AmbujaCement

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Ambuja Cement

August 2005

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Indian Economy

In a Sustainable high growth mode

Impetus on Service Sector

Changing Demography - A Growth Driver

Economy getting delinked from Agriculture

& unpredictable monsoons

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GDP Constituent 1997 - 98 2004 - 05

Agriculture 40 23

Industry 35 25

Services 25 52

(%)

Agrarian to a Service Economy

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Cement Growth

A Proxy to GDP Growth

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Other Asian countries experience has been that

whenever Per Capita GDP crosses USD $ 500

there is a substantial rise in the cement

consumption

India set to witness this growth in Cement

Consumption

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Cement Growth in India

Not a Challenge

As

Demand has been growing at a

CAGR of 7% over last Decade

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Cement Demand(Apr - June)

Mn. Tonnes Growth (%)

2005 - 06 34.3 12

2004 - 05 30.7 3

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Momentum of Growth to continue

due to Initiatives in Housing & Infrastructure

Development

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Large forex reserves

Abundant liquidity

Consumer Driven

Low interest rates

Enabled by :

Infrastructure Development now Not only Viable but Profitable

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Expected Cement Demand

2005-06 2006-07

Base Domestic Demand 121 131

Growth - 8% 10 10

Expected Domestic Demand 131 141

Exports (Potential to be even higher) 4 4

Expected Cement Demand 135 145

mn tonnes

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Cement Production Capability

2005-06 2006-07Base Clinker Production 108 111 Increased Production due to improvements 3 4 111 115Clinker Export 6 6 Clinker for Cement Grinding 105 109

Blending Ratio 1.27 1.29

Cement Production 133 141

mn tonnes

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Demand set to outstrip Supply

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As

Last Plant was set up in March ’03

No new supply expected till March ‘06

It Never happened in past

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Structural change in Pricing Scenario Result

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Cement Prices- Domestic -

Aug 2005 Aug 2004 Dec 2004

Bombay 172 163 158

Delhi 158 131 135

Kolkatta 174 175 173

Ahmedabad 151 149 110

Jaipur 143 139 135

Hyderabad 118 121 117

Chennai 145 155 160

Rs. / per Bag

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- International -

Cement Clinker

2004 - 05 37 28

2005 - 06 (E) 42 32

US$ (FOB)

(E) - Expected

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Sea terminalsCement factories

HP

Gujarat

Rajasthan

Maharashtra

Punjab

Ambuja Cement

Gujarat 5.0

North India 6.0

Maharashtra 3.0

Total Capacity 14.0

Mn. tonnes

1986 - 0.7 Mn. Tonnes Today - 14 Mn. Tonnes

A growth of 18 times since inception

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Growth

With

A Sound Business Model

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Our Business Model

Huge owned Infrastructure

Presence in the growing markets of North & West

Premium Brand - only selling in Retail Markets.

Largest Exporter of cement – 15% of Production

35% Cement transport by sea - Cheapest Mode

Low Cost Cement Producer

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7 Owned Ships for transporting Cement by Sea

Large port in Gujarat to handle export of Cement

3 Cement receiving terminals

200 MW of Captive Power Plants at various

Cement Plants to give reliable and cheap power

Own Infrastructure

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Premium Brand

India - A bagged marketIndividual home builder - key driver of demand

Our focus :

Best quality cement

Good packaging

Logistic management - strong distribution network

Customer service

Ambuja Cement - Most preferred brand - Fetching higher realisation

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Direct Cost

FY 2005

Power 202

Fuel 298

Raw material 172

Consumables 49

Direct cost 721

US $ 16.4

Rs./ tonne

USD/INR = Rs. 44

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A Comparison (April - June 2005)

Ultratech Grasim ACC GAC

Sales

- Volume (mn tonnes) 4.00* 3.34 4.44 3.28

- Net Sales 8471 7381 9848 7205

Operating Profit 1691 1726 2335 2350

Operating Margin (%) 20 23 24 33

O/P Per tonne (Rs.) 423 516 525 716

(US$) 9.6 11.8 12.2 16.3

Rs. Mn.

Source : Stock Exchange Filing

* Including Export & Sale of clinker - 0.40 mn. tonnesUSD/INR = Rs. 44

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Gujarat Ambuja Cements Limited(Consolidated Income Statement)

FY2005 FY 2004 Growth (%)Sales 30855 24150 28Operating Profit 9278 7098 31Interest 902 900 -Depreciation 2195 2082 6Profit Before Tax 6181 4116 50Prior Period Adjs (credit) - 425 -Tax 831 688 20Profit After Tax 5350 3853 39Minority Interest 169 229 (26)Net Profit 5181 3624 43Operating Margin 30 % 29 % --

Rs. Mn.

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Gujarat Ambuja Cements Limited (Consolidated Balance Sheet)

FY2005 FY2004Sources of FundsShareholders’ Funds 24873 17314 Minority Interest 79 6375 Deferred Tax 3811 3209Net Debt 8447 11845Total 37210 38743 Application of Funds Gross Fixed Assets 39210 44434Less: Depreciation 14792 16005 Net Fixed Assets 24418 28429 Investments 10835 9637Net Current Assets 1957 677 Total 37210 38743

Rs. Mn.

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Ratios

FY 2005 FY 2004

Interest Cover 9.4 7.5

Operating Margin 31 % 30 %

Net Debt / EBIDTA 1.1 2.2

Net Debt / Networth 0.37 0.61

ROCE 17 % 12 %

RONW 21 % 18 %

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Our Score Card (1987 - 2005)

Parameters CAGR (%)

Capacity 18

Sales 29

Net Profit 36

Networth 30

Return to Shareholders 29

Wtd. Avg. EBIDTA Margin 33

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Our Shareholders

Management24%

Domestic Pension & Mutual Funds

18%

FII's (Incl. GDR)41%

Others17%

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Strategic Alliance with Holcim

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Structure

Due to this Structure GACL’s effective shareholding in ACC goes

up to 11.5% from 8.3 % without any fresh investments by GACL.

ACEL

94.6%

ACC

13.8%

ACIL

GACL AIG/GIC

60% 40%

ACEL

97%

ACC

34.70%

ACIL

GACL HOLCIM 33% 67%

Before Current

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Salient Features of the Partnership

Holcim Investments in India through ACIL only

Access to Holcim’s best practices in areas such

as waste heat recovery, use of alternative fuels,

human resources and Information technology

Opening of new cement trading opportunities in

Middle East and Indian Ocean

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Ambuja Growth Plans

Plan to increase capacity by 3 to 4 mn. tonnes

in immediate future

Growth to be funded from free cash flows

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Thank You