Riding high on low volume with better than expected per tonne realisation at the net level over the last few months, south-based cement companies, such as India Cements, Madras Cements and Chettinad Cement Corporation, have reported impressive performance in the first two quarters of current financial year as compared to the same period last financial year.
These companies hope that they can sustain the profit momentum over the next two quarters with better operational efficiencies and low capacity utilisation at the same price.
This is despite the fact that Andhra Pradesh has been reporting a negative growth of 17% over the last two quarters due to political unrest apart from increasing working and raw material costs, higher power rates, sources said. While the industry grew by a meagre 1.63% in the first two quarters, southern region, led by sharp fall in AP, reported a negative growth of 7.5%, sources said.
Despite the odds, these companies have reported better profit margins than their peers in the last quarters.
India Cements has reported a profit of R102.03 crore in Q1 and R70 crore in Q2 of this financial year compared to R25 crore and loss of R34 crore, respectively during the same two quarters of last financial year. Madras Cements reported profits of R98 crore and R111 crore in Q1 and Q2 this financial year as compared to R72.6 crore and R31 crore during the same quarters of previous financial year. Chettinad Cement reported better profits in the first two quarters of current financial year at R69.64 crore in Q1 and R65 crore in Q2 as compared to R20.05 crore and R18.18 crore, respectively during last financial year.
