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Presentation By

Ambuja Cement

November 19, 2003

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Indian EconomyGDP Growth - Estimates

(2003 - 2004)

1Q 2004 (A) Estimated ’03-

04

Service Sector 7.6 % 7.3 %

Industrial Sector 5.8 % 5.0 %

Construction Sector 5.7 % 6.7 %

Agriculture Sector 1.7 % 10.7 %

CMIE - Estimates

Economy expected to grow by about 7.4%

A- Actual

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Cement in India

Why ?

Indian economy will keep growing in band of - 5 - 7% annually

To achieve larger GDP growth rate Country will need more Roads,

Ports, Irrigational facilities & other Infrastructure

Housing will continue to be a major construction area

Cement as a product or technology does not suffer from obsolescence

There is no “Substitute” for Cement

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Roads - New Dimension

Major Investments in Road Development

Special Cess of Rs. 1.50 per liter on petrol and diesel

for Road Development

Total outlay over next 2/3 years - Rs. 600 Billion

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Road Development

Golden Quadrilateral- 5846 Sq.. Km

(Already Completed 1408 km)(Expected completion - June 2005)

North-South & East-West Corridors - 7300 Sq.. Km

( Already Completed 980 km) (Expected completion - 2007)

48 New Road project - 10000 Km. (Expected completion - 2006)

Government commits to 25% Concrete Roads

Expected additional consumption -3/4 mn tonnes per annum

Source : NHAI

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Housing Construction

Huge potential:

Unfulfilled demand - 33 mn units

Increasing disposable income

Younger generation aspiring to have “Own House”

Low real estate prices

Easy availability of Housing Finance - Growing over 30%

Interest Rates have come down by 700 bps in last 3 years

Monthly instalment on mortgage is now equivalent to rentals

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Cement Supply

Other side of the equation

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Cement Supply - The Dynamics

Cement Production 2003 111 mn tonnes

Maximum Clinker Production Capability (Including Sanghi) 103 mn tonnes

Current Clinker to Cement Conversion Ratio (the best in last 5 years) 1.21times

Maximum Cement Production Capability 127 mn tonnesat Conversion Ratio - 1.23

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Cement Supply - A Reality Check

No new cement capacity under construction

Lenders unwilling to fund new cement plants

Maximum Cement production capability at a

conversion ratio of 1.23 - 127 mn tonnes

Existing players going through Consolidation

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Indian Cement IndustryNext 3 Years

Financial Clinker Cement Cement Demand Year Capacity Conversion Production

Ratio at Peak 8% ( Maximum Level)

2003(A) 103 - 111 111

2004(E) 103 1.21 125 117

2005(E)* 105 1.22 128 126

2006(E)* 107 1.23 132 136

mn tonnes

A- ActualE- Estimated

* On account of some debottlenecking

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Cement Outlook

Cement demand growth should exceed 8% if the GDP is growing

at over 6 %

FY 2003-04 would be the First year in last decade to not to have

a single new plant commissioning

Next 2 years also there is no new capacity expected

Cement Demand to expected exceed Supply after a gap of several

years

All these point to good demand & better Cement Prices

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Sea terminalsCement factories

HP

Gujarat

Rajasthan

Chattisgarh WBMaharashtra

Punjab

mn tonnes 1986 2003

Capacity 0.7 14.0

Ambuja Cement

Growth of 20 times in 15 years

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Growth

With

A Sound Business Model

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Our Business Model

Own Infrastructure -Logistics Management

Strong brand & efficient distribution

Presence in prime markets

Lowest cost cement producer

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Own Infrastructure

7 Owned Cement Ships for transporting Cement by Sea

Large port in Gujarat to handle export of Cement

( 2 mn tonnes this year) & Import of Coal / Oil

3 Cement receiving terminals

190 MW of Captive Power Plants at various Cement

Plants to give reliable and cheap power

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Strong Brand

India - A bagged marketIndividual home builder - key driver of demand

Our focus :

Best quality cement

Good packaging

Logistic management - strong distribution network

Customer service

Ambuja Cement - Most preferred brand - Fetching higher realisation

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Lowest Cost Producer

FY 2003 FY 2002 Increase /

(Decrease) (%)

Power 187 179 4

Fuel 227 254 (11)

Raw material 136 133 2

Consumables 47 48 (2)

Direct cost 597 614 (3)

Rs./ tonne

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Gujarat Ambuja Cement - Shareholding

GAC ( 12 mn )

40% ACIL 60% Pvt. Equity Investors

ACC ACEL 14.4% 94% ( 17 mn ) ( 2 mn )

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Convertible Bonds

Brief terms: Date of Issuance January 2001

Coupon 1%p.a.

Maturity January 2006

Conversion Price Rs. 222

Conversion Into GDRs/ Shares

Amount US$ 100 million

Conversion Option of the

Bondholder Any time till maturity

Yield to maturity at

redemption 4.6%

Call Option of company From January 2004 till Maturity

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Gujarat Ambuja Cements Limited(Effect of Conversion)

Before After Sources of FundsShareholders’ Funds 16166 20680Deferred Tax 3053 3053Convertible Bonds 4614 -- Debt 12436 12436Total 36269 36269Application of FundsGross Fixed Assets 30239 30239Less: Depreciation 10120 10120Net Fixed Assets 20119 20119Investments in ACIL 8572 8572 Other Investments 2445 2445Net Current Assets 5133 5133Total 36269 36269

Rs. Million

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%

Tenor

Long Term 79

Short Term 21

Total 100

Mix

Rupee Debt 56

Foreign Currency Debt 44

Total 100

Debt Profile (As of 30.9.2003)

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Gujarat Ambuja Cement LimitedValuation

EV/Ton US$ 90

EV/EBIDTA 9 times

Cash Earning per Shares (CEPS) Rs. 27

Earning Per Shares (EPS) Rs. 14

Price to Cash Earning 10 times

Debt/ Equity -( on Conversion) 0.60

Debt/ EBIDTA - (on Conversion) 2.4 times

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THANK YOU