Presented by:Saurabh Jain Fms, Govt. Engineering College,

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PRESENTED BY:-

SAURABH JAIN

FMS, GOVT. ENGINEERINGCOLLEGE, AJMER

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To analyse the financial performance of 

Shree Cement Ltd. through ratioanalysis and its comparison with the other 

key cement players 

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Ticker : SHR

Country : INDIA

Major Industry : Construction 

Sub Industry: : Cement Producers

Employees: : 1,982

BSE code : 500287

NSE Symbol : SHREECEM

Market Cap: : 41,405,783,774 

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Golden Peacock Award National Energy Conservation Award

Greentech Award , 2009 Excellence in water management

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Multiple Brand

Strategy

Efficient team

Exceptional

execution

Excessive

dependance

Marketing mix

not proper 

Location Advantage

Initiatives

Government Policy

Threats of new entrants

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8.34 5.28

54.8174.74

165.91

0

20

40

6080

100

120

140

160

180

Rs.

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

years

Earning per shar 

Current ratio

0.88

2.71

2.28

0

0.5

1

1.5

2

2.5

3

1 2 3

years

  r  a   t   i

years

Dividend Pay- out rati

Mar '07,

13.46

Mar '08,

12.52

Mar '06,

107.92

Mar '05,

54.66

Mar '09,

6.02

Mar '05

Mar '06

Mar '07

Mar '08

Mar '09

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0.518410616

0.794174001

1.135443159

0

0.2

0.4

0.6

0.8

1

1.2

ratio

1

years

Inventory turnover raio

Operating Profit Ratio

26.87 28.69 34.14

0

5

10

15

20

25

30

35

40

2005-2006 2006-2007 2007-2008

 Years

   O   P   R

   (   I  n

Operating Profit

Ratio

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R e t u rn o n N e t W

2 4 .

9 . 6

3 6 .

0

5

1 0

1 5

2 0

2 5

3 0

3 5

4 0

2 0 0 5 - 2 0 0 62 0 0 5 - 2 0 0 72 0 0 5 - 2 0 0 8

 Y e

    R    O    N    W

    (    I   n    %

    ) R e t u rn o n N e t

% )

9

1 3 . 4

0 

2 

4

6 

8 

1 0 

1 2 

1 4

R a t i o i

2 0 0 7 2 0 0 8

 Y e a

N e t P ro f it R a t io

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An increase in EPS is pointing towards favourable conditions to invest inthis company.

  A decrease in the dividend pay out ratio suggests that the company is

distributing a lower portion of its earnings in the form of dividends and sowill be financially stronger and is likely to expand and grow at a faster rate. 

A high current ratio in 2008 (2.28) is good from the creditor’s point of view

but extremely high current ratio is not good from the management point of view.

In such a case (1) more funds of the firm would be employed in unproductive useswhich don not fetch any return (2) it is an indicator of a firm’s poor investment

policy

A high inventory turnover/stock velocity indicates efficient management

of inventory because more frequently the stocks are sold, the lesser amount of money is required to finance the inventory.

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The higher value of debtors turnover shows that the Shree is becoming

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• .

  The operating profit ratio of the Shree Cement Ltd. is continuously

increasing in the successive years and thus we can say that this company hasbeen able not only to increase its sales but also been able to cut down its

operating expenses

  A high return on equity indicates that the Shree is spending wisely and is

likely profitable.High returns on equity lead to higher stock prices.

  The Net Profit ratio has increased in magnitude by 4.43 from 2007 to 2008.

This ratio not only reveals the recovery of the cost and expenses from the

revenue of the period but also leave a margin of reasonable compensation to the

owners for providing capital at their risk.

Book value per share has increased from 130.48 in 2007 to 193.13 in 2008

which is indicative of higher resources of the company. This company is a

potential bonus candidate in the long run

The higher value of debtors turnover shows that the Shree is becoming

more efficient in the management of debtors

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