Financial Performance and Profitability Assessment of Mini Cement Plants in northeast India

Abstract

The Indian Cement Industry is one of the eight core sectors of the Indian economy. A total of 210 large cement plants together account for 410 million tonnes of installed capacity in the country, while 350 mini cement plants make up the rest of the estimated capacity of around 11.10 MT (IBEF, 2017). Cement is one of the most promising sectors and the north-eastern states of India are likely to be the newer and virgin markets for cement companies and could contribute to the bottom line in future. With the increasing demand for cement in the market, several private entrepreneurs roped in the cement industry of Northeast India. The rising opportunities in the cement sector motivated the small entrepreneurs to join in by setting mini cement plants to serve the local markets of their areas. But to withstand the intense competition in the cement industry, the financial performance of the mini cement plants must be strong enough to sustain.

The paper aims to study the financial performance and profitability status of the Mini cement plants of the northeast India. The analysis focuses on determining the critical financial indicator of profitability ratio for evaluating operational efficiency and financial health of the subjects. It also evaluates the financial soundness and future prospects of the selected plants by using the parameters of Net Profit and Cumulative Profit Estimation.