phased manner through mill upgradation and cost optimisation.
The company's cement subsidiary, UltraTech has reported satisfactory performance for the quarter.
Cement sales volumes were maintained at 10.4 million tones as demand remained subdued. Net revenue stood at Rs 5,164 crore as compared to Rs 4,800 crore, up by eight per cent.
The increase in railway freight and hike in diesel prices led to higher costs of raw materials and logistics. The softening in prices of imported coal and fuel mix optimisation helped in reducing energy costs, though rupee depreciation partially offset the benefit, the release said.
The company's brownfield expansions at Chhattisgarh and Karnataka totalling 9.2 million tonnes per annum cement capacity are on track. Clinker capacity is expected to be completed by Q1 FY 2013-14. Consequently, UltraTech's cement capacity will stand augmented to 62 million tonnes per annum.
Commenting on the outlook, the company said that the prevailing global economic conditions, coupled with the surplus capacity in China, the VSF industry is expected to remain under pressure for some more time.
However, in cement, the long term demand is expected to grow by an average eight percent with housing, infrastructure and allied spending being key value drivers.
Industry capacity utilisation is likely to improve to 80 percent in FY 2016 as the pace of capacity addition will slow down. Input cost is likely to increase in line with the general inflation with margins remaining range bound.