Indian Cement Industry 2013

Low utilization rates and weak demand from realty and infrastructure sectors is driving consolidation in the Indian cement industry. More mergers & acquisitions are expected in the medium-to-long-term as valuations are attractive to buyers and investors.

India is the second largest producer of cement in the world with 183 large plants and 365 mini & white cement plants. As per Cement Manufacturers’ Association (CMA), the industry has a total expected turnover of Rs.1.35 lakh crores in FY12 with a CAGR of 10% between FY07-11. Total installed capacity of Large cement plants is 234.3 million tonnes per annum of which 168.3 million tonnes were produced. For Mini & White Cement Plants, the total installed capacity is 11.1 million tonnes per annum of which 6 million tonnes were produced. The industry consists of 42 major players in the country and is expected to consolidate in the medium to long term with many mergers & acquisitions.

Valuation of Cement Companies

Company Name	EV/EBITDA (ttm)	EV/Sales (ttm)
UltraTech Cement	12.1x	2.6x
Ambuja Cements	14.9x	3.5x
Grasim Industries	6.1x	1.4x
ACC	13.8x	2.6x
Shree Cement	12.8x	3.7x
Industry Median	5.7x	0.9x

Industry median includes Madras Cements, Century Textiles and Industries, Chettinad Cement Corporation, The India Cements, J.K. Cement, Prism Cement, Birla Corporation, JK Lakshmi Cement, Orient Paper & Industries, Dalmia Bharat Enterprises, Rain Commodities, HeidelbergCement India, OCL India, Kesoram Industries, The KCP, Sagar Cements, Sanghi Industries, Mangalam Cement, Binani Industries, Andhra Cements, Shree Digvijay Cement Company, Visaka Industries, Gujarat Sidhee Cement, Deccan Cements, Saurashtra Cement, NCL Industries, Panyam Cements & Mineral Industries, Shiva Cement, Kakatiya Cement Sugar & Industries, Anjani Portland Cement, Bheema Cements, Burnpur Cement, Barak Valley Cement, Keerthi Industries, Trinetra Cement

Key Mergers & Acquisitions in Cement Industry

Period	Target	Acquirer
Sep-13	Jaypee Cement (Gujarat)	Aditya Birla Group
Aug-13	Sree Jayajothi Cements	Cement Roadstone Holdings
May-13	Lafarge India Pvt.	Baring Private Equity Asia
Mar-13	Sree Jayajothi Cements	Blackstone Group L.P.
Sep-12	Adhunik Cement	Dalmia Cement (Bharat)
Jan-11	Binani Cement	Binani Industries
May-10	Avnija Properties	Kohlberg Kravis Roberts & Co. L.P.
Nov-09	Samruddhi Cement	UltraTech Cement
Oct-09	Samruddhi Cement	Grasim Industries
Mar-08	My Home Industries	CRH Plc
Dec-07	Shree Digvijay Cement Company	Cimpor Inversiones SA
Aug-07	Ambuja Cements	Holcim
Aug-07	ACE Refractories	Calderys
Jan-06	Uttar Pradesh State Cement Corporation	Jaiprakash Associates
Jan-06	Ambuja Cements	Holderind Investments
Jan-05	ACC	Ambuja Cement India Private
Jun-04	UltraTech Cement	Grasim Industries
Apr-00	Raymond Cement Division	Lafarge India Holding