You are here » Home » Companies » Company Overview » UltraTech Cement Ltd

UltraTech Cement Ltd.

BSE: 532538 Sector: Industrials
NSE: ULTRACEMCO ISIN Code: INE481G01011
BSE 11:03 | 16 Nov 3939.30 31.55
(0.81%)
OPEN

3950.00

HIGH

3977.00

LOW

3919.10

NSE 10:54 | 16 Nov 3948.50 35.55
(0.91%)
OPEN

3952.00

HIGH

3980.00

LOW

3911.05

OPEN 3950.00
PREVIOUS CLOSE 3907.75
VOLUME 4247
52-Week high 4594.30
52-Week low 3263.70
P/E 52.97
Mkt Cap.(Rs cr) 108,185
Buy Price 3939.60
Buy Qty 23.00
Sell Price 3944.25
Sell Qty 8.00
OPEN 3950.00
CLOSE 3907.75
VOLUME 4247
52-Week high 4594.30
52-Week low 3263.70
P/E 52.97
Mkt Cap.(Rs cr) 108,185
Buy Price 3939.60
Buy Qty 23.00
Sell Price 3944.25
Sell Qty 8.00

UltraTech Cement Ltd. (ULTRACEMCO) - Chairman Speech

Company chairman speech

TO SHAREHOLDERS

Dear Shareholder

Global Economy:

The global economy is on a rebound. The International Monetary Fund (IMF) estimatesindicate that global real GDP grew 3.8% in 2017. This is the highest growth pace over thelast six years. It is also the broadest synchronised global growth upsurge since 2010 asunderlined by IMF. This impetus from a supportive monetary policy was further buoyed by arevival of investment spending in advanced economies. The expansionary fiscal and monetarypolicies in the US led to improve growth prospects. The US grew at 2.3% in 2017 as against1.5% in 2016. Growth accelerated in Europe and Asia too. The global economic recovery isexpected to continue. For the current and the next year a strong growth at 3.9% isprojected. This positive outlook is somewhat clouded. Increased trade protectionismrising international crude oil prices geo-political risks and the uncertainty aboutnormalisation of monetary policies in advanced economies from highly accommodativeconditions in the past are some of the factors that dim the outlook.

Indian Economy:

India's economy is emerging strongly from the transitory effects of demonetisation andimplementation of Goods and Services Tax (GST). Although India's GDP growth slowed from7.1% in FY17 to 6.7% in FY18 the economy recorded a seven-quarter high GDP growth of 7.7%in the exit quarter of FY18. This reflects momentum.

India's macroeconomic indicators remain healthy. The fiscal deficit has been cut to3.5% of GDP. India's foreign exchange reserves as at March end stood at a comfortablelevel of $424 billion.

Investors seem to be positive on India's economic prospects. The Foreign DirectInvestment (FDI) flows continue to be encouraging. India's global ranking on the ease ofdoing business notched up to 100 from 142 in barely four years while that on globalcompetitiveness index has climbed from 71st in 2014-15 to 39th in2016-17.

The prevailing sense of optimism accentuates India's continuing economic growth in thefuture as well. It is attributable to the country's solid fundamentals such asdeleveraging by corporates resulting in much stronger balance sheets better capacityutilisation with consumption demand becoming stronger and insolvency and bankruptcyprocess weeding out non-performing assets among others. The Government's unwavering pushfor infrastructure projects – Bharatmala Pariyojana airports metros affordablehousing urbanisation smart cities and digitisation are excellent stimulators for theeconomy's growth in the medium-term.

At the same time we cannot ignore near-term challenges. The bucket of concerns consistof rising oil prices hardening inflation firming bond yields and widening currentaccount deficit. The ongoing global trade frictions particularly between the US andChina are worrisome and can have a spillover negative effect on countries like India. Sothe terrain ahead could be a tad bumpy depending on the economic and geopoliticalenvironment.

Your Company's performance:

The cement sector saw an impressive pickup at over 7.5% ending a 7 year down cycle.You Company put in a remarkable performance attaining net revenues of US$ 4.87 billion (`31411 crores) and EBITDA of US$ 1.04 billion (` 6729 crores). The major development ofthe year was the successful completion of the acquisition of the 21.2 mtpa capacity cementplants of Jaiprakash Associates Limited. This acquisition enables your Company's entryinto the high growth markets of India where it needed greater reinforcement. Your Companyhas injected the much needed working capital strengthened operations by upgradingtechnology and plant maintenance. This has resulted in improving efficiencies enhancingcapacity utilisation and bringing the cement manufactured at these plants up to yourCompany's standard. The transition of the acquired cement plants to the ‘UltraTech'brand has been achieved.

Your Company commissioned a greenfield clinker capacity of 2.5 mtpa at ManawarDistrict - Dhar Madhya Pradesh coupled with a cement grinding facility of 1.75 mtpacapacity. Commissioning the plant in less than 365 days has set a global benchmark. Theplant is of strategic advantage largely catering to the growing cement demand from MadhyaPradesh's main industrial belt - the Dewas-Ratlam-Pithampur-Indore sector. An additionalcement grinding facility of 1.75 mtpa capacity as well as a waste heat recovery system of13 MW capacity is under erection and both are expected to be completed before September2018 at Dhar.

Your Company now has 19 Integrated Plants 1 clinkerisation Unit 25 Grinding Units and7 bulk terminals. With the commissioning of the additional grinding unit at Dhar and atBara your Company's cement manufacturing capacity will stand augmented to 96.5 mtpa.

I would also like to apprise you of your Company's participation in an insolvencyresolution process under the Insolvency and Bankruptcy Code 2016 through the submissionof a resolution plan for acquiring Binani Cement Limited. Its assets which are proposed tobe acquired fall in line with your Company's long-term strategy to expand grow andconsolidate its position as best as possible in an economically efficient manner in themarkets of Rajasthan and Gujarat. Currently hearings are pending before the RegulatoryAuthorities. These include the National Company Law Tribunal the National Company LawAppellate Tribunal and the Supreme Court of India. That said your Company has received therequisite approval from the Competition Commission of India for the proposed transaction.

Outlook

Growth in the cement sector is expected to be around 8% in FY 2018-19 which isencouraging vis-a-vis growth over the last few years. The Government's unrelenting thruston bringing the nation's infrastructure up to speed coupled with inclusive growth is themajor push factor for the economy. The outlook on the sector is bright.

What Give Us The Edge

Undeniably our people their dedication to work their sense of belongingness and pridein the Group their putting the organisation first and living our values. I acknowledgetheir contribution and count on their continued commitment to take our business far ahead.

The Aditya Birla Group: In Perspective

The year 2017-18 has been a momentous year on all counts. We reached a record revenueof $ 43 billion with an EBITDA of $ 6 billion. Our Group's market cap crossed the $ 50billion mark. These spectacular achievements are a reflection not only of our growing sizeand scale the inherent soundness of our strategies and operations but importantly theenormous confidence that investors and other stakeholders have reposed in us.

I am delighted to share with you that Aon Hewitt a reputed global consulting firm inthe ‘Best Employers 2018' study conducted by them have named our Aditya Birla Groupas the ‘Best Employer' in India.

Moving on to our people processes what strikes me most is that the development andleadership aspects embedded in it are all futuristic. I believe we are headed in theright direction. Let me give you a flavour of what we have accomplished and how we areconstantly refreshing and reengineering our HR initiatives.

Our Group HR has formulated a unique proposition for leadership development through the2x2x2 formula. It is structured in a manner that accords opportunities to high talent towork in two businesses across two geographies and in two functions. Such an approachshould give a holistic experience and help prepare our leaders of the future.

I had apprised you earlier on the talent councils led by Business Heads and Directorsat Group business and at the functional levels. So far more than 250 talent councilmeetings have been held with over 8000 development conversations and actions initiatedfor these colleagues. I have attended several of these meetings and am much encouraged bythe positivity and enthusiasm they generate among employees down the line. They rightlybelieve that talent will always bubble to the top. More than ever before in the peopledomain two segments that have grabbed the attention of progressive corporates comprise ofthe millennials and gender diversity issue. In our Group 52% of our executives are under35 years of age. They are the leaders of tomorrow whom we need to groom today. Today womenconstitute over 14% of our employee force. Game changing career enabling policies havebeen introduced. These include work life issues such as maternity childcare flexi timelocal commute and accompanied travel for the child and the caretaker. Alongside as part ofthe family support initiative paternity leave is also being provided.

For younger employees through our flagship programme which is the Aditya Birla GroupLeadership Programme (ABGLP) we are building a robust talent pipeline at the entryjunior and middle levels who over the years move into senior leadership. From this cadreover 350 youngsters have been placed across the Group.

Gyanodaya the Aditya Birla Global Centre for Leadership and Learning continues itscommitment to prepare P&L and manufacturing leaders through Accelerated LeadershipDevelopment programs. I take great pride in Gyanodaya bagging Gold Award as Best CorporateUniversity – Culture and Brand in Global CCU Awards 2017 "for operating at thehighest levels of excellence and creating value for people business and society".

The sales marketing and customer centricity academy the HR academy enabled 1765managers hone their expertise to greater heights. The Gyanodaya virtual campus continuesto offer 900+ e-learning modules in multiple languages. During the year nearly 40000employees leveraged the e-learning programme.

We are enhancing our HR processes for scale agility and consistent employeeexperience. A comprehensive HR assurance and excellence framework the HR portal to enablethe last mile employee anytime anywhere connect SeamEx the Group HR Shared ServicesCenter are milestones in this journey as they enthuse and energise our people.

In sum

Our Group's robust revenue growth healthy EBITDA margins deploying capitalefficiently and generating cash flows support our ambitious growth plans. Innovation andspirit of entrepreneurship that our employees bring to work is amazing and a majorcontributant to our Group scaling newer heights year after year.

Yours sincerely

Kumar Mangalam Birla