AN ANALYTICAL STUDY OF AMBUJA CEMENTS LTD. AND ACC LTD. BASED ON VARIOUS PROFITABILITY MEASUREMENTS

Abstract

The Indian cement industry plays a vital role in the country's economic development, contributing significantly to the country's GDP and providing employment to millions of people. The current analytical study focuses on two major players in the industry, Ambuja cements ltd. and ACC ltd. The main objective of these study to measure the profitability based on sales and related to overall return on assets / investments of Ambuja cements ltd. and ACC ltd. The study analyses the financial statements of both companies for the period of December 2017-2021 using various profitability ratios (EBITDA margin ratio, EBIT margin ratio, net profit margin ratio, return on capital employed and return on assets) and also use statistical analysis. (Average, minimum, maximum, standard deviation, coefficient of variation and compound annual growth rate). In summary, Ambuja cements ltd. appears to be more profitable in terms of EBITDA margin ratio, EBIT margin ratio, and net profit margin ratio. However, ACC ltd. appears to be more effective in generating returns from its capital investments and using its assets to generate profits. the coefficient of variation is relatively high for the net profit margin ratio and EBIT margin ratio for ACC ltd. and it is relatively high for the ROCE for Ambuja cements ltd., indicating a greater degree of variation in these ratios compared to the other ratios. The EBIT margin ratio and net profit margin ratio for both companies show a steady increase in their growth rates, while the ROCE and ROA ratios show a slight increase in their growth rates. The study provides useful insights for investors and other stakeholders interested in analysing the profitability of these companies.