Backed by improved price realisation and reduction in variable and fixed costs, India Cements on Wednesday earned an impressive performance for the third quarter of FY21 by registering a net profit of Rs 62.02 crore as against a net loss of Rs 5.37 crore in the corresponding quarter of the last fiscal.
The total income of the company stood at Rs 1,162.91 crore as compared to Rs 1,194.42 crore. Though the company’s volume dropped by 11% in Q3, resulting in contribution loss of more than Rs 45 crore for the quarter, the Ebitda was substantially improved by 65% backed by the improved realisation and reduction in variable and fixed costs, to Rs 218 crore from Rs 132 crore. The Ebitda margin was at 19% against 11% in the previous year.
The overall Q3 volume of clinker and cement of the company stood at 23.77 lakh tonnes when compared to 26.66 lakh tonnes in the previous year, registering a drop of 11%. With the substantially higher monsoon in the southern states, the company utilised the opportunity to increase its presence in the long lead markets of central and east India although at a lower contribution.
N Srinivasan, vice-chairman & MD, India Cements told media persons through a virtual meet that even though the company has been operating with capacity utilisation of around 50% during the last nine months, owing to demand constraints, the company will not drop prices to get a marginal increase in the volumes.
“We will, at this point of time, only produce what we require and sell it at prices we decide”, he said. According to him, as the demand for cement picks up, the company would be able to scale up the capacity utilisation.
The net plant realisation was up by 11% when compared with the previous year but was lower by 5% on a sequential-quarter basis. The variable cost of production was further brought down during the quarter under review and was lower by 2% when compared to the earlier year.
Srinivasan said the cash-and-carry practice adopted by the company has been yielding rich dividends and it will continue with it going forward.
While the overall volume of the company for the nine months was lower by 29%, it was lower by 11% only during the third quarter of the year. The cement prices remained somewhat stable in some of the sates while it had undergone marginal fluctuations in some southern states but was still remunerative and higher than that of the previous year.
The company had continued its pro-active steps taken to control the fixed costs on contract labour, administrative and marketing overheads.
