India Cements reported a consolidated net profit of Rs 58.5 crore for Q1FY25, a significant turnaround from the loss of Rs 87 crore in the same quarter last year. This recovery was largely due to a one-time gain of Rs 241 crore from the sale of its Parli grinding unit in Maharashtra.
In an exchange filing, India Cements stated, “The company has, in the month of April 2024, divested its grinding unit at Parli, Maharashtra, mobilising a sum of Rs 315 crore. The profit arising on sale of the unit amounting to Rs 240.68 crore is disclosed as an Exceptional Item.”
However, consolidated revenue from operations in Q1FY25 dropped by 28.5% to Rs 1,026.8 crore, down from Rs 1,436.7 crore in the corresponding quarter of the previous fiscal year.
“The capacity utilisation for the company was adversely affected due to a free fall in cement prices, resulting in suboptimal operating performance for the quarter ended 30 June 2024,” the company noted.
The decline in capacity utilisation, driven by a steep drop in cement prices, led to a negative Ebitda of Rs 22 crore, compared to a positive Ebitda of Rs 12 crore in the same quarter the previous year. Excluding the asset sale gain, profit before tax was Rs 81 crore, a marked improvement from a loss of Rs 99 crore a year ago.
Following these developments, rating agency Care Edge has placed India Cements’ bank facilities on ‘Rating Watch with Positive Implications,’ reflecting the impact of the recent acquisition of a controlling stake by UltraTech Cement.
Last month, UltraTech Cement, India’s largest cement manufacturer, announced that its board had approved the purchase of a 32.72% equity stake from the promoters and their associates of India Cements. This followed UltraTech’s earlier acquisition of a 22.77% stake in June 2024.
India Cements’ shares ended flat at Rs 366.50 on the National Stock Exchange.
