Buybacks can be a great chance of earning. We have analyzed 4 buybacks here and in each buyback we have taken different scenarios of what can happen.
Check this file for our analysis.

Done by Sanjeel Kothari and Kusum Chaudhary

In the last post we calculated the opportunity cost for business that came around 12%.
Now by taking that opportunity cost as Cost of Capital we have calculated RoCE for companies of cement sector and by that RoCE we calculated which firm is earning in excess of cost of capital.
Here, attached is the excel file where analysis and all calculation is done.
By doing this activity we can filter good and bad companies up to some extent.
Note – Data used was acquired from different sources.

On doing analysis on Nifty 50 data for past 25 years, we found that average return for a period is 12%. This can be considered as opportunity cost or cost of capital for businesses.
Because if the money was invested in Nifty 50 it would have generated 12% return.

Sheet – Flat finished steel product

Pellet – Mostly used in producing sponge iron

Billets – Semi finished products which are similar to blooms

Blooms – Semi finished products used as inputs

Rebar – Reinforcing steel used as rods

Bearing – A machine element which reduces friction between moving parts

Ingot -Primary solid product obtained upon solidification of liquid steel

Hot Rolled (HR) flat products – Produced by re-rolling of slabs/thin slabs at high temperature (above 1000 Degree C)

Cold Rolled (CR) strips – Produced by cold rolling of HR Strips in Cold Rolling Mills (normally at room temperature)

Coated Products -Cold rolled products coated with metals or organic chemicals

Coking coal – Variety of coal which on heating in the absence of air undergo transformation into plastic state, swell and then re-solidify to give a cake

Coke – Residual solid product obtained upon carbonization of coking coal

Non-Coking Coal (NCC) – Coal of poor coking properties i.e. does not soften and form cake like coking coal during carbonization

Coke oven – silica refractory lined ovens/ chambers

Some abbreviations –

IISI – International Iron and Steel Institute

MTPA – Million Tonnes per Annum

TMT – Thermo Mechanically Treated

MnT – Million Tonnes

CRM – Customer Relationship Management

DRI unit – Direct Reduced Iron unit

OHSAS – Occupational Health and Safety Assessment Series

SMS – Steel Melting Shop

TMT rebar – Thermo Mechanically Treated rebar

MT – Metric Tonnes

TPA – Tonnes per Annum

TPD – Tonnes per Day

TPH – Tonnes per Heat

CTD – Cold-worked Twisted & Deformed

Different types of long products:                             

• Bars & rods
• Wires
• Bright bars
• Rails
• Wire rods

Different types of flat products:

• Strips (wide and narrow)
• Plate
• Sheet

Here is the link to the drive containing necessary documents https://drive.google.com/drive/u/2/my-drive

I will be using these documents (acquired from different sources) for doing my analysis on cement sector.

Sanjeel Kothari – I am currently doing FinBridge program from Finnacle Investment Academy, Surat. I have cleared CFA Institute’s Investment Foundation exam. My ambition is to become Equity Research Analyst.