International Journal of Commerce and Management Research

International Journal of Commerce and Management Research ISSN: 2455-1627, Impact Factor: RJIF 5.22

Volume 3; Issue 3; March 2017; Page No. 116-119

A comparative study on the financial performance and earnings values of Ultratech cement and
Ramco cement
1
R Gayathiri, 2 Sanmathi Devi SP, 3 Shraddha B Vaidya, 4 Shrinithi M, 5 Sneha Merlin MR
1
Assistant Professor, Department of B.Com (PA), PSGR Krishnammal College for women, Coimbatore, Tamil Nadu, India
2-5
III BCOM PA Students, Department of B.Com (PA), PSGR Krishnammal College for Women, Coimbatore, Tamil Nadu, India

Abstract
Finance is a field that deals with the study of investments, the dynamics of assets and liabilities at different degrees of uncertainty
and risk. Earnings per share is the portion of company’s profit allocated to each outstanding share of common stock. They play a
dominant role in setting the frame work and managerial conclusion can be drawn from these statements. The project entitled “A
Comparative Study on the Financial Performance and Earnings Values of Ultratech Cement and Ramco Cement” throws light on
overall financial performance of the company and its Earnings per share. For this analysis the tools used are Comparative Income
Statement and Earnings per Share.

Keywords: comparative income statement and earnings per share

Introduction Objectives of Study

Cement is the most essential raw material in any kind of  To compare efficiency of Ultratech Cement and Ramco
construction activity. Accordingly, cement industry plays a Cement companies in utilization of financial resources.
crucial role in infrastructure development of the country.  To find earnings value of Ultra tech Cement and Ramco
Given the vast geographical Size and massive population of Cement.
the country, various construction activities undertaken by the
central government, state governments, public sector Research Methodology
undertaking and other organizations, including private sector Research design is the structure of investigation to obtain
generates huge demand for cement. India is the second largest answers to research questions. The study was mostly on
producer of quality cement in the world. The cement industry secondary data collected from investopedia.com
in India comprises 183 large cement plants and over 365 mini
cement plants. Ultratech Cement was incorporated in 2000 as Source of Data
Larsen & Toubro. Later it was demerged and acquired by Secondary data has been collected from various journals and
Grasim and was renamed as Ultra Tech Cement in 2004. websites like moneycontrol.com.
Today Ultatech cement a part of Aditya Birla group, is the
country‘s largest exporter of cement clinker. Ramco Cements Tools used for the study
Limited (formerly Madras Cements Ltd) is the flagship The following tools have been applied in the study,
company of the Ramco Group, a business group based in  EPS (Earnings Per Share)
Chennai, South India. It is the fifth largest cement producer in  Comparative income statement
India. The company also produces ready mix concrete and dry
mortar products and operates wind farms. Review of Literature
Smita Rao & Hetal Gaglani (2016) [1], they conducted study
Statement of the problem on the sample of nine selected textile company for the period
Financial system of a country is the most essential factor for of 2004–2013. The result has been obtained by applying
the economy’s development and performance. The firm ANOVA for identifying the relationship between receivable
communicates financial information to the users through management and working capital management of company.
financial statement and reports. Financial statement comprises The study revealed that of all the receivables has significant
of two statements namely Balance Sheet and Profit & Loss contribution in current assets, total assets, sales and working
Account. Financial analysis is done to evaluate the capital of companies.
performance and liquidity of the industry by properly Geetha T N & Ramasamy S. (2016) [2], in this research the
analyzing the items of Balance Sheet. It helps in better author make use of cement industry in India to find out the
understanding of industries financial position, liquidity and overall financial performance efficiency. Twelve years data
performance by analyzing the financial statements with has been employed in this study from 2001-2002 to 2012-
various tools and evaluating the relationship between various 2013. To find out the overall performance efficiency the
elements of financial statements. Therefore, it results in this authors employed Ratio Analysis and Compound Aggregate
analyzing and comparing the financial performance of Growth rate (CAGR). The authors found that the cement
selected cement industries. industry performance was good in India during the study

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 International Journal of Commerce and Management Research
period. The

2
authors concluded that the Cement companies in India have to is a portion of profit earned and allocated to the shareholders.
consolidate in order to become strong, vibrant and also they Each share would receive certain amount of profits if it is
have to concentrate on export market. shared and it is called EPS. Higher the EPS higher the
profitability of the company. It is calculated by:
Data analysis and interpretation
Earnings per Share Earnings available to equity shareholders
The profit earned by a company is determined by the EPS No. of equity shares
from the point of view of ordinary shareholders. Earnings per
share

Table 1: Table showing Earnings per Share (Rs. in lakh)

Ultratech Cement Ramco Cement
Years Net profit No. of shares Earnings per share Net profit No. of shares Earnings per share
2015-16 2174.65 27.44 79.25 558.26 23.8 23.46
2014-15 2014.73 27.44 73.42 242.35 23.8 10.18
2013-14 2144.47 27.42 78.21 137.7 23.79 5.79
2012-13 2655.43 27.41 96.88 403.65 23.79 16.97
2011-12 2446.19 27.4 89.28 385.11 23.79 16.19
Source: Secondary data.

earnings in the following years. Then there was an increasing

trend for the year 2015-16 compare to the year 2014-15.
Ramco Cement: The earnings value of the share has
increased in the year 2013-14 then there was a fall in the
value of shares. The price went to 5.79 per share in the year
2013-14 but a growth in the value of share in the year 2015-
16.
Comparision: The EPS value of shares was increasing in the
year 2012-13 but a decrease in the value of shares in the year
2013-14 after this the EPS value for Ultratech cement had
fallen further but the value of Ramco cement has increased
76%. Then for the year 2015-16 the increase in the value of
Fig 1: Chart showing earnings per share shares in Ultratech is only by 7% and in Ramco cement the
increase is by 103%.
Interpretation: From the above data the earnings per share
of Ultratech Cement and Ramco Cement companies have Comparative income statement
been given for the years 2011-12 – 2015-16. Comparative income statement gives an idea of the progress
Ultratech Cement: The earnings per share have been of business over a period of time. The changes in absolute
increased in the year 2012-13 but there was a sudden fall in money values and percentage can be determined to analyze
the the profitability of the business.

Table 2: Table showing Income statement for the year ended 2011-12 -2012-13 (Rs. in crores)
Particulars Ultratech Cement Ramco Cement
2011-12 2012-13 Inc/Dec % 2011-12 2012-13 Inc/Dec %
Revenue 192357.00 213191.00 20834.00 9.77 32567.00 38308.00 5741.00 14.99
Cost of sales 112922.00 121574.00 8652.00 7.12 14093.00 16738.00 2645.00 15.80
Gross profit 79435.00 91617.00 12182.00 13.30 18474.00 21570.00 3096.00 14.35
Advertisement 8894.00 43674.00 34780.00 79.64 7374.00 9353.00 1979.00 21.16
Depreciation 9629.00 10234.00 605.00 5.91 4251.00 6705.00 2454.00 36.60
Interest expenses 2564.00 2523.00 -41.00 -1.63 1585.00 1785.00 200.00 11.20
Operating expenses 21087.00 56431.00 35344.00 83.92 13210.00 17843.00 4633.00 25.97
Other expenses 25285.00 0.00 -25285.00 0.00 0.00 0.00 0.00 0.00
Other income 391.00 3486.00 3095.00 88.78 309.00 2156.00 1847.00 85.67
Profit before Tax 33454.00 38672.00 5218.00 18.16 5573.00 5883.00 310.00 5.27
Income Tax 9481.00 11791.00 2310.00 19.59 1723.00 1846.00 123.00 6.66
NP 23973.00 26881.00 2908.00 10.82 3850.00 4037.00 187.00 4.63
Source: Secondary Data

Interpretation: The following gives the comparative income Ultratech Cement: The gross profit of the Ultratech cement
statement of Ultratech Cement and Ramco Cement for the has increased by 13.30% and the net profit of the 10.82%.
period of 2011-12 – 2012-13. Thus it shows the there is an increase in operating expenses.
Ramco Cement: The gross profit of the Ramco Cement operating expenses of Ramco Cement is higher than
14.35% but the net profit has increased only by 4.63%. Thus compared to the increase in Ultratech Cement. Thus the
the operating expenses have increased in higher rate. performance of Ultra tech Cement is better than the
Comparision: The profit has increased though the increase in performance of Ramco Cement.

Table 3: Table showing Income statement for the year ended 2012-13 -2013-14 (Rs. in crores)
Particulars Ultratech Cement Ramco Cement
2012-13 2013-14 Inc/Dec % 2012-13 2013-14 Inc/Dec %
Revenue 213191.00 216522.00 3331.00 1.54 38308.00 36835.00 -1473.00 -4.00
Cost of sales 121574.00 128985.00 7411.00 5.75 16738.00 18268.00 1530.00 8.38
Gross profit 91617.00 87537.00 -4080.00 -4.66 21570.00 18567.00 -3003.00 -16.17
Advertisement 43674.00 47513.00 3839.00 8.08 9353.00 9321.00 -32.00 -0.34
Depreciation 10234.00 11390.00 1156.00 10.15 6705.00 8509.00 1804.00 21.20
Interest expenses 2523.00 3610.00 1087.00 30.11 1785.00 0.00 -1785.00 0.00
Operating expenses 56431.00 62513.00 6082.00 48.34 17843.00 17830.00 -13.00 -0.07
Other expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other income 3486.00 3551.00 65.00 1.83 2156.00 633.00 -1523.00 -240.60
Profit before Tax 38672.00 28575.00 -10097.00 -51.17 5883.00 1370.00 -4513.00 -329.42
Income Tax 11791.00 6448.00 -5343.00 -82.86 1846.00 165.00 -1681.00 -1018.79
NP 26881.00 22127.00 -4754.00 -21.49 4037.00 1205.00 -2832.00 -235.02
Source: Secondary Data

Interpretation: Comparative balance sheet for the year 2012- the previous year 2012-13. But there is further decrease in the
13 – 2013-14 of Ultratech Cement and Ramco Cement has net profit as the operating profit of Ramco Cement continues
been done in the above table. to increase.
Ultratech Cement: For the year 2013-14 there is a decrease Comparision: Both the companies have decreased in their
in gross profit as compared to the year 2012-13. But the gross profit and in net profit but the Ultratech Cement have a
decrease in net profit has increased thus it shows that there is lesser fall compared to Ramco Cement. So for the year 2013-
increase in operating expenses. 14 the performance of Ultratech Cement is better than the
Ramco Cement: the gross profit has decreased compared to performance of Ramco Cement.

Table 4: Table showing Income statement for the year ended 2013-14 -2014-15 (Rs. in crores)
Particulars Ultratech Cement Ramco Cement
2013-14 2014-15 Inc/Dec % 2013-14 2014-15 Inc/Dec %
Revenue 216522.00 243490.00 26968.00 11.08 36835.00 30554.00 -6281.00 -20.56
Cost of sales 128985.00 145914.00 16929.00 11.60 18268.00 16853.00 -1415.00 -8.40
Gross profit 87537.00 97576.00 10039.00 10.29 18567.00 13701.00 -4866.00 -35.52
Advertisement 47513.00 53739.00 6226.00 11.59 9321.00 8936.00 -385.00 -4.31
Depreciation 11390.00 12034.00 644.00 5.35 8509.00 8026.00 -483.00 -6.02
Interest expenses 3610.00 5865.00 2255.00 38.45 0.00 1908.00 1908.00 100.00
Operating expenses 62513.00 71638.00 9125.00 55.39 17830.00 18870.00 1040.00 5.51
Other expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other income 3551.00 3919.00 368.00 9.39 633.00 2739.00 2106.00 76.89
Profit before Tax 28575.00 29857.00 1282.00 -35.71 1370.00 -2430.00 -3800.00 156.38
Income Tax 6448.00 8835.00 2387.00 27.02 165.00 1147.00 982.00 85.61
NP 22127.00 21022.00 -1105.00 -5.26 1205.00 -3577.00 -4782.00 133.69
Source: Secondary Data

Interpretation: The following shows the comparative Ramco Cement: The gross profit for the year 2014-15 has
income statement for Ultratech Cement and Ramco Cement. been decreased. But the decreased in net profit by 133.69%.
Ultratech Cement: The gross profit for the year 2014-15 has Comparision: The gross profit has increased from the
increased despite of the fall in the previous year 2013-14. previous year 2013-14 Ultratech Cement but there is a
Though the gross profit has increased the net profit has fallen decrease for Ramco Cement. The Ultratech Cement has
by 5.26% so this shows the increase in the operating decreased lesser than the decrease in Ramco cement.
expenses.
 Table 5: Table showing Income statement for the year ended 2014-15 -2015-16 (Rs. in crores)
Particulars Ultratech Cement Ramco Cement
2014-15 2015-16 Inc/Dec % 2014-15 2015-16 Inc/Dec %
Revenue 243490.00 255518.00 12028.00 4.71 30554.00 36043.00 5489.00 15.23
Cost of sales 145914.00 149790.00 3876.00 2.59 16853.00 13703.00 -3150.00 -22.99
Gross profit 97576.00 105728.00 8152.00 7.71 13701.00 22340.00 8639.00 38.67
Advertisement 53739.00 57185.00 3446.00 6.03 8936.00 7490.00 -1446.00 -19.31
Depreciation 12034.00 13684.00 1650.00 12.06 8026.00 8505.00 479.00 5.63
Interest expenses 5865.00 5599.00 -266.00 -4.75 1908.00 1767.00 -141.00 -7.98
Operating expenses 71638.00 76468.00 4830.00 13.33 18870.00 17762.00 -1108.00 -6.24
Other expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other income 3919.00 2547.00 -1372.00 -53.87 2739.00 6344.00 3605.00 56.83
Profit before Tax 29857.00 31807.00 1950.00 -59.49 -2430.00 10922.00 13352.00 122.25
Income Tax 8835.00 8925.00 90.00 1.01 1147.00 1449.00 302.00 20.84
NP 21022.00 22882.00 1860.00 8.13 -3577.00 9473.00 13050.00 137.76
Source: Secondary Data The net profit of both the Companies has fallen but the fall in
Ramco Cement is higher than the Ultratech cement.
Interpretation: The comparative income statement for the
year 2014-15 -2015-16 of Ultratech Cement and Ramco
Cement has been given below.
Ultratech Cement: The gross profit for the year 2015-16 has
increased by 7.71% and the net profit by 8.13%. So the
management of operating expenses has decreased and the
profit earned has increased.
Ramco Cement: The gross profit and net profit for the year
have been increased and the profit for the year is increase
highly.
Comparision: The performance of Ramco Cement is higher
compared to the Ultratech cement. But compared to the
previous year the loss the profit earned and it is multi folded.

Findings and Suggestions

Earnings per Share
 The earnings value of Ultratech Cement and Ramco
Cement for the year 2012-13 has been increased by 8.55%
and 4.81% respectively. So, the performances of the
Cement companies were good.
 For the year 2013-14 there was a great fall in the value of
shares of Ultratech Cement and Ramco Cement by
19.24% and 65.88% respectively so in this year the fall in
Ramco Cement ids higher.
 In the year 2014-15 Ultratech Cement has further fallen by
6.04% and for Ramco Cement it has increased by 75.99%
so the share value of Ramco cement is better than the
Ultratech cement.
 The EPS values of shares of Ultratech Cement and Ramco
Cement have increased by 7.93% and 130.35% for the
year 2015-16. So the increase in Ramco Cement is higher
in this year compared to the performance of Ultratech
Cement.
Hence, here the decrease and increase in Ultratech is constant
but the fall and raise in the value of Ramco Cement is
instable.

Comparative income
statement 2011-12 & 2012-13
The net profit for Ultratech cement has increased by 10.82%
and in Ramco cement by 4.63% thus the performance of
Ultratech Cement is higher.

2012-13 & 2013-14

2013-14 – 2014-15
The net profit has decreased further in Ultratech Cement
but there was a net loss in Ramco Cement.

2014-15 & 2015-16

The net profit has risen in both Ultratech Cement and
Ramco Cement but the increase in Ramco Cement is
high compared to the increase in Ultratech Cement.
Therefore, from the above there is an expected increase
in the future years.

Conclusion
The study aims at the financial comparision between
Ultratech Cement and Ramco Cement. The financial
performances of the Cement companies are compared
and the result has been derived. Thus from the above
findings the growth of Ultratech Cement is stable and
steady but the rise and fall in Ramco Cement is not
stable and thus it requires a better management control.

References
1. Smita Rao and HetalGaglani S in their article on, -A
Comparative Study of Financial and Liquidity
Position of Cement Industry Published in
International Online Interdisciplinary Journal, 2016
5(6). ISSN 2249-8941.
2. Geetha TN, Ramasamy SS. in their article on, -A
Comparative Study of Financial and Liquidity
Position of Cement Industry Published in
International Online Interdisciplinary Journal, 2016
5(6). ISSN 2249-8941.
3. www.moneycontrol.com
4. www.investopedia.com
5. www.wikkipedia.com
6. International Online Interdisciplinary Journal, 2016
5(6). ISSN 2249- 8941.
7. Interdisciplinary Journal of Contemporary Research
of Business, 2013; 4(11).
8. ICAI Cost Accounting Module II
9. Management Accounting, Jain SP, Narang KL,
Kalyani Publishers, Third Revised Edition