Ultratech Cement Limited · NSE:ULTRACEMCO
Ultratech Cement — Investor Presentation (November 2016)
17 slides from Ultratech Cement's investor presentation, Nov 25, 2016
Slide 1: Presentation for investors to BSE and NSE
ADITYA BIRLA 25" November, 2016 < BSE Limited Corporate Relationship Department Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001. Tel.: 22721233/4 Fax: 022 2272 2039 Scrip Code: 532538 Dear Sirs, s The Manager Listing Department The National Stock Exchange of India Limited Fa ay Plaza’, Bandr
Slide 2: India's Largest Cement Company: Short Term Pain, Long Term Gain
INDIA'S Short Term Pain LARGEST & CEMENT Long Term Gain COMPANY Stock code: BSE: 532538 NSE: ULTRACEMCO Reuters: UTCL.NS Bloomberg: UTCEM IS / UTCEM LX
Slide 3: Demonetization in India
Demonetization in India Government of India announced the ban on usage of ` 500 and ` 1000 notes w.e.f. 9th November’16 Total currency in circulation : ` 16.42 lakh cr (US$ 240 billion) 86% of total currency in ` 500 & ` 1000 bank notes: ` 14.18 lakh cr (US$ 210 billion) Economic Impact: ~
Slide 4: Demonetization in India: Short-term Areas of Impact
Demonetization in India Short-term Areas of Impact: Acute liquidity crunch ~87% of consumer payments have been in cash Reduction in daily purchases and thus a decline in overall volumes Negative price impact of perishables & services Potential impact on Rabi crop Currency fluctuation
Slide 5: Demonetization in India: Long-term Areas of Impact
Demonetization in India Long-term Areas of Impact: Fall in inflation Reduction in interest rates Increase in Public spending Speedy implementation of Government projects Strengthening of organized sector Likely Fiscal Stimulus Growth fuel 4
Slide 6: Demonetization in India: Immediate effect
Demonetization in India Immediate effect 86% of current currency (` 500 & ` 1000 notes) rendered illiquid Severe working capital crunch in businesses Banking system not geared up to meet the demand of cash distribution Restricted cash withdrawals has sucked out liquidity from Trade Distrib
Slide 7: Cement Industry: Overall sales value chain
Cement Industry Overall sales value chain Payment Settlement Cement First sale point Manufacturer Cheque Second Sale Dealers Institutional point (65%) (35%) Mix of Cash & Cheque Partly Sub End Sale point Retailers Institutional contract Generally Cash End Consumer IHB 6 Source: Company estimates
Slide 8: Building Construction Post-demonetization
Building Construction Post-demonetization IHB Institutional Building Construction Key Materials Cement Sand and Aggregates Steel Cement Dealer / Source Mining Largely secondary sector Manufacturer Cash transactions Uses scrap to make steel Largely cheque (cash transaction) Demonetization Imp
Slide 9: Indian Cement Industry: Key Cement Drivers
Indian Cement Industry Key Cement Drivers Supply Channel Commercial Segment Supply Channel (C) , 15% Rural: Dealers / Retailers “H” Urban: Dealers / Retailers / Institutional “I” Largely institutional Housing Infrastructure (H), 65% (I), 20% “C” Institutional / Dealers Infrastructure and Rur
Slide 10: Indian Cement Industry: Demand drivers
Indian Cement Industry Demand drivers Share in Pre- Post Cement Demand Centres Demand demonetization demonetization Rural Housing ~35% Urban Housing: Tier 1 Cities ~10% Tier 2 & other Cities ~20% Infrastructure ~20% Commercial ~15% Demonetization – Boost for Government infrastructure work 9 Source:
Slide 11: Cement demand Post-demonetization: Rural Housing
Cement demand Post-demonetization Rural Housing Retail demand 35% Demand for small construction works (repairs, extension etc.) Largely cash transaction Impact on Demand Immediate Long-term Immediate impact on demand due to cash crunch Demand to normalize once new currency circulation im
Slide 12: Cement demand Post-demonetization: Urban Housing Tier 1 cities
Cement demand Post-demonetization Urban Housing - Tier 1 cities Key consumers - Institutional Sales pattern – Large volumes 10% Transaction – largely cheque Impact on Demand Short term Long-term Demand impacted due to squeeze on working Capital Demand from “A” category builders likely to
Slide 13: Cement demand Post-demonetization: Urban Housing Other Cities
Cement demand Post-demonetization Urban Housing – Other Cities Key consumers –Individual House Builders (IHB) Largely cash transaction for procurement of building materials 20% Land purchase deals have a significant component of parallel economy Impact on Short term to Long-term Demand mediu
Slide 14: Cement demand Post-demonetization: Infrastructure
Cement demand Post-demonetization Infrastructure Demand from large infrastructure companies 20% Large volume off-take (bulk as well as bagged) Largely Government works viz. Roads, Metro Rails, Irrigation etc. No direct impact Impact on Demand Short Term Long-term Short term: Likely no im
Slide 15: Cement demand Post-demonetization: Commercial
Cement demand Post-demonetization Commercial 15% Demand in form of industrial capex Large volume off-take Largely cheque transaction Impact on Demand Immediate Long-term Short term: This segment has not been growing Long-term: demand may improve with fall in interest rates & increase in
Slide 16: Way forward…
Way forward… Improvement in Government liquidity to support for more infrastructure spending Sharper Interest Rate cuts Expect a fiscal stimulus in the Union budgets Housing Demand: Rural - short term disruption, likely to normalize once cash circulation improves in system Government’s t
Slide 17: Disclaimer
Disclaimer Statements in this “Presentation” describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Impor
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