BackIndia Cements Q1 profit at `40 crore
Revenue fell to `1,075 crore from `1,235 crore in the year-ago period
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Chennai: India Cements Ltd on Wednesday reported a better-than-expected net profit for the quarter ended 30 June, helped by higher cement prices.
The Chennai-based cement maker made a net profit of ₹ 40 crore in the three months, compared with a net loss of ₹ 3 crore a year earlier. A Bloomberg survey of analysts had estimated net profit at ₹ 30 crore.
Revenue fell to ₹ 1,075 crore from ₹ 1,235 crore in the year-ago period, missing the analysts’ average estimate of ₹ 1,099 crore.
The cement market has started to see prices stabilize (at higher levels) despite sluggish demand, said N. Srinivasan, executive chairman and managing director. The price of cement was ₹ 3,930 a tonne in the quarter ended 30 June, up ₹ 600 from the year-ago period.
“We expect a demand uptick for cement in Andhra Pradesh for building its capital but it will be witnessed only early 2016," said Srinivasan. Andhra Pradesh is building a new capital because Hyderabad will be transferred exclusively to Telangana, which was carved out as a separate state last year, in 2024.
The cement industry is the midst of its longest slump, one that has been caused by excess supply of the building material and absence of demand growth in the past three years, he said.
Margins have improved because of the better price realization, said a Mumbai-based analyst who tracks the company. The analyst didn’t want to be named.
The earnings before interest, tax, depreciation and amortisation margin, an indicator of operating profitability, widened to 18.2 % in the fiscal first quarter from 12.9 % a year and 17.8 % in the quarter ended 31 March.
The authorities have issued a provisional order under the Prevention of Money Laundering Act 2002 attaching certain assets of the company for an aggregate value of ₹ 120 crore. India Cements is in consultation with legal advisers in this regard, the company said in a statement.
India Cements shares closed at ₹ 83.35, down by 0.24 %, as the benchmark Sensex fell 1.27% to 27,512.26 points.
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