Study on Financial Performance of Select Cement Companies in South India Using Du-Pont Analysis

Abstract

Presenting India as a matrix, the economic sector of cements is of great importance in every aspect of Indian economic development, such as infrastructure development, urbanization, and industrial development. The main purpose of the present study is to assess financial performance of selected cement companies of South India through DuPont Analysis. Secondary data is used for the study period, 2015 – 2025, which are published annual reports of selected Cement companies i.e. UltraTech Cement Limited, The Ramco Cements Limited, The India Cements Limited and Dalmia Bharat Limited. In order to fulfill the objectives of the study different analytical tools have been applied like DuPont Analysis, Trend Analysis, One Way ANOVA, Correlation Analysis, Multiple Regression Analysis, and Data Envelopment Analysis (DEA).

From the results of the study, it can be seen that there are indeed differences in the financial performance of the companies in question. It can be seen that UltraTech Cement has highest Profitability, Operational Efficiency, and ROE amongst the selected firms, followed by the least values of the financial size in case of India cements. The DuPont analysis revealed that Net Profit Margin, Asset Turnover Ratio, and Equity Multiplier had a significant impact in return on equity. Using the results of the correlation and regression analyses, it was found that the DuPont components were generally well correlated and positively related with ROE and the Net Profit Margin was found to be the most influential. Results of the DEA identified UltraTech Cement as the benchmark-efficient company and provided an opportunity to the relatively inefficient firms to improve their practices. The study findings shows that profitability, Efficient use of assets and ability in financial management are the major determinants which are going to affect the financial performance of the cement industry. Results offer useful recommendations to the managers, investors, financial analysis and policymakers of South Indian cement industry in areas of financial sustainability and competitiveness.