MANAGERIAL ECONOMICS

ULTRATECH CEMENT

Submitted By-

Ashish SharmaArpita Sharma

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TABLE OF CONTENTI

NDEX

Sr. no Topic Page No.pa1 Objective 32 Sources 33 Introduction 44 Price Effect 65 Income Effect 86 Substitution effect 97 Questionnaire 118 Dealers information 129 Bibliography 13

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OBJECTIVE:

Main objective of the assignment is that how demand and supply affect business of Ultratech Cement under different situations. During different seasons the supply and price also varies. Consumer choices affect the demand and producer choices affect the supply of Cement. Price effect is the relationship between Income and Substitution effect. The price of Ultratech Cement may affect the business with its price. Supply may be change with respect to prices, technology, or taxes and the effects with such changes in supply and demand have an effect on quantity. Hence its demand and supply greatly affect the economy, also show how the consumer behavior changes in accordance to the change in demand and supply and most important the price.

SOURCES:

We have collected the information from sources like Primary Source that has been collected by asking questions from visiting to the dealer by which we came to know the information related to Ultratech Cement and Secondary Source has been gathered by goggling through various sites and collected the information of the last three years. Through which we came to know about the demand and supply of Ultratech Cement.

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INTRODUCTION:

Source: http://adityabirla.com/Businesses/Profile/ultratech-cement-limited

UltraTech Cement Limited, with an annual capacity of 62 million tonnes, is the largest cement company in India and amongst the leading producers of cement globally. UltraTech is also the largest manufacturer of white cement and ready mix concrete (RMC) in India.

UltraTech Cement provides a range of products that cater to the needs of various aspects of construction, ranging from foundation to finish. This includes Ordinary Portland Cement, Portland Blast Furnace Slag Cement, Portland Pozzalana Cement, White Cement, Ready Mix Concrete, Building Products and a host of other building solutions. UltraTech Cement is branded as The Engineer's Choice.

Cement is sold under the brands ‘UltraTech, UltraTech Premium and Birla Super.’ White cement is manufactured under the brand name — ‘Birla White’, ready mix concretes under the name — ‘UltraTech Concrete’ and new age building products under the names — ‘Xtralite, Fixoblock, Seal & Dry and Readiplast’. UltraTech Building Solutions is a retail format that caters to the end consumer providing a variety of primary construction materials under one roof.

UltraTech Cement has 12 integrated plants, one clinkerisation unit, 16 grinding units, six bulk terminals, one white cement plant, two Wallcare putty plants and 101 RMC plants — spanning India, UAE, Bahrain, Bangladesh and Sri Lanka. UltraTech Cement is also India's largest exporter of cement and clinker reaching out to meet demand in countries around the Indian Ocean, Africa, Europe and the Middle East.

“CEMENT KING IN MAKING”

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Ultratech Cement Product:

Ultratech Cement is providing different kinds of products related to construction and variety of products available in the market.

They are giving the superior quality of goods which makes the construction more powerful and quality assurance is given by Ultratech Cement.

Cement products have different features as per the different requirements of customers and consumers.

Cement comes in the size of 10kg, 52kg, 50kg and 100kg bags. Many times company is providing the facility of transportation for the customers if the

order is in bulk.

PRICE EFFECT:

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While meeting with the dealer we asked certain things about Ultratech Cement. The description that he has given for it that before when the cement bag is delivered to the dealer the two things take place Trade and Non-Trade.

TRADE: In trade there is 13% VAT is added which increase the cost of one bag. This process is for 1 per bag. In trade 100 bags are come. At here it gives more benefits to dealers than Non-Trade.

NON-TRADE: In this 5% VAT is added for per bag. In this 5000 bags are there and 10/-rs per bag are also added for some reason. In this the price is approx 370/- per bag. It is costly then trade. This non-trade is generally used for govt. contract and is generally used by builders.

Generally when the dealer purchase the cement bag they have to pay 290 for one and after when they sell it 13%VAT is added to every bag and they sell it at 305/-rs in which they have got the profit of 2-5/-rs per bag.

Observations: This has shown us the price change of Ultratech Cement at various steps.

Profit earned by Ultratech Cement:

http://www.moneycontrol.com/news/results/ultratech-cement-q2-profit55strong-revenue-ebitda_1206955.html?utm_source=ref_article

UltraTech Cement beat street expectations on every parameter with the second quarter standalone net profit soaring 55.24 percent to Rs 410 crore on strong topline, operational and other income but impacted by finance, power and freight cost. Profit in the year-ago period was Rs 264.1 crore. Profit was expected at Rs 338 crore on revenue of Rs 5,150 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18. Revenue during the quarter grew by 20 percent to Rs 5,429 crore in the quarter ended September 2014 compared to Rs 4,523 crore in same quarter last year driven by higher cement sales volumes.

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Transportation of Ultratech Cement from production house to customer:

After when the cement is get manufactured in the company. The cement has been sent by train to Bhopal. When cement has came to Bhopal then it has been kept in railway godown. After that as per the dealer’s requirement it has sent to various places where customer goes and buys cement as per his requirement.

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INCOME EFFECT :

Any increase or decrease in price correspondingly decreases or increases consumers' discretionary income which, in turn, causes a lower or higher demand for the same or some other good or service.

With the recent price hikes, the all India average price which was hovering around Rs 270 for a cement bag has surged to around Rs 280-285. This is the first major hike after the monsoon.

India is world's second largest cement market after China with an overall cement making capacity of 330 million tonnes per annum. The top cement companies control around half of country's cement market.

As due to increase in salary of the customers according to time to time they generally preferred to buy Ultratech or ACC Cement as ACC is the biggest competitor of Ultratech. The cost of Ultratech Cement as well as ACC Cement is more than the other cement but it also has the best quality regarding to others. That’s why public demand hits the market of Ultratech Cement.

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SUBSTITUTION EFFECT:

An effect caused by a rise in price that induces a consumer (whose income has remained the same) to buy more of a relatively lower-priced good and less of a higher-priced one.

There are several other competitors in the market which gives the huge competition but the demand of Ultratech Cement is very high. After Ultratech the customers have a demand of ACC cement, Ambuja cement and others.

Some of the strong market players are:

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Competitors of Ultratech Cement:

SYMBOL PRICE CHANGE

Ambuja Cements Ltd. 227.60 0.15

Shree Cements Ltd. 9,130.00 25.30

ACC Ltd. 1,486.00 14.90

The Ramco Cements Ltd. 338.00 5.80

JK Lakshmi Cement Ltd. 372.55 5.00

JK Cement Ltd. 659.55 56.75

Birla Corporation Ltd. 537.00 14.20

Prism Cement Ltd. 75.70 0.60

India Cements Ltd. 113.95 2.40

Orient Cement Ltd. 145.00 3.70

Heidelberg Cement India Ltd. 90.50 2.25

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QUESTIONNAIRE:

The following questions we have asked with the dealer at Bhopal and we got the several results:

Que: According to you which cement has the best quality?Ans: As most people preferred ultratech cement. Its demand is also very high regarding other company’s cement.

Que: In which season the demand of cement is on boom?Ans: During rainy and winter season the demand of cement is very high. It is because after using the cement on construction from time to time we have to keep it wet.

Que: On what basis did you give discount to customers?Ans: If a customer purchases bags of cement in huge bulk then we can prefer discount to him. For ex- more than 100 bags at a time.

Que: Are you only the dealer of Ultratech Cement?Ans: No, as per the customer demand I have to keep all other cement also. We can’t say at one item only.

Que: The customer who purchases the cement did him pay the transportation charges, or you have to adjust it into the cement?Ans: The transportation charge is paid by the customer only. It is separate from the cement but sometimes if the demand is in huge bulk then we will provide transportation facility.

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DEALER’S INFORMATION:

We have visited to a dealer Mr. Amber Mishra who has given this information. He is the dealer of ultratech cement. He is the dealer of Ultratech, ACC, Mycem, Birla White Cement, white cement, sand and after that he is also the dealer of TMT rods, steel products.

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BIBLIOGRAPHY

http://adityabirla.com/Businesses/Profile/ultratech-cement-limited http://economictimes.indiatimes.com/ultratech-cement-ltd/stocks/companyid-3027.cms http://www.moneycontrol.com/news/results/ultratech-cement-q2-profit55strong-revenue-

ebitda_1206955.html?utm_source=ref_article articles.economictimes.indiatimes.com

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