Internship Report

Financial Ratio Analysis of Wonder Cement

Narsee Monjee Institute of Management Studies

Under the Guidance of: CA Saurabh Rodgers

Submitted By: Nitya Gupta (Second year student pursuing Bsc Economics)

Duration: May-June 2025

1. Company Overview
Wonder Cement Limited, a part of the Rajasthan-based RK Group, is one of India’s
youngest yet fastest-growing cement manufacturers. Established in 2010, Wonder
Cement commenced operations in 2012 with the commissioning of its state-of-the-art
integrated cement plant in Nimbahera, Chittorgarh district, Rajasthan. Since then, the
company has steadily expanded its manufacturing capacity and geographical footprint
across North, West, and Central India.

Headquartered in Udaipur, Rajasthan, Wonder Cement is committed to delivering high-

quality cement products, supported by advanced German machinery, stringent quality
standards, and a robust supply chain. The company focuses not only on cement
production but also on contributing to sustainable development, environmental
stewardship, and community welfare. Within a relatively short span, Wonder Cement has
built a reputation for trust, consistency, and performance.

Backed by a strong leadership team and visionary management, Wonder Cement

positions itself as a brand that combines technological excellence with customer-
centricity. Its core values emphasize integrity, quality, innovation, sustainability, and
social responsibility.

Manufacturing Facilities – Integrated and Grinding Units

Wonder Cement began with a single integrated cement manufacturing unit in Nimbahera
and has since expanded into multiple grinding units to cater to growing demand and
improve logistical efficiency.

1. Integrated Cement Plant – Nimbahera, Rajasthan

This flagship facility is where Wonder Cement began its journey. The plant has
multiple clinker production lines, with a cumulative Clinker production capacity
of approximately 11 million tonnes per annum (MTPA). Built using state-of-the-
art German machinery from ThyssenKrupp and Pfeiffer, this unit features vertical
roller mills, high-efficiency separators, and automatic control systems that ensure
uniform product quality and operational efficiency.

2. Grinding Unit – Dhule, Maharashtra

Commissioned in 2018, this unit has a 2 million ton per annum (MTPA) capacity
and serves the Maharashtra and Gujarat markets. It uses advanced roller press
technology and closed-circuit systems to ensure optimal grinding and reduced
power consumption.
 3. Grinding Unit – Badnawar, Madhya Pradesh
Strategically located in Western Madhya Pradesh, this unit supports supply across
Central India and contributes significantly to the company’s logistics efficiency.
The capacity of this unit is 2 MTPA.

4. Grinding Unit – Jhajjar, Haryana

Located close to the NCR region, the Jhajjar unit caters to markets in Haryana,
Delhi, and Western Uttar Pradesh. This unit helps reduce freight costs and
delivery time.

5. Grinding Unit – Aligarh, Uttar Pradesh

This plant strengthens Wonder Cement’s presence in Eastern Uttar Pradesh. It
enhances accessibility and supply to a high-demand region.

6. Grinding Unit – Tulsigam, Gujarat

A recent addition to the company’s infrastructure, this plant supports supply
across Gujarat and parts of Maharashtra. With this unit, Wonder Cement further
consolidates its West India network.

Collectively, these plants give Wonder Cement a total production capacity of over 18
MTPA. The distributed manufacturing model allows the company to reach its customers
faster and more efficiently while minimizing environmental impact from transportation.
2. Product Portfolio and Target Audience
Wonder Cement offers a diverse range of high-quality cement products tailored for a
wide spectrum of construction applications. The company places strong emphasis on both
performance and sustainability, ensuring that its products meet the needs of different
customer segments while maintaining high durability and strength standards.

Ordinary Portland Cement (OPC)

Wonder Cement’s OPC is available in two grades: 43 and 53. It is ideal for infrastructure
projects requiring high early strength and is extensively used in construction of:
- High-rise buildings
- Roads and bridges
- Dams and flyovers
- Industrial and commercial complexes

Advantages:
- High compressive strength
- Fast setting time
- Long-term durability

Portland Pozzolana Cement (PPC)

PPC is a blended cement ideal for general construction. It is made by combining clinker,
gypsum, and pozzolanic materials like fly ash. It is best suited for:
- Residential buildings
- Marine structures
- Sewage and drainage systems
- Dams and canal linings

Advantages:
- Superior workability and finishing
- Enhanced resistance to sulphate and chloride attacks
- Low heat of hydration (minimizing thermal cracks)
- Long-term strength development

Specialty Cements (Wonder Xtreme & Wonder Plus)

Wonder Cement has also introduced premium variants like Wonder Xtreme and Wonder
Plus designed for elite construction and aesthetic requirements.
These variants focus on:
- Enhanced finish and smoothness
- Crack resistance
- Greater longevity and strength for luxury homes and critical structures

Target Audience

Wonder Cement serves a broad market segment through its product range. Key target
customers include:

- Individual House Builders (IHBs): Focused on quality, finish, and strength for personal
home construction.
- Real Estate Developers: Require bulk, consistent-grade cement for commercial and
residential projects.
- Infrastructure Developers: Use high-performance OPC for roads, flyovers, bridges, and
industrial structures.
- Government and Public Sector Units: Engage Wonder Cement for projects under
PMAY, Smart Cities, and urban development.
3. Cement Manufacturing Process at Wonder Cement
The cement manufacturing process at Wonder Cement is a carefully designed,
technologically advanced, and environmentally conscious system that transforms raw
materials into high-quality cement. Wonder Cement follows a comprehensive process
that begins with the mining of limestone and ends with the packaging of the final cement
product. Each stage is implemented with precision and aided by modern machinery to
ensure consistency, efficiency, and quality.

1. Mining and Crushing

The first step in the cement manufacturing process at Wonder Cement is the extraction of
limestone, the primary raw material used to make cement. The limestone is sourced from
the company’s own mines, which are located close to the cement plant to minimize
transportation. The extracted limestone is then subjected to a crushing process. Large
chunks of limestone are fed into a crusher where they are reduced to smaller pieces. This
crushing ensures that the raw material is of uniform size, making it suitable for the next
stages of the manufacturing process.

2. Raw Material Preparation

After crushing, the limestone is blended with other materials such as laterite, bauxite, and
iron ore in pre-determined proportions. These materials are critical as they add essential
minerals to the mix, such as silica, alumina, and iron, which are needed for the chemical
reactions in the kiln. The blending is carefully done to maintain chemical consistency and
ensure the desired composition of the raw mix.

This raw material blend is then ground into a fine powder in a vertical roller mill. This
grinding process increases the surface area of the material, making it more reactive
during the next phase. The fine powder, also known as raw meal, is then stored in silos
before being fed into the kiln.

3. Pyroprocessing – Clinker Formation in the Kiln

The raw meal is then introduced into the preheater and kiln system. Wonder Cement uses
a five-stage preheater tower that heats the raw material using hot gases from the kiln.
This process begins the chemical reactions that are essential for cement formation.
The preheated material then enters the rotary kiln, a large cylindrical structure that rotates
slowly and is heated to very high temperatures, reaching approximately 1450 degrees
Celsius. In the kiln, the raw materials undergo a series of complex chemical reactions.
The key transformation that occurs here is the formation of clinker. Clinker is the
intermediate product formed by sintering the raw mix at high temperatures. It appears as
small, dark grey nodules.

The quality of the clinker is critical to the quality of the final cement. At Wonder Cement,
temperature, pressure, and chemical composition are carefully controlled and monitored
to produce high-grade clinker.

4. Cooling and Clinker Storage

After exiting the kiln, the hot clinker is rapidly cooled using a clinker cooler. This
cooling is essential to stabilize the material and improve its handling characteristics.
Rapid cooling also helps retain the desired mineral structure and enhances the reactivity
of the clinker.

Once cooled, the clinker is transported to storage silos. Here, it is held until needed for
the final stage of the cement manufacturing process. The storage also allows for blending
if necessary, ensuring consistency in the final cement product.

5. Cement Grinding

The next step in the process is the grinding of clinker along with gypsum and other
additives to produce cement. At Wonder Cement, this grinding is done in a closed-circuit
system using vertical roller mills or ball mills. Gypsum is added to control the setting
time of the cement, while other materials such as fly ash or slag may be added depending
on the type of cement being produced.

The result is a fine powder, which is the final cement product. The fineness and
consistency of the cement are closely monitored using modern quality control systems.
Sampling and testing are done at regular intervals to ensure that the product meets the
highest standards of performance.

6. Packaging and Dispatch

Once the cement is ground and quality-tested, it is ready for dispatch. The final product is
stored in large cement silos from where it is packed using fully automatic packing
machines. Wonder Cement offers cement in various packaging formats including 50 kg
bags, jumbo bags, and bulk tankers depending on customer requirements.

The packing lines are designed for speed, accuracy, and hygiene. Once packed, the
cement is loaded onto trucks using automated loading systems. This ensures safe and
efficient dispatch of cement to customers across multiple regions.

Quality Control

Throughout the manufacturing process, Wonder Cement maintains strict quality control
protocols. From the selection of raw materials to the final dispatch of cement, each stage
is monitored through laboratory testing, real-time sensors, and digital control rooms. The
company uses advanced equipment to test the physical and chemical properties of raw
materials, clinker, and finished cement. This includes instruments like X-ray analyzers,
spectrometers, and particle size analyzers.
 4. Financial Ratio Analysis (FY 2022–23 vs FY 2023–24)
This section delves into a detailed analysis of the key financial ratios of Wonder Cement
Limited for the financial years 2022–23 and 2023–24. By comparing two consecutive
fiscal years, the report assesses the company’s performance trajectory and financial
health. Furthermore, the ratios are benchmarked against prevailing industry averages,
providing insights into Wonder Cement’s relative standing within the cement sector.

Current Ratio

= Current Assets/Current Liabilities

FY 2022–23: 1.13
FY 2023–24: 1.57

Current Ratio
2
1.57
1.5
1.13
1

0.5

0
FY 2022–23 FY 2023–24

The current ratio, which reflects a company’s ability to meet short-term obligations using
its short-term assets, increased from 1.13 in FY 2022–23 to 1.57 in FY 2023–24. This
improvement signals stronger liquidity and suggests that Wonder Cement has become
more efficient in managing its working capital. Better control over receivables, inventory,
and cash balances likely contributed to this shift, allowing the company to maintain a
healthier cash cycle and reduce reliance on short-term borrowing.

Such a rise also reflects a cautious financial stance, particularly valuable in a capital-
intensive and cyclical industry like cement. By strengthening its liquidity position,
Wonder Cement is better prepared to manage operational costs, meet creditor obligations
promptly, and respond to market fluctuations. This improvement indicates thoughtful
financial planning and positions the company to maintain stability while pursuing future
growth.
Quick Ratio

= Quick Assets/Current Liabilities

where, Quick Assets = Current Assets – Inventories

FY 2022–23: 0.74
FY 2023–24: 1.26

Quick Ratio
1.5 1.26

1 0.74

0.5

0
FY 2022–23 FY 2023–24

The quick ratio, or acid-test ratio, refines the liquidity assessment by excluding
inventories, which are less liquid compared to other current assets. Wonder Cement’s
quick ratio rose from 0.74 to 1.26, indicating stronger liquidity and a better capacity to
pay off short-term liabilities without relying on the sale of inventory.

Such a notable rise indicates that the company may have strengthened its liquid asset base
or exercised tighter control over its short-term obligations. In the cement industry, where
inventory movement can be impacted by seasonal demand and construction cycles, a
strong quick ratio offers valuable protection. This improvement highlights Wonder
Cement’s growing focus on liquidity and its ability to sustain operations and meet
commitments even under fluctuating market conditions.

Debt-to-Equity Ratio

= Total Debt/Total Equity

FY 2022–23: 1.85
FY 2023–24: 1.65
 Debt-Equity Ratio
1.9 1.85
1.85
1.8
1.75
1.7 1.65
1.65
1.6
1.55
FY 2022–23 FY 2023–24

The debt-to-equity ratio provides a measure of the financial leverage employed by a

company. A lower value indicates a conservative approach to borrowing, reducing the
burden of fixed financial obligations. For Wonder Cement, a reduction from 1.85 to 1.65
reflects a move towards a more balanced capital structure.

This improvement may be attributed to several factors, including repayment of long-term

debt, improved profitability leading to higher retained earnings, or the infusion of fresh
equity capital. A healthier leverage ratio enhances financial flexibility and lowers the risk
profile of the business, which is particularly important in capital-intensive industries like
cement. It also improves the company’s credibility with lenders and investors, enabling
access to capital on more favorable terms and supporting long-term sustainability..

Interest Coverage Ratio

=EBITDA/Interest Expenses

FY 2022–23: 1.66
FY 2023–24: 2.52

Interest Coverage Ratio

3 2.52
2.5
2 1.66
1.5
1
0.5
0
FY 2022–23 FY 2023–24
The interest coverage ratio is a critical indicator of how well a firm can cover its interest
obligations from operating profits. Wonder Cement improved significantly in this area,
with the ratio rising from 1.66 to 2.52. This upward movement suggests improved
profitability and a stronger capacity to handle interest payments.

This positive shift may be the result of increased operating income, tighter cost controls,
or reduced interest expenses through more efficient debt structuring. A higher interest
coverage ratio is particularly valuable in capital-intensive industries like cement, where
companies often rely on borrowed capital for expansion and operations. The rising ratio
highlights Wonder Cement’s improved financial health, reduced risk of default, and
greater stability—factors that can strengthen investor and lender confidence alike.

Net Profit Margin (%)

=PAT/Net Sales

FY 2022–23: 4.16%
FY 2023–24: 6.54%

Net Profit Margin

8.00%
6.54%
6.00%
4.16%
4.00%

2.00%

0.00%
FY 2022–23 FY 2023–24

Net profit margin measures the proportion of revenue that remains as profit after all
expenses. The increase from 4.16% to 6.54% demonstrates significant enhancement in
profitability. This growth indicates better cost control, pricing strategies, and operational
efficiencies.

Such an increase is particularly impressive in the cement industry, where high input
costs, energy dependence, and market volatility often constrain profit margins. The
improvement may be the result of initiatives like optimizing the supply chain, increasing
automation, and adopting sustainable production practices that reduce energy costs. This
upward trend in net profitability underscores Wonder Cement’s ability to translate
operational improvements into financial gains.
Return on Equity (ROE)

=EBITDA/Total Equity

FY 2022–23: 11.53%
FY 2023–24: 17.68%

Return on Equity
20.00% 17.68%

15.00%
11.53%
10.00%

5.00%

0.00%
FY 2022–23 FY 2023–24

Return on Equity (ROE) assesses how efficiently a company uses shareholders’ equity to
generate net profits. For Wonder Cement, the ROE saw a sharp increase from 8.29% in
FY 2022–23 to 14.91% in FY 2023–24, indicating stronger profitability and more
effective deployment of capital. This rise reflects not only improved earnings but also the
company’s ability to maximize returns on the equity invested by its shareholders.

The improvement is likely a result of increased net profit margins and enhanced asset
utilization. A rising ROE is generally interpreted as a sign of strong management
performance and strategic financial planning. In the case of Wonder Cement, it suggests
that the company is on a positive growth trajectory, delivering greater value to its
shareholders and strengthening its long-term investment appeal.

Return on Assets (ROA)

=PAT/Total Assets

FY 2022–23: 4.04%
FY 2023–24: 6.67%
 Return on Assets
8.00%
6.67%
6.00%
4.04%
4.00%

2.00%

0.00%
FY 2022–23 FY 2023–24

The ROA metric indicates how efficiently the company is using its total assets to
generate profit. An improvement from 4.04% to 6.67% is indicative of better asset
management and more productive use of capital-intensive infrastructure and machinery—
core aspects of the cement industry.

Wonder Cement showcases a commendable level of operational efficiency. This could

result from improvements in production planning, higher sales volumes, or streamlined
logistics—key components in a high fixed-cost industry like cement.

Inventory Turnover Ratio

=COGS/Average Inventory

FY 2022–23: 1.55
FY 2023–24: 1.91

Inventory Turnover Ratio

2.5
1.91
2
1.55
1.5

0.5

0
FY 2022–23 FY 2023–24
The inventory turnover ratio measures how many times a company's inventory is sold and
replaced over a period. A higher ratio suggests efficient inventory management and better
demand forecasting. Wonder Cement’s increase from 1.55 to 1.91 is a positive
development.

While progress is visible, this still highlights an area where further improvement is
needed. Lagging behind the industry suggests potential bottlenecks in production, excess
holding, or conservative sales estimates. Enhanced supply chain practices and real-time
inventory monitoring could help push this ratio closer to or beyond industry benchmarks.

Asset Turnover Ratio

=Net Sales/ Total Assets

FY 2022–23: 0.97
FY 2023–24: 1.01

Asset Turnover Ratio

1.02
1.01
1
0.99
0.98
0.97
0.96
0.95
FY 2022–23 FY 2023–24

The asset turnover ratio reflects a company’s ability to generate revenue from its total
assets. Wonder Cement’s rise from 0.97 to 1.01 signifies improved asset utilization,
which is crucial for capital-intensive industries like cement, where large investments are
made in plant and equipment.

It indicates that Wonder Cement is making progress in aligning asset deployment with
revenue growth. Going forward, focusing on optimal capacity utilization and higher
production efficiency can further boost this metric.
5. DU Pont Analysis
The DuPont Analysis is a powerful tool that breaks down Return on Equity (ROE) into
three components:

1. Net Profit Margin (Profitability)

2. Asset Turnover (Efficiency)

3. Equity Multiplier (Leverage)

This breakdown helps assess the drivers behind a company’s ROE and whether it is
driven by operational efficiency, cost management, or financial leverage.

Overview of DuPont Formula:

Where:

• Net Profit Margin = Net Profit / Revenue

• Asset Turnover = Revenue / Total Assets

• Equity Multiplier = Total Assets / Shareholder’s Equity

FY 2022–23 Metrics :

• Net Profit Margin: 4.16%

• Asset Turnover: 0.97

• ROE: 11.53%

Using the DuPont formula:

Equity Multiplier: 2.87

FY 2023–24 Metrics:

• Net Profit Margin: 6.54%

• Asset Turnover: 1.01

• ROE: 17.68%

Equity Multiplier: 2.67

Analysis and Interpretation:

1. Net Profit Margin (Profitability)

The net profit margin improved from 4.16% in FY 2022–23 to 6.54% in FY 2023–24,
indicating:

• Better cost control

• Improved pricing power

• Optimized production efficiency

This enhancement shows Wonder Cement has improved its bottom-line management
significantly. Despite operating in a highly competitive industry with tight margins, the
company’s efforts in cost efficiency and premium product mixes (like Wonder Platinum
and Xtreme) likely contributed to this improvement.

2. Asset Turnover (Efficiency)

The asset turnover ratio increased from 0.97 to 1.01, which indicates that Wonder
Cement is:

• Generating more revenue per rupee of asset employed

• Using its assets more effectively

• Increasing operational output without proportionately increasing asset base

This is a sign of greater asset productivity — possibly due to better capacity utilization of
the company plant and grinding units.

3. Equity Multiplier (Leverage)

The decrease in equity multiplier from 2.67 to 2.87 suggests that Wonder Cement
increased its reliance on equity relative to debt over this period. This change implies a
slight drop in financial leverage, which can boost ROE provided profitability and asset
efficiency are also improving — which, in Wonder Cement’s case, they are.

Year-on-Year DuPont Summary:

Metric FY 2022–23 FY 2023–24 Change

Net Profit Margin (%) 4.16 6.54 +2.38

Asset Turnover 0.97 1.01 +0.04

Equity Multiplier 2.87 2.67 –0.20

ROE (%) 11.53 17.68 +6.15

Strategic Insights:

1. ROE Quality Improved

While the company’s ROE increased, the source of this improvement is
noteworthy. The quality of ROE in FY 2023–24 is higher because it came from
operational performance (margin + turnover), rather than leverage.

2. Financial Risk Management

Lower reliance on leverage (drop in equity multiplier) suggests prudent debt
management. This makes Wonder Cement more resilient to interest rate
fluctuations and economic downturns.

3. Efficient Capital Allocation

Higher asset turnover with a lower equity multiplier signals that the company is
using its capital efficiently and reinvesting earnings wisely.

4. Investor Confidence
A consistently improving ROE driven by better margins and efficiency (not by
debt) is generally seen favorably by investors. This can support higher valuations
in the future

6. Common Size and Trend Analysis

Common size analysis is a valuable financial tool used to assess a company’s
performance over time by expressing each line item in the income statement as a
percentage of total revenue. This method removes the effect of scale and allows for a
direct comparison across time periods, providing clarity on how different components of
income and expense have evolved relative to revenue.

For Wonder Cement, we analyze the key financial metrics for FY 2022–23 and FY 2023–
24 using the common size format.

1. Revenue: The Benchmark (100%)

In common size analysis, total revenue is the reference point, marked as 100%. All other
income statement components are expressed as a percentage of this base. This approach
helps us see whether cost elements are growing or shrinking relative to the revenue
generated.

Revenue itself, in absolute terms, grew from FY 2022–23 to FY 2023–24, although the
focus here is on structural change rather than numerical growth.

2. Cost of Goods Sold (COGS)

• FY 2022–23: 65% of revenue

• FY 2023–24: 63% of revenue

The COGS reflects the direct costs incurred in the production of cement, including raw
materials (limestone, gypsum, coal/petcoke), power, fuel, and labor costs. The reduction
from 65% to 63% indicates greater cost control and efficiency in raw material
procurement, better energy usage, or improvement in production technology.

This decline by 2 percentage points suggests that the company may have optimized its
production process or benefited from a more favorable input cost environment. The result
is a positive impact on gross margins, which leads directly into the next metric.

3. Gross Profit

• FY 2022–23: 35% of revenue

• FY 2023–24: 37% of revenue

Gross profit is calculated as revenue minus COGS. The rise in gross profit margin from
35% to 37% reflects an improvement in Wonder Cement’s core manufacturing efficiency
and pricing power. Despite potential fluctuations in raw material prices or logistics costs,
the company has managed to improve its margin profile.

This improvement suggests either a rise in average selling prices, a fall in unit cost of
production, or both. For a cement company operating in a competitive market, a two-
percentage-point increase in gross profit margin is significant and denotes a positive
trend.

4. Operating Expenses

• FY 2022–23: 18% of revenue

• FY 2023–24: 16% of revenue

Operating expenses include administrative costs, sales and distribution expenses, and
other overheads not directly tied to production. The reduction in operating expenses by 2
percentage points shows better operational discipline, possibly through better cost
governance, automation, or optimization in logistics and distribution.

This improvement becomes particularly noteworthy when combined with the rise in gross
profit, as both have a multiplier effect on operating profitability. Reduction in operating
expenses as a percentage of revenue also reflects improved scalability of operations –
meaning the company is able to grow revenue without a proportionate increase in indirect
costs.

5. Operating Profit (EBITDA)

• FY 2022–23: 17% of revenue

• FY 2023–24: 21% of revenue

Operating profit or EBITDA (Earnings Before Interest Taxes Depreciation and

Ammortization) reflects the profitability of the company from its core operations before
taking into account interest and taxes. A jump from 17% to 21% is a clear indicator of
strengthened operational efficiency and improved financial management.

This four-percentage-point gain shows that the company is benefiting from economies of
scale and improved internal cost structures. It also implies a stronger cushion to absorb
financial costs or economic shocks. In an industry like cement, where margins can be
tight and cyclical demand fluctuations are common, this improvement enhances Wonder
Cement’s ability to navigate business cycles.
6. Interest Expense

• FY 2022–23: 4% of revenue

• FY 2023–24: 3% of revenue

Interest expense as a percentage of revenue dropped by 1 percentage point, which could

be due to either reduced borrowing levels (i.e., debt repayment or restructuring) or more
favorable borrowing terms (i.e., lower interest rates). This trend contributes positively to
net profit and indicates improved financial leverage.

This reduction also reflects a decrease in the debt-to-equity ratio (as discussed in the
financial ratios section), which means the company is moving toward a more stable and
less risky capital structure.

7. Net Profit

• FY 2022–23: 4.16% of revenue

• FY 2023–24: 6.54% of revenue

The most conclusive indicator of Wonder Cement’s improved financial health is the net
profit margin, which increased from 4.16% to 6.54% year-on-year. This 2.38 percentage
point improvement suggests a stronger bottom line, driven by better cost control at every
level of the income statement – from direct production costs to interest expenses.

This higher net profitability enhances the company’s ability to reinvest in expansion,
improve shareholder returns, and withstand external shocks like inflation or demand
slumps.

Overall Structural Improvements and Trend Summary

When we compare FY 2023–24 with FY 2022–23, the income statement shows across-
the-board improvements:

• Production efficiency improved (COGS down 2%)

• Administrative and selling efficiency improved (Operating expenses down 2%)

• Operating leverage increased (EBIT up 4%)

 • Financial leverage improved (Interest down 1%)

• Profitability rose significantly (Net Profit up 2.38%)

The reduction in COGS and operating expenses without any negative effect on revenue
demonstrates Wonder Cement’s effective use of technology, disciplined cost
management, and smarter supply chain practices. The company appears to be focusing on
margin expansion while maintaining or growing its top line, which is a hallmark of
mature and responsible growth.
7. SWOT Analysis of Wonder Cement

Strengths

1. Strong Brand Reputation

Wonder Cement is a part of the RK Group, one of India’s leading names in
marble and mining. The trust and reputation built over decades in the construction
materials industry give Wonder Cement a solid foundation and credibility in the
market.

2. High-Quality Product Portfolio

The company is known for producing high-quality OPC (Ordinary Portland
Cement) and PPC (Portland Pozzolana Cement). It also markets blended cement
and has earned a reputation for product consistency, durability, and strength,
which is key in the construction industry.

3. State-of-the-Art Manufacturing Facilities

Wonder Cement’s integrated cement plant at Nimbahera and all its 5 grinding
units are equipped with cutting-edge German technology from ThyssenKrupp
and Pfeiffer. This ensures efficient production, minimal waste, and high energy
savings.

4. Robust Distribution Network

The company has an extensive distribution network across key states like
Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Delhi, Haryana, Punjab, and
Uttar Pradesh. It leverages this network effectively to maintain availability and
timely delivery.

5. Commitment to Sustainability
Wonder Cement actively engages in sustainable practices such as waste heat
recovery systems, use of alternate fuels, and eco-friendly logistics. Its
manufacturing processes are designed to reduce carbon emissions and energy
consumption.
Weaknesses

1. Limited Pan-India Presence

While the company has a strong foothold in North, West, and Central India, it
lacks significant penetration in the Eastern and Southern markets where
competitors like UltraTech and ACC have a wider presence.

2. Dependence on a Few Plants

A majority of production is concentrated in a few locations. Any operational
disruption (due to labor issues, technical failure, or natural calamities) can
significantly impact output and supply.

3. Low Brand Awareness Compared to Top Rivals

Although Wonder Cement has a growing brand, it still trails behind giants like
UltraTech, ACC, and Ambuja in terms of brand recall, particularly in metro cities
and high-value institutional segments.

4. Late Entry into the Market

Established in 2010, Wonder Cement is relatively new in the cement industry.
This has meant that many long-term government and institutional contracts are
already tied up with older players.

Opportunities

1. Infrastructure Boom in India

The Indian government’s push for massive infrastructure development under
schemes like PM Gati Shakti, Smart Cities Mission, and Housing for All presents
a huge demand opportunity for cement manufacturers.

2. Rural Housing and Tier-II/Tier-III City Growth

Rising disposable incomes and real estate development in smaller towns are
creating a growing market for affordable, high-quality cement, where Wonder
Cement can gain a stronger foothold.

3. Export Potential
With ports in Gujarat and Maharashtra nearby, there is significant potential for
Wonder Cement to expand into South Asian and Middle Eastern markets,
especially for clinker and bulk cement exports.

4. Green Cement and Product Diversification

Growing global demand for green and low-carbon cement products offers Wonder
Cement the opportunity to innovate and lead in sustainable construction materials.
 It can also expand into allied segments like ready-mix concrete and building
solutions.

5. Technology Adoption and Automation

Further digitization of its supply chain, predictive maintenance, AI-based quality
control, and blockchain in logistics can give Wonder Cement an edge in
operational efficiency and customer satisfaction.

Threats

1. Intense Competition
The Indian cement sector is highly competitive and fragmented. Large players
like UltraTech, Shree Cement, and Dalmia Bharat dominate the market, with
pricing wars and capacity expansions posing constant threats.

2. Rising Input Costs

Cement production is energy- and resource-intensive. Any rise in prices of coal,
pet coke, electricity, or logistics (like diesel prices or freight rates) directly
impacts profitability.

3. Regulatory and Environmental Compliance

Cement manufacturing faces stringent environmental regulations. Any change in
norms related to emissions, waste disposal, or land acquisition can cause delays or
cost overruns.

4. Economic Slowdowns
The cement industry is closely linked to the real estate and infrastructure sectors.
Any slowdown in construction activity due to policy changes, interest rate hikes,
or global recession can reduce demand significantly.

5. Volatility in Raw Material Supply

Availability of limestone and gypsum, crucial for cement production, can be
affected by mining restrictions or geopolitical factors, impacting long-term
production planning.
Conclusion
The financial analysis of Wonder Cement Limited for the fiscal years 2022–23 and 2023–
24 highlights a period of significant improvement across key performance metrics.
Strengthened liquidity ratios, declining debt levels, and enhanced profitability indicate
sound financial management and strategic foresight. The company’s improved return on
equity and return on assets reflect more efficient use of capital and better asset
productivity, driven by operational enhancements and prudent cost control.

Moreover, the DuPont analysis reveals that Wonder Cement’s rising ROE is largely
attributable to improvements in profitability and efficiency, rather than increased
financial leverage—demonstrating a sustainable and high-quality growth path. Common
size analysis further confirms structural improvements in the income statement, marked
by lower costs, improved operating margins, and a stronger bottom line.

With its modern manufacturing infrastructure, expanding footprint, strong governance,

and growing focus on sustainability, Wonder Cement is well-positioned to capitalize on
India’s booming infrastructure and real estate sectors. While challenges such as
competitive intensity and input cost volatility persist, the company’s robust financial
foundation and strategic direction provide it with the resilience and agility required to
navigate the dynamic cement industry.

This report not only affirms Wonder Cement’s current financial health but also reflects its
readiness to pursue long-term growth with operational excellence and strategic discipline.