BackMadras Cements Q4 net drops 35%, misses estimates
Higher freight charges, power and fuel expenses dent earnings, net sales down 5%
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Chennai: Madras Cements Ltd posted a fourth-quarter profit that missed analysts’ estimates as higher freight charges and power and fuel expenses dented its earnings.
Expenses rose 13% for the quarter to ₹ 844.62 crore primarily due to an 11% increase in power costs to ₹ 193.87 crore and transport and handling rose 21% to ₹ 224.46 crore.
Net profit dropped 35% from a year ago to ₹ 64.15 crore and net sales fell 5% to ₹ 927.23 crore. Analysts polled by Bloomberg were on average expecting a profit of ₹ 89.9 crore on sales of ₹ 1,035.3 crore.
“These numbers are below our expectations," said an analyst who did not want to be named. “It is mainly due to a fall in average price realization of cement bag. We were expecting a 1-2% drop in the quarter, but the realization has dropped 8%. This could be due to change in their market mix, where sales from traditional high price markets like Kerala and West Bengal could have fallen."
Rival India Cements Ltd posted a 60% drop in fourth-quarter profit due to similar reasons of higher freight rates and power costs.
Shares of Madras Cements closed at ₹ 232.45 each, down 5.06%, on BSE, while the benchmark Sensex was up 0.34% at 20,215.40 points.
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