India Cements bounces back to black, nets Rs 72 crore profit in Q4

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May 25, 2021 1:15 AM

N Srinivasan, vice chairman & MD, India Cements, said the company could withstand cost pressures through improved operating efficiencies, substantial savings on discretionary overheads and increased volume, together with stable pricing of cement.

india cementThe cement sector saw severe headwinds in demand in the early half of last year, and it did benefit from the lower prices of key operating costs.

India Cements on Monday reported a standalone net profit of Rs 71.63 crore for the fourth quarter of FY21, bouncing back from a net loss of Rs 111.07 crore in the corresponding quarter of last fiscal despite disruptions due to Covid-19. The cement major posted income of Rs 1,461.44 crore as against Rs 1,169.92 crore.

N Srinivasan, vice chairman & MD, India Cements, said the company could withstand cost pressures through improved operating efficiencies, substantial savings on discretionary overheads and increased volume, together with stable pricing of cement. For the fourth quarter, the company had an Ebidta of Rs 213 crore, more than double the year-ago figure of Rs 85 crore. Given the pandemic, the performance of the company “can be considered to be highly satisfactory”, Srinivasan said.

The quarter under review witnessed a steep rise in the prices of input materials like fuel and petroleum products, packing costs, one-off fixed costs in manpower, and higher impact on cost on account of drawal of stocks.

At 29.9 lakh tonne, overall volume for Q4 was 13% higher than 26.47 lakh tonne, including clinker, recorded in the same quarter of last year. While net plant realisation was up 16%, variable cost was significantly affected by the impact of higher input prices of fuel and oil, the company said.

With cement prices picking up in east, north east and central India, the company expanded its marketing zones in these places. It continued taking steps to control the fixed cost on contract labour, administrative and marketing overheads with a total ban on travel and by cutting down other discretionary expenses.

India Cements said net plant realisation for the year was up 12% when compared to the previous year. Variable cost of production was maintained as that of the previous year, despite the higher cost impact due to drawal of clinker and cement stocks at higher cost and increase in the cost of input materials. Fixed cost was lower than the previous year despite the one-off charges in salaries. While the drop in cement volume meant a contribution loss of around Rs 300 crore for the year, the improvement in net plant realisation together with reduction in fixed cost more than made up the shortfall, it said.

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