pg 28. Warren Buffett’s Not so well known skill pg 29....
Transcript of pg 28. Warren Buffett’s Not so well known skill pg 29....
1ST - 31ST December 2015 . Vol 2 Issue 9. For Private Circulation Only
pg 28. Warren Buffett’s Not so well known skill
pg 29. PhillipCapital India – Coverage Universe
3GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 20152
1st Dec 2015 Issue 8 1st Nov 2015 Issue 7
VOL 2 . ISSUE 9 . 1ST - 31ST DEC 2015
Vineet Bhatnagar- Managing Director and CEO
EDITORIAL BOARDNaveen Kulkarni, Manish Agarwalla, Kinshuk Bharti Tiwari
COVER & MAGAZINE DESIGN Chaitanya Modak, www.inhousedesign.co.in
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RESEARCH
Portfolio StrategyAnindya Bhowmik
Technicals Subodh Gupta
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Mid-Ca[s & Database Manager Deepak Agrawal
Sr. Manager – Equities Support Rosie Ferns
FOR EDITORIAL QUERIES:
PhillipCapital (India) Private Limited No. 1, 18th Floor, Urmi Estate, 95 Ganpatrao Kadam Marg, Lower Parel West, Mumbai 400 013
SALES & DISTRIBUTION Ashvin Patil, Shubhangi Agrawal, Kishor Binwal, Sidharth Agrawal, Bhavin Shah, Varun Kumar, Narayan Mulchandani
CORPORATE COMMUNICATIONS Zarine Damania
Ground View - Previous Issues
1st June 2015 Issue 4
1st Oct 2015 Issue 6 1st July 2015 Issue 5
1st Apr 2015 Issue 3
Banking, NBFCs Manish Agarwalla, Pradeep Agrawal, Paresh Jain
Consumer, Media, Telecom Naveen Kulkarni, Jubil Jain, Manoj Behera
Cement Vaibhav Agarwal
Economics Anjali Verma
Engineering, Capital Goods Jonas Bhutta, Hrishikesh Bhagat
Infrastructure & IT Services Vibhor Singhal, Deepan Kapadia
Logistics, Transportation & Midcap Vikram Suryavanshi
Midcap Amol Rao
Metals & Automobiles Dhawal Doshi, Nitesh Sharma, Yash Doshi
Agri Inputs Gauri Anand
Oil & Gas Sabri Hazarika
Pharmaceuticals Surya Patra, Mehul Sheth
3GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 20152
From the MD
Exploring NE PotentialOur last edition for CY15 focuses on unveiling the long-term potential of a very unex-
plored region in the country – North East India.
Our analyst Vaibhav Agarwal travelled extensively through this region and visited min-
istries, key officials, business leaders, contractors, house builders, and channel partners
to understand the potential of this region, especially in terms of the cement industry.
NER has largely been ignored by the centre and has participated perhaps the least in In-
dia’s growth story so far. However, with PM Modi’s seeming focus on developing NER as
a connect to the whole of South-East Asia and strengthening India’s global positioning,
GV strongly believes NER needs to be put under the eyeglass. Huge initiatives for build-
ing infrastructure in NER are already underway. Though it may not be easy to execute all
the proposed initiatives, NER is bound to grow rapidly.
The cement industry in NER is relatively new, but given the roadmap for infrastructure
creation here, it makes immense sense to explore what is in store for cement manu-
facturers. Interestingly, even though this industry is new, more than 20 cement brands
already exist in the region; more surprisingly, the market is fairly consolidated. Doing
business in the NER is a different kettle of fish with extreme reluctance towards outsid-
ers and external influence. None of the mainstream cement players have been able to
create greenfield capacities in this region yet.
This edition of GV takes you through each cement consumption vertical and explains
why an 8% annual demand growth in NER is a given. Even if 10% of the proposed
growth initiatives materialise, they will lead to huge cement consumption growth. While
NER is a long-term story, it is probably the only region in India where growth rates are
unlikely to slow down. GV has explored each opportunity and threat in detail. Please
read on to enter the mysterious exotic cloud-clad world of northeast India.
Wishing everybody a Merry Christmas and a very happy New Year!
Happy investing !
Vineet Bhatnagar
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Northeast India region (NER), India’s easternmost arm is connected to the sub-continent via a narrow sliver of a corridor squeezed between Bhutan and Bangladesh. Just like the narrow strip that connects NER with India, its relationship with the rest of the country over many decades has been tenuous at best. However, recent political commentary by the NDA government suggests that this region is likely to be in sharp focus during its tenure. Because of its inaccessibility and harsh hilly terrain, it has always retained an aura of mystery. To truly understand this largely unexplored, beautiful, and bountiful land, one has to actually spend some time there. Ground View toured NER extensively to uncover some of this region’s magic, especially from the standpoint of development potential, and especially of its relatively new cement industry. Interactions with bureaucrats, the local community, developers, contractors, and distributors revealed the region’s tremendous long-term growth potential, which is probably higher than the rest of India. Since infrastructure development will drive this progress, cement consumption in NER is likely to see strong growth. However, the dynamics of doing business in NER are not the same as the rest of India. Having had to face frequent natural calamities such as earthquakes, floods and landslides, man-made ones such as the numerous insurgencies and border conflicts, and a heavy perception of political apathy towards NER from the centre throughout India’s independent history, the people here tend to be wary of the motivations of what they perceive as outsiders. It is virtually impossible for an ‘outsider’ to set up a business here – many have tried, and even the mighty have fallen. Ground View takes you on an NER journey – not only through its picturesque cloud-clad mountains, not just to explore the potential of the cement industry, but also to the very heart and soul of the people who call this land of their own.
pg. 6 Political Commitments Recent political commentary indicates serious growth efforts are on_______________________________pg.11 NER’s cement industry & its dynamics Cement industry in NER_______________________________pg.19 Demand triggers for cement in NER Infrastructure growth agenda for NER will help the cement industry in the long term_______________________________pg.27 The Conclusion... What’s in store for cement manufacturers in NER_______________________________
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IN DEPTH
BY VAIBHAV AGARWAL
NORTH-EAST INDIA
The famous Elephant Falls near Shillong
BUILDING THE LAST FRONTIER
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NER and India’s troubled relationship – A tragic tale of unnecessary alienationWhile India embarked on its difficult yet steady path towards progress and growth, NER remained largely ignored – its economy kept collapsing, it faced huge unemployment, and power supply was non-existent in many parts – even until as late as 2010 – this, in the region that holds India’s highest hydroelectric power potential and some of the highest literacy rates. Insurgent groups wreaked havoc, often extracting money from people and extracting ‘protection tax’ from local businesses. While some of these groups demand a separate state, others seek regional autonomy – some extreme groups even want complete independence. The relationship between these states and the central government, between the native tribal people and migrants from other parts of India, between its various factions – have been tense. It is widely believed in this region that suc-cessive political regimes in India have largely ignored NER due to the limited influence of its vote-bank – however, the centre has viewed it as challenging to govern due to the many separatist movements.
Newertheless, efforts have been on for a while now to create a more inclusive environment for NER withing India’s development framework. The North Eastern Council (NEC), constituted in 1971, is the acting agency for the develop-ment of the eight states. DoNER was set up in September 2001 with a view to expedite development in NER with governance and in-dependence.PM Narendra Modi has remained steadfast in his commitment towards the devel-opment of NER – in his maiden budget, he allo-cated Rs 530bn toward NER while promising 14 railway lines, a sports university in Manipur, six agriculture colleges, Ishan Uday (scholarships for 10,000 students), and 18 FM stations.
Recent political commentary indicates serious growth efforts
P O L I T I C A L C O M M I T M E N T S
Recently, Modi’s government made a deal with Bangladesh to develop a link between Tripura and Chittagong, thus increasing flow of products between NER and the
rest of the country. In his Mann Ki Baat aired in July 2015 Modi had said “Is it possible to develop the northeast while sitting in Delhi? No. Officials will visit and see how it is to be done.”Many an-nouncements have already been made by India’s transport minister, Nitin Gadkari, for developing roads in NER. Union Minister of Urban Develop-ment, Venkaiah Naidu, said recently at a conclave, “The people of northeast are the first to see the rising sun in India. There is no reason why we should not rise to the occasion to help the north-east reach its optimum potential.”
Minister Jitendra Singh from the Ministry of Devel-opment of North Eastern Region (DoNER) has invit-ed women entrepreneurs from across the country to invest in NER and to take the lead in developing the region as an industrial hub. Mahesh Sharma (Minster for Culture, Tourism and Civil Aviation) has said that the government was giving a big push to tourism in the country, with a special focus on tap-ping the huge potential of the NER. Assam’s Chief Minister Tarun Gogoi has urged DoNER to publish a white paper giving details of the funds it has re-leased over the last 18 months for the development of NER. He also recently said, “Since DoNER has (now) come into being, NER should not be subject-ed to such shoddy treatment like the one meted out to the region by the present dispensation at the centre”.
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Need for Ground View on NERThis is imperative, given the government’s increasing focus on this region. It definitely calls for a visit and a reality
check. NER has seen many cement plants coming up since 2005; few are still in the pipeline. Even mainstream players
such as Dalmia Bharat have shown interest in this region and entered NER through acquisitions, which were considered
to be risky bets by peers and investors but yielding returns now. To evaluate opportunities and threats in NER, GV visit-
ed ministries, industries, infrastructure companies, contractors, cement distributors, factory sites, cities, and villages.
Products displayed at Assam Secretariat proudly declare ‘Made in Assam”
A board at the Assam Secretariat featuring NEIPP 2007
NER’s strategic fit
Road from NER to Thailand
NER: A brief
NER comprises the contigu-ous ‘seven sister’ states of Arunachal Pradesh,
Assam, Manipur, Meghalaya, Mizoram, Na-galand, and Tripura, plus the Himalayan state of Sikkim. Sikkim was annexed to the Indian union through a referendum in 1975 and was recognized as part of NER in the 1990s.
Demographics: Largest cities according to population census 2011 are Guwahati (As-sam), Agartala (Tripura), Shillong (Meghalaya), Aizawl (Mizoram), Imphal (Manipur), Silchar (Assam), Dibrugarh (Assam), Nagaon (Assam), Jorhat (Assam), Dimapur (Nagaland), Gangtok (Sikkim) and Kohima (Nagaland). NER houses 3.8% of India’s total population and is allot-ted 25 out of a total of 543 seats in the Lok Sabha (or 4.6% of the total seats).According to census data, the total literacy rate of the pop-ulation in the region is about 69%with female literacy at 62%– higher than the country’s av-erage. There are variations in the literacy rates among different states – Assam and Arunachal Pradeshare below the national average while Mizoram and Tripura top the list in India.
Strategic importance: It is vital to India’s de-fence architecture with a fairly heavy deploy-ment – it shares borders with Bangladesh, Myanmar, Nepal, Bhutan, and south-western China. NER is India’s land bridge to Myanmar and a gateway to Southeast Asia.
Natural resources: The region is endowed with bio-diversity, hydro-potential, oil and gas, coal, limestone, bamboo, and forests. It is ideally suited to produce a whole range of plantation crops, spices, fruit, flowers, and herbs – much of which can be processed and exported too.
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Most of the limestone reserves in NER are in Jaintia Hills district in Meghalaya; hence, almost all of the cement plants in the region are located here. Due to the difficult and hilly terrain where many places are inaccessible, the people have developed a tendency to resolve their problems without expecting outside intervention. In mining and related activities, external intervention is rarely seen and is not well tolerated.
For the cement industry, this means that all fuel-resource supplies are through the local community. In fact, it’s a common (and amusing) sight to find small piles of coal stacked at intervals besides the road across the hilly terrain. While there are many mining and crushing sites across NER, this region has virtually no external fuel supplies – hence the dependency risk on locals is huge. In certain cases, where limestone mining reserves are inadequate or not of cement-grade quality, few cement manufactur-ers choose to buy limestone from locals who own such limestone mines.
Adequate limestone and coal – the lifeblood for cement industry
A local crushing plant for limestone and coal
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TOP: Mined coal stacked in piles by locals Bottom Three: View of the captive mines of a cement plant.
Natural waterfalls are a rare site in a limestone mine
Doing business in NERThough NER is lucrative, doing business here is not easy – the people tend to be mistrust-ful of ‘outsiders’. One has to belong to this region or else it becomes practically impos-sible to conduct any business, let alone suc-ceed. Most successful business organizations in NER were started and are run by locals. This is visible in the case of the cement industry too. All cement plants have been set up by local business houses; outsiders have not been able to set up any greenfield projects so far. There are numerous examples of big business houses attempting to enter NER and not being able to succeed (such as UltraTech and Holcim Group). The ecology, topography, and the cultural ecosystem of the region makes it very different – it is virtually impossible for an ‘outsider’ to try to enter it. While Dalmia Bharat has established itself in this region (through acquisitions), it too faced enormous difficulties when it ini-tially ventured into NER, for quite some time.
NER: Unique characteristics
Mainstreaming NE states into India’s econ-omy is a formidable challenge. These states have some unique economic problems aris-ing out of remoteness and poor connectivity, hilly and often inhospitable terrain, poor infrastructure, sparse population density, shallow markets, inadequate administrative capacity, low skill endowment, and a law and order situation frequently threatened by insurgency.
People are conservative: Although emerg-ing lifestyles (at least in urban / semi-urban areas) are veering towards the modern, most people here remain conservative. They do not appreciate outside interference, which they perceive as ‘invasive’. For an outside business to succeed here, it is very impor-tant to connect to the local people – this is perhaps the reason why Dalmia Bharat chose Mary Kom as its brand ambassador.
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Top: Mary Kom, Brand ambassador for Dalmia Cement
Below Top: In many parts of Meghalaya, Bangladesh’s mobile networks can be easily caught
Middle: The famous Kamakhya Devi Temple at Guwahati
Bottom: Bangladesh, visible from the hills of Meghalaya
Language barriers persist, but it is manageable: Like other regions in India, language barrier exists. NER has several active dialects in use, but very few are known to the outside world. Almost 15 ‘main’ languages are spoken in NER – Assamese, Nepali, Manipuri or Meiteilon, Kokborok or Tripuri, Nagamese, Mizo, Khasi, Garo, Bodo, Karbi, Dimasa, Mishing and Apatani, Bishnupriya Manipuri, and Rabha. Among the seven states, Assamese and Manipuri lan-guages have been included in the eight schedule of the Indian constitution. But, within these main languages, there are many dialects, which are yet unknown (some are endangered). Since a lot of people from Bihar, West Bengal, and Bangladesh have settled in this region, one can get by speaking Hindi and Benga-li, especially in Assam. But for more insular and isolated states, such as Meghalaya where Khasi and Garo are the most spoken languages, this may not work. Bangladesh, where Bengali is the official language, is so close to some parts of Meghalaya that its mobile networks are visible in the manual selection mode of mobile handsets in this region.
God-fearing people: People here are god fearing – one possi-ble reason for this is the frequent natural calamities that they have to deal with such as floods and earthquakes. These calamities also act as barriers to what they perceive to be the ‘outside’ world and ‘outsiders’, especially for the businesses that are eager to venture into this region.
Sense of belonging is huge: Most of the people here are very attached to their lands, their villages, their towns – whatever part of NER they belong to. It is very rare to see people leaving their homes and states for higher income and better lifestyles – something that is becoming increasingly common across all parts of India. People here seem to be happier to remain close to the place that they were born in – this is not to say that they do not have aspirations – they do. However, their aspirations do not appear to be as high as in other regions in India. The people here appear more satisfied with their life and lifestyle – they seem self-contained and happy to grow within the region rather than without. Although people here do not have a closed mind-set exactly, making them accept new ideas is quite challenging.
People seem unsure about their inclusion in India’s growth: People here have their own reservations about being a part of India and yet being left to their own devices for years, largely ignored by successive po-litical regimes. They feel worried about their region’s inclusion in India’s growth. While politics is to blame, it is also because of the sheer physical isolation of NER, and also due to the conservative outlook of the people here and their attachment to their land –this remains a key bottleneck to growth. It is probably the reason why many ministers have increased their visits to NER, largely to reiterate the centre’s commitment to this region.
“NER is almost like a mini country in itself – its dynamics are very different from any other region in India.”
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Cement industry in NER
N E R ’ S C E M E N T I N D U S T R Y & I T S D Y N A M I C S
Today, cement is considered one of the vital industries in NER, by locals and
the government. It is surprising that nearly 20 cement brands exist in this
region. In terms of sheer number of distinct brands, it would probably be
much higher than any other region in India with similar demographics.
Interestingly, NER’s cement industry is not too old. While some smaller
plants started coming up in 1999, Star Cement, which started in 2005, is
believed to be the first large cement manufacturing plant in this region.
Before this, all cement for this region was imported from other parts of India
or from other countries. After Star Cement’s entry, multiple cement brands
sprang up in NER, but almost all these cement ventures were started by
local business houses. Dalmia Bharat is the only outsider to venture into
this region and succeed — but Dalmia did so through an acquisition even
though it had initially planned a greenfield plant.
Star Cement’s cement plant in Lumnshnong in Meghalaya –most efficient in NER
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Practically impossible for an outsider to set up a
greenfield plant
Despite multiple incentives to setup Greenfield plants
in NER, it is practically impossible for an outsider
to do this. Many describe the effort as nightmarish.
There are several instances of cement manufacturers
trying to set up greenfield capacities here and failing
miserably. Even big boys such as UltraTech and Holcim
have attempted to venture into this region but have
not yet tasted success. None of the mainstream
cement manufacturers (barring Dalmia Bharat) have
any manufacturing facilities in NER. Since these
majors have not succeeded in greenfield plants, they
are now determined to establish themselves in this
region through acquisitions and alliance partners. A
few are actively scouting deals or partnerships with
existing cement manufacturers of NER. Dalmia Bharat
initially planned a greenfield, but faced many hurdles.
Changing tacks, it made two sizeable acquisitions –
Calcom Cement and Adhunik Cement – and is now
well established in NER.
Incumbents are in a golden space
• High social and geographic entry barrier: It is
practically impossible for an outsider to enter this
region without local support. Moreover, the terrain
is difficult.
• Resource supply is committed, assuming no local
issues: Most of the land in the hills is owned by the
community, not the states. Plants located in states
falling under the Schedule-6 (areas from Assam,
Meghalaya, Tripura and Mizoram) do not fall under
the purview of recent mining acts. Hence, there is no
risk that cement players have to surrender limestone
mines or reserves. Almost all cement plants in NER
are based out of Meghalaya (barring few plants in
Assam of which most are grinding units) and all the
plants in this state enjoy Schedule-6 benefits. All fuel
supplies are also through local sources only and the
only threat to raw material sourcing is local agitation.
Falling under Schedule 6, Star Cement management
believes that the cement industry in Meghalaya is not
liable to pay DMF, but it is liable to pay royalty on
limestone (like any other region).
• A highly brand conscious market: Since NER is a
brand-conscious market, it will generally mean higher
price premium in realisations.
• Limited scalability means NER producers are in
golden space: NER’s growth potential in the long
term seems extremely strong. Given that NER’s
landscape offers limited scalability for cement
plants (scope largely only for existing players), the
incumbents are probably in a golden space – they
are likely to see sustainable earnings CAGR in the
medium to long term.
Structure of NER’s cement industry
Almost all integrated cement manufacturers in NER are
based in Meghalaya. More interestingly, all these plants
are on a single stretch of road – Jaintia Hills (spread
across 40-50km) barring a couple of plants that are a
bit ahead (another 40-50km). Meghalaya is the heart of
the cement industry and on the Jainitia Hills road, there
is nothing other than cement plants. The only notable
plant that is not located in this belt is the vintage plant
of Mawluh Chera – it was a government-owned plant in
Cherrapunji that is now shut for over two years. Set up in
the early 1960s, Mawluh Chera is the oldest Public Sector
Undertaking (PSU) in Meghalaya and its only state-owned
cement plant.
Details of the northeast industrial and investment promotion policy 2007• All new and existing units that go for substantial expansions,
and which begin commercial production within a 10-year period from the date of notification of NEIIPP, 2007, will be eligible for incentives for a period of ten years from the date of commence-ment of commercial production.
• Incentives available to all industrial units, new and existing, on substantial expansions located anywhere in NER. The distinction between ‘thrust’ and ‘non-thrust’ industries made in NEIP 1997 was discontinued.
• Incentives on substantial expansion will be given to units ef-fecting an increase by not less than 25% in value of fixed capital investment in plant and machinery for the purpose of expan-sion of capacity/modernization and diversification.
• 100% excise duty exemption on finished products made in NER.• 100% income tax exemption.• Capital Investment Subsidy for investment in plants and ma-
chinery at 30% capped at Rs300mn. For grant of Capital Invest-ment Subsidy higher than Rs15mn, an Empowered Committee will approve it and Union Cabinet consideration and approval will also be required.
• Interest subsidy at 3% on working capital loan.• New and existing industrial units are eligible for reimburse-
ment of 100% insurance premiumon substantial expansions.
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View of the closed Mawluh Cherra plant at Cherrapunji
Motivations of local entrepreneurs setting up cement plants
Given the various disadvantages that NER faces (geographical
isolation, transportation bottlenecks, small market size, low
investments and virtual absence of private sector),the central
and state governments announced various incentive and subsidy
schemes to attract investments and capital into the region. The first
such instance was the Transport Subsidy Scheme in 1971. This scheme
was introduced to develop industrialisation in the remote, hilly, and
inaccessible areas by providing subsidy in the transportation cost
incurred by industrial units so that they could compete with other
similar industries that were better off geographically. Subsequently,
other incentive plans such as NEIP 1997 and North East Industrial
and Investment Promotion Policy (NEIIPP) in 2007 (which itself
was an extension of NEIP, 1997) were also announced to attract
investments from industries in NER.
Given these benefits, many local business entrepreneurs who owned
mining lands contemplated venturing into cement manufacturing.
Star Cement was among the first to take initiative and others
followed. More interestingly, almost all of these plants were initially
setup only to cash in on incentives with a plan of seeking a lucrative
exit later. Today, Star Cement, Dalmia Bharat, and TopCem (three
largest) are the only players that appear committed to remain in
the business of cement manufacturing for the long term. Although
others may yet continue, it is too premature to assume that they will
make their mark in the region. It does appear that all other brands /
cement manufacturers are available for sale.
If plants are available, then why aren’t deals happening?
Despite multiple plants being available for sale, barring Dalmia’s
acquisition of Calcom Cement and Adhunik Cement, no other deal
has gone through. There are multiple reasons for this:
• Like in many failed consolidation discussions, the sellers’
expectations are too high.
• Logistical connection between NER and other regions of India
is not very strong. Many manufacturers do not want to venture
into this region, as they find virtually no synergies with their
operations in other regions.
• For many mainstream manufacturers, it has proven tough
to monitor developments in NER and seek an entry, given
the unique nature of this region. Existing ways in which raw
material is available, and the nature of fuel-supply agreements
with locals, did not provide comfort to most these cement
manufacturers.
• Mainstream cement manufacturers who do not want to deploy
substantial capital into the region sought entry by becoming
marketing partners or alliance partners of local cement
manufacturers in NER – these manufacturers have largely
rejected this approach.
• Its current market size – around 7mn tonnes per annum – does
not appeal to most mainstream cement companies.
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A look at various cement manufacturers and cement brands visible in NER
Star Cement – Star Cement is among the oldest and largest ce-ment manufacturer in NER. Its cur-rent capacity is about 3mn tonnes. It has a state of art integrated setup in Lumshnong, Meghalaya, (1.4mn TPA) and a split-grinding unit in Sonapur, Assam (1.6mn TPA). It is also considered to be the most cost efficient producer of cement in NER.
TopCem Cement – This is a product of Meghalaya Cements. It is an integrated cement plant in Megha-laya with clinkerisation capacity of 2,600TPD and 3600TPD of cement. It has a grinding unit in Amingaon, Guwahati, Assam. This is the third largest brand in NER.
Dalmia Cement – Dalmia Bharat ventured into NER by acquiring Calcom Cement and Adhunik Cement. It is currently the largest cement capacity in NER (3.6mn TPA). While Adhunik’s setup is in Meghalaya, Calcom has recently commissioned an integrated setup in Assam. Dalmia Bharat sells its produce under its national brand Dalmia Cement. It also owns one of the premium product lines Dal-mia HALC Cement in this region.
Amrit Cement Industries – Its current capacity is ~1mn TPA and it has long-term ambitions to increase its size to 3mn tonnes in NER and set up split grinding units in Bihar. This company also wants to set up an integrated ce-ment unit in neighbouring country Nepal. It sells cement under the brand name Amrit Cement.
Taj Cement – This is a product of Hill Cement Company, which has and integrated site at Meghalaya. It started in 2007 and has plans to scale up its capacity to 1mn TPA.
Best Cement – A product of JUD Cements, which has an integrated setup in Meghalaya with a capacity of 500,000TPA. It has ambitions to scale this up to 2mn TPA
Magic Cement – This is the flagship product of RNB Group (Meghalaya).
Max Cement – Promoted by Green Valley Industries, it is a local brand with an integrated ca-pacity of 1mn TPA in Meghalaya.
Surya Gold Cement - Surya Gold
is a grinding setup in Assam
and is the first to introduce the
concept of bulk cement to NER.
It sells products under Surya Gold
Cement and Surya Concretec.
Barak Valley Cement Ltd – This is
a small listed cement manufacturer
(400,000TPA capacity) based in
NER. Its sells its products under the
brand Valley Strong Cement. This is
the farthest cement site in Megha-
laya – about 70km ahead of Star
Cement’s Meghalaya site.
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Goldstone Cement - Goldstone cement is an upcoming plant in Meghalaya with an integrated setup. The plant is likely to be operational in next 12-18 months. Scalability of this plant (as per sources) is likely to be upto 2.5mn TPA.
Raksha Cements – This is a small integrated unit – just 60,000 TPA capacity – based in Assam. Barring Calcom (Dalmia Bharat’s Assam unit), Raksha Cement is one of the few NER cement manufacturers with an integrated setup in Assam. It sells under the brand Raksha Cement.
Prithvi Cement - This unit is locat-ed in Lanka, Assam (near Dalmia Bharat’s Assam unit). It is a small cement manufacturer.
Purvanchal Infra & Industries: Yet another brand present in NER.
Cherra Cement: - This is the oldest cement brand in NER and a product of Mawluh Cherra Cement. This plant is now shut down, and barring a few hoard-ings advertisements around the plant area in Cherrapunji, its presence is virtually absent.
Virgo Cement - This is anoth-er cement brand in NER that is now virtually absent. It is a 600 TPD cement-manufacturing unit located in Damas, East Garo Hills District, Meghalaya. In June 2015, five suspected AMEF militants lobbed two IED bombs inside this factory and fled into darkness un-der the cover of open fire. There were no casualties, but the plant was partially damaged. The belief is that the attack was because of rejected extortion demands.
Consolidated markets
despite multiple brandsWhile there are nearly 20 cement brands in NER, it is still
a fairly consolidated market. Out of the installed capacity
of ~11mn TPA, the top-3 cement manufacturers – Dalmia
Bharat, Star Cement and TopCem – have almost 70% share.
Small cement manufacturers are hardly left with any choice
but to follow the larger cement manufacturers. Star Cement,
Dalmia Bharat and TopCem remain the tier-1 brands in this
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UltraTech Cement - It brings cement to NER from its Bangla-desh facility (it has a small grinding setup in Bangladesh of 500,000 TPA). Ambuja Cement - Ambuja supplies ce-
ment to NER through its Farrakka plant in West Bengal, but in minuscule quantities.
Lafarge - Lafarge is also present in this region to a small extent, but interesting-ly, it is the only cement capacity to have a fully integrated facility in Bangladesh. Given the scarcity of limestone in Bang-ladesh, Lafarge Bangladesh has laid a 17km-long conveyor belt that runs from Meghalaya to Lafarge’s cement plant in Bangladesh to supply crushed limestone to its integrated facility.
Crown Cement - This is a product of M.I. Cement Factory, Bangladesh. It exports marginal quantities of its produce into NER. Its capacity in Bangladesh is ~1.7mn TPA.
Rhino Cement - This is a new brand and believed to be intro-duced in NER by a local cement manufacturer - some large hoard-ings of this brand were seen at a couple of places in Guwahati. Interestingly, Rhino Cement is also a brand owned by an African Major - Arm Cement. Branding of both these brands appear similar and hence a possible tie-up of this local manufacturer with Afri-can giant cannot be ruled out.
Dragon Cement – This is a prod-uct of Dungsam Cement Corpo-ration, Bhutan. It is an integrated cement plant located 150km north-west of Guwahati with an installed capacity of ~1.3mn TPA and exports
minor quantities to NER.
Views of Lafarge’s conveyor belt that runs in from Meghalaya to Bangladesh
Other than local brands, large cement majors also make their presence felt
17GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201516
Other than local brands, large cement majors also make their presence felt
Branding and advertising in NERThough there are only three top brands, amusingly, all cement manufac-turers tend to indulge in heavy advertising and branding – literally every second hoarding is a cement manufacturer’s. NER manufacturers have practically explored all kinds of local platforms to advertise their brands, especially the top three manufacturers. The branding campaigns are heavy on the local thrust with some unique attempts to connect with customers. Some such attempts include:
Surrogate branding
Star Cement initiated the concept of surrogate branding in NER – its aim was to increase visibility in places that its direct/indirect customers frequent (such as pan shops, dhabas, restaurants, plumbing shops, paint shops).
Radio advertising
Radio advertisements seems to be an excellent initiative to reach con-sumers, especially in underdeveloped and uncomfortable terrains such as NER – here, the reach of radio advertisements is much higher than other visual modes. This is a unique to this region – it is rare to hear ce-ment advertisements on radios in other regions of India.
Campaigns for dealers / user segments and the general public
Large cement companies in NER indulge in advertising and branding practices that involve a lot of participation from its end users – especially by regional leaders such as Star Cement. For example, during the Durga Pooja Mahotsav the company organised campaigns in which it offered an all-expenses-paid trip to Kolkata (to participate in festivities there) for the world’s largest and biggest durga idol. It also offered additional prizes such as tablets, smartphones, silver coins, and cash prizes. These kind of advertisements and branding exercises are very well appreciated by the audience in NER, where even a small token of appreciation acts as a big morale booster.
Bhupendra Hazarika at an event organized by Star Cement
19GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201518
TopCem advertises heavily just outside Star Cement’s local head of-fice in Guwahati, indicating tough competition among tier-1 brands
Heavy branding in and around district and state roads and national highwaysAcross roads, advertisements of cement brands almost overpower all others. Even in the remotest roads, for exam-
ple the road from Shillong to Cherrapunji, the only advertisements those were visible were cement brands.
19GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201518
Infrastructure growth agenda for NER will help the cement industry in the long term
D E M A N D T R I G G E R S F O R C E M E N T I N N E R
Both central and state governments have
been consistently announcing infrastruc-
ture development projects for NER.
Numerous comments by bureaucrats,
ministers, business leaders, local entrepreneurs,
distributors, and channel partners suggest robust
infrastructure initiatives in NER are underway,
which will ultimately trigger growth for cement
consumption. Initiatives on infrastructure develop-
ment in the region look positive with growth like-
ly across all infrastructure verticals including rail-
ways, roads, ports, inland waterways, airports, and
hydropower. NER also remains a focus area for PM
Modi – he has announced several initiatives. Any
project in this region will have a material impact
its growth because the base is too low. Here are
a few details:
Housing:
Given that NER is an earthquake-sensitive re-
gion, most houses are made of material other
than concrete – such as bamboo, mud, and
bricks – they are typically called ‘Assam-type
houses’.
Census data shows that only about 3% of hous-
es in Assam (NER’s largest state) are concrete
with concrete roofs; 11% (nearly 700,000) are
classified as not liveable. This suggests huge
potential housing demand in the long term.
Even if we consider rehabilitation of these
non-liveable houses and their conversion into
concrete (of say 200 sq. ft. area), the potential is
3.5mn tonnes of incremental cement demand.
Considering the long-term potential of con-
version of 6mn houses to concrete the overall
potential for cement is as high as 30mn tonnes
(assuming only 200 sq. ft. houses).
While theoretically these numbers look attrac-
tive, the conversion to concrete is going to be
a very long-term process. However, even if just
500,000 tonnes p.a. of cement is consumed
from the houses that are supposed to convert
to concrete, it will translate into +8% cement
demand growth in NER.
Assam-type houses
21GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201520
NER is essentially hilly terrain – so it is amazing to
see that most of the highways are good quality.
In certain areas, the roads are even better than
our metros. Transport minister Nitin Gadkari re-
cently announced a 10,000km road network for
NER at a cost of Rs500bn. Though road projects
typically do not consume large quantities of ce-
ment, because of NER’s rough and hilly terrain,
cement consumption here is likely to be higher.
Due to frequent landslides, cement consumption
will also include RCC culverts, curves, bridges,
and road borders. For every 1,000km two-lane
road, the benchmark consumption is about 1mn
tonnes of cement. Theoretically, this will trans-
late to 10mn tonnes of demand, assuming 100%
cemented roads. However, even if 20% of this
network is cemented, it will translate into 2mn
tonnes of incremental cement demand and will
boost demand CAGR by +10% over the next few
years. Going by the announcements made by
central and NER’s state governments, expecta-
tions of huge road project development in NER
seem realistic.
Road infrastructure development
The governments (central and state) intend
to:
• Connect all state capitals in NER with im-
proved / upgraded national highways
• Provide connectivity to all district head-
quarters through improved state roads
• Improve connectivity with neighbouring
countries
• Provide road connectivity to backward and
remote areas of NER
• Improve some of the important roads of
strategic importance within NER
Specific emphasis on development of roads
in Arunachal Pradesh
Arunachal Pradesh has the lowest density of
roads among NERstates. It shares over 1000km
of sensitive border with China and Myanmar
and has vast potential for hydropower gen-
eration. Considering this, the trans-Arunachal
highway network of about 900km needs to be
upgraded urgently. This will also lead to mate-
rial demand for cement.
Urgent need to improve bridges in NER
NER consistently suffers from lack of inter-re-
gional connectivity. There has been consistent
demand to provide increased connectivity be-
tween north and south Assam by constructing
bridges on the river Brahmaputra at various lo-
cations such as (1) north and south Guwahati,
(2) Jorhat and north Lakhimpur via Majuli, (3)
Dhola and Sadia, and (4) Dhubri to Phulbari in
Meghalaya.
Roads in NER will be a key driver for cement
demand. The base of cement consumption in
NER is so low that any material demand from
such projects will look significant. Due to the
nature of the terrain, road projects could lead
to higher cement consumption. Mr Gadkari
seems committed to building quality infrastruc-
ture in NER. This region may generate higher
cement demand from road projects vs. other
parts of India, at least in the medium term.
A construction site in NER
21GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201520
Central and state governments have ambitious plans to improve rail connectivity in NER. Though this may not lead to huge demand (railway projects do not tend to consume high quantities of cement vs. road projects), any material in-crease in demand is positive for the industry due to the low base. De-velopment of rail network will mean facilitation of trade and commerce in this region, addressing one of the major problems for long-term growth – poor connectivity.
The vision of the railways is to more than double the railway connectivi-ty in NER by the end of 2020
Connectivity issues in NER will be significantly addressed with im-proving railway connectivity. A sig-nificant boost to trade and com-merce is likely, though it is difficult to quantify demand for cement. Improving railway connectivity will bring a structural long-term change in the economics of doing busi-ness in NER. This will be more of a longer term positive rather than an immediate positive for the cement industry.
Development of railwaysYear / kms Length : Broad
Gauge (BG)Length : Meter
Gauge (MG)Length: Narrow
Gauge (NG)Total
1990 772.47 2986.56 87.48 3846.51
2010 2775.72 1389.80 87.48 4253
2020 5806.14 50* 87.48* 5943.62
*50 km MG & 87.48 km NG are world heritage sites
The vision of the railways is to more than double the railway connectivity in NER by the end of 2020
1990 2010 Vision 2020
1. BG (broad gauge) lines only uptoGuwahati. MG (meter gauge) lines beyond Guwahati
BGLine upto Dibrugarh and Tinsukia.Gauge conversion of Guwahati – Tinsukia – Di-brugarh completed including Furkating – Jorhat – Mariani and Simaluguri – Sibsagar – Moranhat branch lines
All state capitals on BG
2. Only one routebetween New Jalpaiguri and Guwahati
A complete alternative BG route from New Jalpaiguri to Guwahati commissioned by gauge conversion of Siliguri-New Jalpaiguri-New Bongaigaon MG line and Jogighopa – Guwahati new line
A third alternative BG route fromNew Maynaguri to Jo-gighopa will be commis-sioned
3. Mostly single BG line beyond Katihar and Malda.
Rajdhani Express introduced – Guwahati-Delhi takes 28 hours.
Doubling of New Jalpaiguri-Samuktala complete
4. Most express trains take 40-48 hours from Delhi to Guwahati
Dibrugarh/Tinsukia to Delhi – 40 hours
The entire Barak Valleyon BG network
5. Time taken to reachDibrugarh/Tinsukia from Delhi– up to 65 hours
Second railway bridge across river Brahmaputra (rail-cum-road) at Jogighopa
Third Railway Bridge across River Brahmaputra – rail-cum-road bridge at Bogibeel
6. Only one railway bridge across Brahmaputra (rail-cum-road bridge at Saraighat, Guwahati)
Capital of Tripura (Agartala) connected by MG line
Entire north bank of Brahmaputra will be on BG network and get connected to the south bank at Dibru-garh through Bogibee
7. No connectivity to capital city of any state except Assam
Comparative scenario of rail connectivity in NER in 1990 vs. 2010 and 2020
23GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201522
R A I L W A Y M A P O F N O R T H E A S T F R O N T I E R R A I L W A Y
R A I L W A Y M A P O F A S S A M
23GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201522
Railw
ay m
ap o
f Aru
nach
al P
rade
shRa
ilway
map
of M
anip
ur
R A I L W A Y M A P O F M A N I P U R
R A I L W A Y M A P O F A R U N A C H A L P R A D E S H
25GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201524
Air connectivity to NER is also under revival.
Guwahati remains the only major commercial hub,
which is quite well connected to the rest of India.
Apart from Guwahati, air connectivity to NER
is poor or below average. Though the average
number of departures per week has improved to
nearly 500 from 226 in 2001, there is tremendous
scope to improve air connectivity to the region.
DoNER has listed the following reasons for a
revival and upgradation of air connectivity in NER.
1. Terrain makes air connectivity not just an option
for travel, but an absolute necessity.
2. Road and railways are highly capital intensive.
Development of air infrastructure is lesser so.
3. Improvement in air connectivity will help NER
gear up on agriculture, tourism, and services.
4. Improved air connectivity will also facilitate
movement of perishable agro commodities.
More so, quick and reliable movement of cargo
is necessary to find markets within and outside
NER for such commodities.
5. Cities such as Shillong can be developed
as educational hubs in the longer term and
improved air connectivity will facilitate this
initiative.
6. NER remains threatened by natural disasters.
Improving air connectivity will mean better
evacuation mechanism for patients during
natural disasters.
7. Improving air connectivity also has strategic
reasons – to protect NER from international
threats and opening up the region, especially
to the ASEAN countries.
There are 11 operational airports in NER, 12 non-
operational airfields, and three greenfield projects
are under evaluation or execution. For the time
being, revival of existing airports remains a priority
Aviation opportunity in
NER
A Hydro-Power construction site in NER
and major new greenfield announcements
may not happen. Governments are already
considering developmental plans for non-
operational airports in Arunachal Pradesh,
Tripura, and Meghalaya. Ground View’s
checks also suggest that around five
airfields are being developed in Arunachal
Pradesh, especially as an Air Force base. All
these developments will definitely add to
the cement demand in the region. However,
more importantly, upgradation and revival
of air connectivity to NER will significantly
help it to attract investment and will be
structurally positive in the long term.
25GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201524
Hydropower projects in NER
State Identified capacity (MW) Capacity Developed (MW) Capacity under development Capacity yet to be developed
Total (MW) (MW) % of Total (MW) % of Total (MW) % of Total
Arunachal Pradesh 50,328 405 0.8 2,710 5.4 47,213 93.8
Assam 680 375 55.1 0 0.0 305 44.9
Manipur 1,784 105 5.9 0 0.0 1,679 94.1
Meghalaya 2,394 282 11.8 40 1.7 2,072 86.5
Mizoram 2,196 0 0.0 60 2.7 2,136 97.3
Nagaland 1,574 75 4.8 0 0.0 1,499 95.2
Sikkim 4,286 669 15.6 2,322 54.2 1,295 30.2
Tripura 15 0 0.0 0 0.0 15 100.0
Total (NER) 63,257 1,911 3.0 5,132 8.1 56,214 88.9
Potential of hydropower projects in NER
Among infrastructure projects, the cement-consumption inten-sity in hydropower projects is the highest. For every 1000MW of a hydropower project, the consumption of cement is ~1.5mn tonnes. A hydropower project has the potential to consume 10,000-15,000 (~200,000-300,000 bags) of cement per day of construction.
Across the country, NER has the maximumpotential for hydro-power capacities and most of this is in Arunachal Pradesh. The table below highlights the potential for development.
In NER, 89% of hydropower projects are yet to be devel-
oped. If they are implemented, they will lead to a whop-
ping cement consumption of ~90mn tonnes.
However, interactions with few developers construct-
ing these hydropower plants suggest numerous bot-
tlenecks such as:
• Non-availability / delay in environment and / or forest
clearance
• Delay in private land acquisition
• Inter-state disputes
• Law and order / militancy problems
• Provision of resettlement and rehabilitation of the pop-
ulation dislocated because of such projects.
• Non-provision of employment for project-affected
families
• Concerns regard the protection of aquatic life
The region is unlikely to see huge activity in hydropower
in the near term. However, even if say 5% of the pro-
posed or identified projects are executed in the medium
term, it will boost cement demand significantly. The long-
term potential remains exciting.
Agitation by locals in NER against a hydropower project
27GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201526
Inland water transport (IWT)
India has about 14,500km of
navigable and potentially navigable
waterways of which around 55%
are used regularly. NER’s inland
waterways are classified as
National Waterway 2. This route is
established since September 1988
across the Sadiya-Dhubri stretch of
the Brahmaputra River and is the
second-largest inland waterway of
the country at 891km –a 121km
stretch of the Barak River is already
under consideration as NW6.
NER has identified a 1,566km
stretch of tributaries of the
Brahmaputra and Barak rivers as
state waterways (feeder routes).
Kaladan multi-nodal transport
project will also provide alternate
route through Myanmar to NER.
Moreover, river Brahmaputra offers
immense scope for development of
river cruise and eco-tourism in NER.
Development of these waterways
will significantly boost internal
transportation within NER and will
emerge as an economical logistic
support for the transportation of
cement, which should eventually
positively impact development of
infrastructure in remote areas of
NER.Though difficult to quantify,
development of the new proposed
feeders will consume significant
quantities of cement.
R O U T E M A P S O F I W T- 2 A N D P R O P O S E D I W T- 6
27GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201526
Positive – but in the long term
NER has huge initiatives lined up for the de-
velopment, but bottlenecks are not easy to re-
solve here. The conservative nature of the pop-
ulation and resistance to change is one such
key bottleneck. Building nearly 10,000 kms of
road, +50,000 MWs of hydropower, building
infrastructure across railways, airports, inland
waterways is a definite trigger that will boost
cement demand in the long term but bottle-
necks (land acquisition, forest clearances etc.)
persist. Nevertheless, NER’s cement demand is
likely to grow at sustained and healthy growth
rate in the medium term.
Even if 10% of NER’s planned projects take off,
it will boost demand CAGR to +8% very easily
because of a low base of only 7mn tonnes p.a.
of cement consumption. Hence, any major in-
frastructure initiative will create significant de-
mand. Demand from housing is also likely to
provide the crucial near term support.
Opportunities remain in favor of incumbents
Growth opportunities in NER remain distinct
and unique and the regional decision making
authorities are aware of this. However, the local
environment is still not open enough to sup-
port all these growth initiatives though much
has changed from what it used to be around
20 years back.
Ground view firmly believes that NER will con-
tinue to be a region dominated by likes of Star
Cement, Dalmia Bharat and TopCem and it is
very unlikely that new players will make a mark
in this territory. Big boys like Holcim group, Ul-
traTech may not make a mark here at all and
may look for an opportunity in form of an alli-
ance partner with any of the existing leaders /
local cement manufacturers.
Local connect is the key to success
Unlike other regions in India, the success for
any cement manufacturer (non-local) in NER
is its ability to connect with the local people.
Branding initiatives in NER tend to be much
stronger than in other regions. Advertisement
budgets of regional leaders such as Star Ce-
ment are massive and in terms of percentage
of sales, they are even larger than the national
cement majors. Local connect is the key to suc-
cess in NER.
To sum up, NER is more of a long-term opportu-
nity and this region will generate huge cement
demand once infrastructure initiatives gather
steam. If this happens sooner than expected, it
won’t be surprising to see cement grinding ca-
pacities in West Bengal and Bihar upping their
supplies to NER (given that it is tiresome to
setup capacities in this region). It is premature
to quote absolute numbers for potential of ce-
ment consumption in the region, but given its
underdeveloped nature, NER offers significant
growth potential in the long term and remains
an attractive region to bet on.
Vaibhav Agarwal ([email protected])
What’s in store for cement manufacturers in NER
T H E C O N C L U S I O N . . .
29GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201528
WARREN BUFFETT and Berkshire Hathway are most known and applauded for their investing
prowess – around the folklore of the phrase “Moat”. However, little attention is paid to a VERY BIG fact – Berkshire has MANY wholly owned subsidiaries and after investing the key skill that comes into play is managing these companies (quite different from in-vestment analysis).
In that sense, Berkshire isn’t just an investment house, but a full-fledged conglomerate with Mr Buffett as the CEO. The incredible success of these wholly owned subsidiaries is a remarkable management achieve-ment, one that does not get as much attention. This management feat is no small one. Even Buffett noted the success of his wholly owned subsidiaries as early as 1997 in a report (link). http://www.berkshirehatha-way.com/1997ar/1997.html
I recently stumbled on a case study in the Harvard Business Review, highlighting this exact point – Berk-shire’s management success.
The central idea, the case study notes, is quite straight-forward, though I am sure executing it is incredibly hard – ally with great people and then give them full autonomy. Buffett follows this autonomy principle to the hilt. He had only two requirements from manag-ers – monthly financial statements and sending oper-ating cash to HQ, as HQ will take capital-allocation decisions. Beyond that, as Charles Thomas Munger (Vice-Chairman of Berkshire Hathaway Corporation) puts it, “It was delegation, just short of abdication.”
Two fundamental assumptions that make this man-agement model possible are – (1) businesses that don’t need significant attention, and (2) working with people who don’t need much oversight in an organi-sation that thrives on a significant factor – trust.
The 1998 report notes that for managers, the instruc-tions were pretty straight forward – “Just run your business as if: 1) you own 100% of it, 2) it is the only
asset in the world that you and your family have or
will ever have, and 3) you can’t sell or merge it for at
least a century”.
I would think that’s quite a clean way to solve the
agency problem though I am sure some more checks
and balances must be in place, because if this prob-
lem was so easy to tackle, everyone could have done
it.
Another strategy Berkshire followed was to minimise
corporate overheads - no analytical staff to assess
deals for example. This not only saved costs in rent,
salaries, and benefits, but also reduced wasteful ex-
penditure that might have happened because of a
large staff. Additionally, guaranteed speed in deci-
sion-making.
I recall my own experience when I was trying to build
a team for my start-up. One question I fiddled around
with was should I also re-polish my decade-old cod-
ing skills (to meddle around)? Then I decided against
it and delegated all tech to the lead engineer. My rea-
soning – (1) I am better off focusing, and (2) If I think
I can learn in six months what people have learnt in
10 years, I am seriously over-estimating myself and
insulting the intelligence of the team members.
I also thought of any typical President and Prime
Minister and realised that they possibly can’t know
everything and are yet expected to take decisions on
anything. Their success lies in hiring a good cabinet
and delegates.
All of this then boils down to the importance of pro-
moters and CEOs of companies that one invests in
— after all, every investor is delegating them with the
job of managing their investments.
Varun Kumar ([email protected])
Warren Buffett’s Not so well known skill
BY VARUN KUMAR
29GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201528
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Phill
ipC
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Uni
vers
e: V
alua
tio
n Su
mm
ary
31GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201530
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
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s mn)
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PAT (
Rs m
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Grow
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Nam
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EFY
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E
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2.0
2
.4
31GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201530
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
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E
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Bank
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Bank
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31
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Mah
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ah Fi
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34
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AXIS
Ban
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Ban
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Bank
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Indi
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ank
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47
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Phill
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alua
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mm
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33GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201532
CMP
Mkt
Cap
Ne
t Sal
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s mn)
EB
IDTA
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mn)
PAT (
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Grow
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Hind
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33
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Infra
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189
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struc
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77
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Infra
struc
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Infra
struc
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16
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In
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19
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ITD C
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IRB
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250
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HCL T
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Min
dtre
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Serv
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1,4
85
124
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4
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CMP
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35GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201534
CMP
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ties
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Note
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ban
ks, E
BITD
A is
pre-
prov
ision
pro
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Phill
ipC
apita
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over
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Uni
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e: V
alua
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35GROUND VIEW GROUND VIEW 1 - 31 Dec 2015 1 - 31 Dec 201534
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