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Ambuja Cement

November 2005

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Indian Economy

On a Consistent growth path

Impetus on Service Sector

Changing Demography - A Growth Driver

Moved from being an Agrarian Economy to

Services & Manufacturing Economy

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Infrastructure & Housing

New Drivers of Economic Growth

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Cement - Proxy to Growth

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Future Cement Scenario

Indian economy expected to grow at - 7 to 8%

Infrastructure development at an inflection point

Housing to be the main driver of cement growth

Cement Growth expected to be over 9%

After a long gap demand would exceed supply

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Cement Demand

(Apr - Nov)

Mn. Tonnes Growth (%)2005 - 06* 89.7 10

2004 - 05 81.8 8

* Estimated for November 2005

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Expected Cement Demand2005-06 2006-07 2007-08

Base Domestic Demand 123 133 143

Growth - 8% 10 10 -

- 9% - - 13

Expected Domestic Demand 133 143 156

Exports 4 4 4Expected Total Cement Demand 137 147 160

Mn. Tonnes

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Cement Production Capability2005-06 2006-07 2007-08

Base Clinker Production 109 113 118

Increased Production due

to improvements/Expansions 4 5 6113 118 124

Clinker Export 6 6 6

Clinker for Cement Grinding 107 112 118

Blending Ratio 1.28 1.28 1.28

Cement Production 137 143 151

Mn. Tonnes

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Demand set to outstrip Supply

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Result

A Structural change in Pricing Scenario.

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. As

No Major Cement Capacity expected in near future

Reasonably Consolidated Industry

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1995

Top 5 Groups

26%

Others

74%

2005

Top 5 Groups

65%

Others

35%

Fragmentation To Consolidation

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Average Cement Prices

- Domestic -

US $ % Change2005 - 06 45 13

2004 - 05 40 8

US $/ Per Tonne

Cement Prices Net of Duties, Taxes and Freight

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- International -

2005 - 06 2004 - 05

Cement 45 37

Clinker 35 28

(FOB) - Free on Board

US $/ Per Tonne (FOB)

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Sea terminals

Cement factories

HP

Gujarat

Rajasthan

Maharashtra

Punjab

Ambuja Cement

Western India 8.0

Northern India 6.0

Total Capacity 14.0

Mn. tonnes

1986 - 0.7 Mn. TonnesToday - 14 Mn. Tonnes

Predominant Player in

West & North India

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Growth

With

A Sustainable Business Model

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Our Business Model

Owned Infrastructure

Logistic Management

Premium Brand - Only selling in Retail Markets

Environment Friendly operations

Social Corporate Citizen

Low Cost Cement Producer

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200 MW of Captive Power Plants

100% captive power - Reliable & cheap generation

Large port handling Export of Cement & Import of Coal

3 Cement receiving terminals

7 Owned Ships for transporting Cement by Sea

35% Cement transport by sea - Cheapest Mode

Largest Exporter of Cement - 15% of Production

Infrastructure & Logistic Management

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Premium Brand

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

Our focus :

Best quality cement

Good packaging

Strong distribution network

Customer service

Ambuja Cement - Most preferred brand- Fetching higher realisation

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Use of surface miners - Blast free mining

Restoration of mines - green spots & water reservoirs

Use of bio-gas, agro waste as alternate fuels

Rose Garden & Cement Plants - Co-exist

Many International Awards in Environment Management

Global Standards for Environmental Measures

ISO 14001 for Environment Management System

Environment Friendly Operations

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Raising Environment Awareness

Building up of check dams, salinity ingress checks

Water Harvesting & Ecology Pits - Visit of Siberian Cranes

Programs for rural healthcare and women development

Asian CSR Awards 2005 for Environmental Excellence

among 94 companies participating from 16 countries

Corporate Social Responsibility

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Direct Cost

FY 2005

Power 202

Fuel 298

Raw material 172

Consumables 49

Direct cost 721

US $ 16.0

Rs./ tonne

USD/INR = Rs. 45

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F.Y Operating Margin (%)

2005 30

2004 29

2003 29

Highest Operating Margins in the Indian Cement Industry

Operating Margin

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Gujarat Ambuja Cements Limited(Consolidated Income Statement)

FY2005 FY 2004 Growth (%)

Sales 30855 24150 28

Operating Profit 9278 7098 31

Interest 902 900 -

Depreciation 2195 2082 6

Profit Before Tax 6181 4116 50

Prior Period Adjs (credit) - 425 -

Tax 831 688 20

Profit After Tax 5350 3853 39Minority Interest 169 229 (26)

Net Profit 5181 3624 43

Operating Margin 30 % 29 % --

Rs. Mn.

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Gujarat Ambuja Cements Limited(Consolidated Balance Sheet)

FY2005 FY2004

Sources of Funds

Shareholders Funds 24873 17314

Minority Interest 79 6375

Deferred Tax 3811 3209Net Debt 8447 11845

Total 37210 38743

Application of Funds

Gross Fixed Assets 39210 44434

Less: Depreciation 14792 16005Net Fixed Assets 24418 28429

Investments 10835 9637

Net Current Assets 1957 677

Total 37210 38743

Rs. Mn.

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Ratios

FY 2005 FY 2004

Interest Cover 9.4 7.5

Operating Margin 30 % 29 %Net Debt / EBIDTA 1.1 2.2

Net Debt / Networth 0.37 0.61

ROCE 17 % 12 %

RONW 21 % 18 %

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Our Score Card(1987 - 2005)

Parameters CAGR (%)

Capacity 18

Sales 29

Net Profit 36

Networth 30

Return to Shareholders 29

Wtd. Avg. EBIDTA Margin 33

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Our First Quarter Financials(June - Sept 2005)

1Q 2006 1Q 2005Sales 6774 7066

Operating Profit 1714 1894

Other Income 8 234

Interest 220 229

Depreciation 495 607

Share Profit of Associates 339 -

Profit Before Tax 1346 1292

Tax 265 204

Minority Interest - 79Profit After Tax 1081 1009

Rs. Mn.

The Results are not comparable as ACEL during the current quarter has beenconsidered as an associate as compared to a subsidiary company in the previousquarter.

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Our Shareholders

Management

24%

Domestic Pension &

Mutual Funds

18%

FII's (Incl. GDR)

41%

Others

17%

Current Market Capitalization - Over US$ 2 Bln.

One of the most traded shares in India

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Payout Ratio

Year Equity PAT Dividend Payout

Capital (%) Ratio (%)2005 27038 46829 90 46 *

2004 17940 33679 80 47

2003 15530 22209 70 55

Rs. Mln.

A Policy of 40 - 60% Payout

* On Expanded Capital

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Partnership with Holcim

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Structure

Due to this Structure GACLs effective shareholding in ACC goes

up to 11.5% from 8.3 % without any fresh investments by GACL.

ACEL

94.6%

ACC

13.8%

ACIL

GACL AIG/GIC

60% 40%

ACEL

97.0%

ACC

34.7%

ACIL

GACL HOLCIM

33% 67%

Before Current

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Salient Features of the Partnership

Holcim Investments in India through ACIL only

Access to Holcims best practices in areas such

as waste heat recovery, use of alternative fuels,

human resources and Information technology

Opening of new cement trading opportunities in

Middle East and Indian Ocean

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Ambuja Growth Plans

Plan to increase capacity by 3 to 4 mn. tonnes in

next 2 - 3 years by way of acquisition, upgradation

& brown field expansion.

Growth to be funded from free cash flows

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Thank You