Riding high on the 11% increase in net plant realisation (NPR), operational costs efficiency, lower fuel prices and higher capacity utilisation, India Cements has reported a 243% increase in its net profit for the quarter ended June 30, 2019 to `72.21 crore as compared to `21.03 crore in the same quarter last fiscal.

The Ebitda margin was much higher at 17% during the quarter under review as against 12% in the same quarter last fiscal and the Ebitda grew 50% to `245 crore as compared to `162 crore in the same quarter last fiscal.
Buoyed by an increased offtake coupled with better growth prospects in the coming years, the company has decided to add 3 million tonne capacity over the next two years through an integrated manufacturing plant in Madhya Pradesh and a clinker plant in Uttar Pradesh with an estimated capital expenditure of `1,400 crore to increase the overall capacity to 20 million tonne, said N Srinivasan, vice-chairman and managing director, India Cements.

Addressing a press conference here on Wednesday, he said, “Except in Andhra Pradesh, the company has done well across other states and the plant capacity utilisation has gone up from 70% in Q1FY19 to 77% in Q1FY20. Due to prices hikes over the last few months, the net plant realisation per tonne grew 11% to `3,650 during the quarter under review as compared to `3,290 a tonne in the same quarter last fiscal, with a gain of `360 a tonne.”

Total income grew to `1,472 crore, against `1,366.17 crore in the same quarter last fiscal.

The overall cement sales marginally declined to 30.42 lakh tonne as against 30.75 lakh tonne in the corresponding quarter of last fiscal. With the tight operational efficiency, the variable costs just gone up by only 1%, Srinivasan added.

Responding to questions on the expansion, Srinivasan said: “Unlike other sectors, cement sector will not be impacted as the demand for commodity always on the increase. We see demand to go up sharply in the coming years. Keeping in mind the overall potential growth, the company will add 3 million tonne in the next two years with an estimated investment of `1,400 crore.” The expansion will be funded through internal accruals as well birdge loans, he added.

According to him, the proposed expansion will be in Madhya Pradesh and Uttar Pradesh. The company has a mining lease in MP and is in the process of acquiring land for both mining and manufacturing plant.
Of the proposed 500 acres of mining land requirement, India Cements has already acquired 168 acres of land. The company is in talks with private land owners and it hopes to finalise the entire land requirement deals in the next four months. Meanwhile, the company will seek all necessary clearances to set up a new plant at Dammu in Madhya Pradesh. In UP, the company will put up a clinker plant near Allahabad to target north and northerneastern states, Srinivasan explained.