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    Analysis of Ambuja Cements Limited

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    Jayant Lakhotia
    Ambuja Cements Limited is India's third largest cement producer and largest cement exporter. An analysis of Ambuja Cement's risk profile from 2015-2016 found a beta of 0.936772 and debt to equity ratio of zero. The optimal capital structure was determined to be 1:1 debt to equity ratio with a cost of equity of 15.93% and cost of debt of 15.90%, indicating the company is currently underleveraged.

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    Analysis of Ambuja Cements Limited

    Uploaded by

    Jayant Lakhotia
    204 views1 page
    Ambuja Cements Limited is India's third largest cement producer and largest cement exporter. An analysis of Ambuja Cement's risk profile from 2015-2016 found a beta of 0.936772 and debt to equity ratio of zero. The optimal capital structure was determined to be 1:1 debt to equity ratio with a cost of equity of 15.93% and cost of debt of 15.90%, indicating the company is currently underleveraged.

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    Analysis of Ambuja Cements Limited

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    Ambuja Cements Limited is India's third largest cement producer and largest cement exporter. An analysis of Ambuja Cement's risk profile from 2015-2016 found a beta of 0.936772 and debt to equity ratio of zero. The optimal capital structure was determined to be 1:1 debt to equity ratio with a cost of equity of 15.93% and cost of debt of 15.90%, indicating the company is currently underleveraged.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    204 views1 page

    Analysis of Ambuja Cements Limited

    Uploaded by

    Jayant Lakhotia
    Ambuja Cements Limited is India's third largest cement producer and largest cement exporter. An analysis of Ambuja Cement's risk profile from 2015-2016 found a beta of 0.936772 and debt to equity ratio of zero. The optimal capital structure was determined to be 1:1 debt to equity ratio with a cost of equity of 15.93% and cost of debt of 15.90%, indicating the company is currently underleveraged.

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    © All Rights Reserved
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    Submitted by:

    Preeti Behera (ABM12020)


    Section-G
    Individual Report Analysis of Ambuja Cements Limited:
    Ambuja Cements Limited, formerly known as Gujarat Ambuja Cement
    Limited, is a major cement producing company in India. It is Indias 3rd
    largest cement producer and the largest Exporter of cement for the nation.
    Risk profile:
    We took the data for one year from March 2015 to March 2016 to calculate
    the Beta of the company. The rating is AAA. The value of the company
    versus the Sensex stock market has been analyzed. The debt equity ratio for
    Ambuja Cements currently is Zero. The following values have been
    calculated using excel.
    Regression Beta is 0.936772
    Beta unlevered is 0.936772 since the debt equity ratio is zero.
    Capital Structure:
    The current capital structure i.e. Debt to Equity ratio is zero.
    According to our analysis, the preferred debt equity ratio is 1:1 i.e. 50%
    debt and 50% equity.
    Cost of Equity = 15.93%
    Cost of Debt = 15.90%
    Leverage:
    The current capital structure is zero. The most profitable capital structure
    according to our analysis is 1:1. Hence the company is underleveraged and
    it should be leveraged to 1:1.

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