ABSTRACT

                  Companies development was depend on profit. Profit play vital role in any companies run. There is small difference between profit and profitability. Profit means an excess of income over expenses and Profitability means the ability of any business unit to earn profit. The higher the profitability, the faster the company will advance on its path of progress. The growth of the company will be of great benefit to the country's economy. In this paper 4 cement companies are studied. Secondary data has been used for this research. Secondary data has been obtained from company annul reports, web sites etc. The company is selected on the basis of market capitalization. The period from the year 2020 to 2023 has been taken for the study.

Keywords: Profit, Cement company, Development, Profitability 

1. INTRODUCTION

             The cement industry has one of the Eight core industries of the country. India is the second largest producer of cement in the world. India is currently a development country where the infrastructure and construction sector will benefit the most. Cement industry plays a major role in the country’s economy directly and directly, such as providing employment to millions of people , educational institutions.

A significant factor which aids the growth of this cement industry is the ready availability of the raw materials for making cement, such as limestone and coal. India’s cement production reached 374.55 millions tonnes in FY23, a growth rate of 6.83% year on year.

             In this time India’s cement industry, as per CRISIL Ratings plans to increases its capacity by 150-160 MT between FY25 and FY28, building upon the 110 MT annual capacity addition over the last five years, to cater to growing infrastructure and housing demands. Cement industries has so many big opportunities likes Government schemes like the Pradhan Mantri Awas yojana for affordable housing for BPL people and PM Gati Shakti National Master Plan for infrastructure are driving cement demand. PM Gati Shakti yojana ‘s main focus on transport networks.

                  There is a high growth see in cement industry in last many years. Cement industry has long term and short term investments needed for their development. Hence, it needs to check the Profitability of selected companies.

2. LITERATURE REVIEW:

Ravindra L. Mojidra, Dr. Hemendra F. Shah (2022) “A STUDY ON PROFITABILITY PERFOMANCE OF INDIAN CEMENT INDUSTRY” In this study , they analyzed the profitability of cement companies. The researcher selected 10 companies in the Cement industry. The study depends on secondary data collected from the Annual reports , web sites of this companies. The data was analyzed using the statistical tools of Average and SD. They calculated the Gross profit ratio, Operating profit ratio, Net profit ratio. They conclude that Ambuja Cement Ltd., UltraTech Cement Ltd., Shree Cement Ltd., The Ramco Cement Ltd., and ACC Cement Ltd. performing well in profit generation. Heidelberge Cement Ltd., The India Cement Ltd., and Birla Corporation Ltd. show very poor performance as regards profitability.

Neha G. Tank, Dr. Chitralekha H. Dhadhal (2019) “A study of profitability Analysis of selected Cement companies.” Analysed  the profitability of five cement companies in India. The data has been analysed by applying Mean, SD, Maximum, Minimum, F-test. They calculated the accounting techniques like Net profit ratio, Gross profit Ratio, Return on equity, Return on Asset, Return on capital employed. They found that Ultratech cement and shree cement having maximum Net profit ratio so these companies are in better position, Shree cement having highest Return on capital employed with Mean of 21,11, Deccan cement is having highest Return on equity , Ultratech and Shree cement having highest Return on asset.

CA Haresh Kothari, Dr. Shankar sodha(2019) In their study conclude that Cement Corporation of India having short term and long term solvency position of the cement company is not satisfactory during the study period. The company did not earn adequate profit during the study period as its Net profit show very low trends from the analysis It is cleared that the sales has not significant impact. On Net liquidity position, profitability and solvency position of Cement Corporation of India. The company did not able to pay its obligations within time during the early period of the Study.

Meenakshi M. Huggi(2022) In their study she found that the average Operating profit  was highest in Shree cement Average Net Profit of Shree cement is more with less deviation, The Shree cement company has maintained consistency as regards other company. She studies only Three cement companies.

3. Objectives:

1. To examine the profitability performance of the selected Cement companies.
2. To make predication about future visions of the companies.

4. Sample:

       The 4 cement companies were selected based on market capitalisation.

        1. UltraTech cement Company

        2. Ambuja cement Company

        3. Shree cement Company

        4. Acc cement Company

5. Period of the Study:

     The Period of the Study is 2019-2020 to 2022-2023.

6. Data collection:

        The data use for this study is only secondary data. Secondary data is collected from the published Financial Statements, Annual Reports and web sites.

7. Tools and techniques for data analysis:

❖    Accounting Techniques:

                          ∙ Revenue from Operations  

                          ∙ Net Profit Margin

                          ∙ Return on Capital Employed

                          ∙ Return on Net worth  

8. Data Analysis:

REVENUE From OPERATIONS (in Crore)

                     The UltraTech Cement company has highest average of Revenue from operations (50748.75 crore). The Ambuja cement company has 29880.5 crore average Revenue from operations. Shree cement company has 13929.0175 crore average Revenue from operations and Acc cement company has 24311.75 crore average Revenue from operations. It shows high Revenue from operations of UltraTech cement company as compare to remaining selected companies.

NET PROFIT MARGIN (%)

                      In case of Net Profit Margin, Ambuja cement has highest average than selected other companies. It indicates that profitability of Ambuja cement company is more than selected other companies. Ambuja cement company has 14.11% average Net profit margin. UltraTech cement company has 11.9325% average net profit margin. Shree cement company has 13.985 average Net profit margin and Acc cement company has 12.3% average Net profit margin. It indicate that Ambuja cement company as better position selected companies.

 RETURN ON CAPITAL EMPLOYED (%)

                The average of Return on Capital Employed ratio in case of Shree cement company (15.405%) has more than UltraTech cement company (13.625%), Ambuja cement company (11.285%) and Acc cement company (14.64%). The result of this ratio support above interpretation.

RETURN ON NET WORTH (%)

In case of Return on Net Worth ratio average of this ratio in Shree cement company is more than three selected companies i.e. UltraTech cement company, Ambuja cement company and Acc cement company. The ratio shows high profitability of Shree cement company.

9.CONCLUSION:

                          Analyzing the four years data of profitability ratio i.e Revenue from Operation, Net Profit Margin, Return on Capital Employed and Return on Net Worth. it is concluded that Revenue from Operations is more in UltraTech cement company than other selected company. Net Profit Margin is more in Ambuja cement company. While Return on Capital employed and Return on Net worth is more in Shree cement company than other selected company. It is found that Profitability in Shree cement company is more than other selected company, but the other selected company also earn profit and that company also shows profitability.