. Fitch had said that the continued overcapacity in cement sector would exert further pricing pressure on the commodity in 2011, leading to squeezed margin for the manufacturers. Also, cement is largely a regional commodity, the price differs from region to region
2. Increase in Input Cost:
a. Coal, pet coke and gypsum are used as raw material. Import duty of 5%  is imposed on these raw material. Also, the industry is experiencing perennial shortage of coal. To meet the existing demand of coal, reliance is place on import of coal.
b. Cement can be imported duty free. However, major taxes are imposed on import of raw material used for cement manufacture.
3.Fall in Market Share: 
The market share of Aditya Birla Group (i.e. Grasim Industries Ltd. (BOM:500300), UltraTech Cement and Shree Digvijay Cement) was 20.49% in 2005 which has fallen to 18.39%  in 2010. However, in 2008, Grasim Industries Ltd. (BOM:500300) sold Shree Digvijay Cement. It later hived off its cement business into a separate subsidiary called Samruddhi Cement, which in September 2010 got merged into UltraTech Cement. As small and mid tier companies are expanding aggressively and exploring other than traditional market, threat is posed to major cement players.
|Financial Analysis for 9 Months (Rs. In Crores) |
| Name of the Company |
9 Months Ended
| ACC Limited (NSE:ACC) |
| Ultra Tech Cement (NSE:EQULTRACEMCO) |
| Shree Cements DS (NSE:EQSHREECEM) |
| India Cements DS (NSE:EQINDIACEM) |
|Operating Profit Margin (%)||25.01||18.15||24.15||10.41|
|Net Profit Margin (%)||14.68||7.70||5.90||0.51|
|Earning Per Share||45.98||24.72||41.33||0.42|
2.Birla Super, Vikram and Rajashree : These are regional brands. Birla Super is popular in Bangalore, Mysore and Pune. Brand Vikram is favored in North India and Rajshree Brand is known in south India and Maharashtra. There three brands in totality contributes to less than 5% of total production.
1. Ordinary Portland Cement 33, 43, 53 grade (OPC), 53-S (Sleeper Cement): OPC 33 and 43 grade is not generally produced. OPC 53 is used in RCC and pre-stressed concrete of higher grades, cement grouts, instant plugging mortars etc. where initial higher strength is the criteria.
2. Portland Pozzolana Cement (PPC), both Fly Ash and Calcined Clay based: PPC makes concrete more impermeable, denser as compared to OPC. The long-term strength of PPC is higher compared to OPC. PPC produces less heat of hydration and offers greater resistance to the attack of aggressive waters than normal OPC. PPC can be used for all types of construction.
3. Rapid Hardening Portland Cement: The Rapid hardening cement is used for repair and rehabilitation works and where speed of construction and early completion is required due to limitations of time, space or other reasons.
4. Portland Slag Cement (PSC): PSC provides better protection against chloride and sulphate attack. PSC is preferred over OPC for usage in constructions where the structures are susceptible to sulphate and chloride attack. eg Marine structure, structures near the sea, sewage disposal treatment works, water treatment plants, etc.
5. Sulphate Resisting Portland Cement (SRC): SRC can be used for Foundation, Piles, Basements, Underground structures, sewage and water treatment plants and coastal works, where Sulphate attack due to water or soil is anticipated
6. Low Heat Portland Cement: Low heat Portland cement is particularly suitable for making mass concrete for dams and many other types of water retaining structures, bridge abutments, massive retaining walls, piers and slabs, etc
7. Hydrophobic Cement: It is manufactured under special requirement for high rainfall areas to improve the shelf life of cement and the cement is not affected due to high humidity and can be stored for longer period