Rapid fire on a cement company: from its share price, share count, net debt, EBITDA, capacity and the cost of a new plant, give its enterprise value, EV to EBITDA, EV per tonne, and say whether it is cheaper to buy or to build.

Enterprise value Rs 12,000 crore, 8 times EBITDA, Rs 6,000 a tonne, and buying is cheaper. Market value is Rs 400 times 25 crore shares, Rs 10,000 crore, plus Rs 2,000 crore of net debt. Per tonne, that is 20% below the Rs 7,500 a new plant costs, and it comes with capacity today rather than in three years, provided the plants are as good as new ones.

Say the formula in five words, then the number. Rapid fire rewards the order of operations more than speed: each answer is the input to the next one. Enterprise value feeds the multiple, and the multiple and the per-tonne figure feed the buy or build answer, so one slip early spoils four answers. It is like reading directions to a driver: one wrong turn called early sends every later instruction somewhere else.

Market value is Rs 400 times 25 crore shares, Rs 10,000 crore. Enterprise value adds the Rs 2,000 crore of net debt, because anyone buying the whole company takes on its debt as well as its shares: Rs 12,000 crore. EV to EBITDA is 12,000 over 1,500, 8.0 times. EV per tonne is Rs 12,000 crore, which is Rs 1,20,00,00,00,000, over 20 million tonnes: Rs 6,000 a tonne.

Because both numbers price the same thing: one tonne of working capacity. Replacement costWhat it would cost today to build the same productive assets from scratch, including land, plant and approvals. is what a rival would spend to add a tonne; EV per tonne is what the market charges to own one that already runs. At Rs 6,000 against Rs 7,500, the market values Kumbhalgarh's plants at 80% of what it would cost to build them. Building the same 20 million tonnes would cost Rs 15,000 crore and three years of waiting; buying costs Rs 12,000 crore and delivers the capacity on day one.

Test whether a tonne here equals a tonne new. A discount to replacement cost is a bargain only if the plants are comparable: similar efficiency, limestone reserves for decades, and a location near the markets that buy the cement. An old kiln burning more fuel, or a plant far from demand paying heavy freight, earns less per tonne and deserves a lower price. Here EBITDA is Rs 750 a tonne; a builder paying Rs 7,500 would need about that just to earn a 10% pre-tax EBITDA yield, so ask what a new plant would earn before you call Kumbhalgarh cheap.