Freight, raw material costs hurt cement firms
JK Lakshmi, UltraTech, ACC report drop in net profit; Ambuja Cements, JK Cement post increase
Mumbai: India’s top cement makers have reported an increase in revenue on lower volumes in the quarter ended 31 December, although profit growth was crimped because of rising freight rates and raw material costs.
The nation’s largest cement maker ACC Ltd on Thursday reported a consolidated net profit of ₹ 251.24 crore for the quarter, down 46% from a year ago. However, revenue gained 2% to ₹ 2,768 crore. “Profits have been under pressure due to (higher) input costs and a change in the method of providing depreciation on fixed assets pertaining to captive power plants," said an ACC spokesman.
Ambuja Cements Ltd, however, reported a 5.33% rise in its December quarter profit at ₹ 1,293.21 crore from a year ago. Revenue increased by 14.3% to ₹ 9,795.03 crore.
JK Cement Ltd, too, saw a 25% rise in net profit at ₹ 54.38 crore in the December quarter. Revenue, at ₹ 688.08 crore, was up 12% from the same quarter a year ago. Shares of the company fell 3.14% to ₹ 307 on BSE.
JK Lakshmi Cement Ltd saw net profit drop 16.24% to ₹ 41.24 crore in the December quarter from a year ago, while revenue rose 12.2% to ₹ 493.68 crore.
“The results are in line with expectations as volume growth has been bad," said V. Srinivasan, an analyst at Angel Broking Ltd.
“The shrinking of profit was expected," said Teena Virmani, vice-president (private client group) research at Kotak Securities Ltd. “Overall costs also continue to stay high."
UltraTech Cement Ltd reported a net profit of ₹ 600.81 crore in the December quarter, down 2.6% from a year earlier. Revenue rose 6.5% to ₹ 4,882.08 crore.
Shares of UltraTech fell 1.67% to ₹ 1,929 on BSE.
The matter is being heard by a tribunal.
“Based on the advice of external legal counsel, the company believes it has good grounds for a successful appeal," ACC said in its Thursday press statement. “Accordingly, no provision is considered necessary in the above results."
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