Mumbai: “India Cements Ltd reported a 40% drop in its July-September net profit, lagging analyst estimates on higher depreciation, a notional loss on foreign exchange and more taxes,” a top official said.
Its profit fell to Rs1.34 billion from Rs2.23 billion a year ago despite an increase in sales to Rs10.88 billion from Rs8.90 billion a year earlier. A Reuters poll of brokerages forecast a net profit of Rs1.61 billion for the quarter.
“Depreciation accounted for Rs497.6 million from Rs303.2 million year ago,” Managing Director N. Srinivasan told Reuters over the telephone.
“It also recorded a notional foreign exchange loss of Rs295.5 million on its foreign currency convertible bonds (FCCB) maturing in 2011, compared with a gain of Rs47.4 million in the same quarter of the previous year,” he added.
“The company’s operating profit remained almost flat at Rs2.99 billion against Rs3.08 billion, while its tax liablility doubled to Rs600 million,” Srinivasan added.
India Cements, southern India’s biggest cement maker, expects margins to improve during the last quarter of this fiscal on lower input costs as coal prices were cooling off while demand in south India continued to be strong.
“The demand for cement is quite strong in the market in which we are operating and it should go up in November and December after the monsoon gets over,” he said.
The company’s shares were trading 14.97% higher at Rs86.40 in a Mumbai market that was up 7%.