Q2 Results: Ramco Cements net profit up 40% at Rs 236 crore

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November 3, 2020 3:45 AM

During the quarter, the stability in cement prices, improved sale of its flagship products and premium products in the trade segment have played out well for the overall improvement of realisations, the company said in a statement.

ACC, JK CementCentrum Broking said that prices lost strength in the last fortnight of the month and reversed back to the lower levels

Chennai-based Ramco Cements has reported a net profit of Rs 235.77 crore for the second quarter of FY21 as against Rs 168.15 crore in the corresponding quarter of last fiscal, registering an increase of 40%. The company’s revenue stood at Rs 1,265.31 crore as compared to Rs 1,325.88 crore.

The company’s Ebitda saw an increase of 48% at Rs 450.30 crore as against Rs 304.43 crore on improved margins. During the quarter, the stability in cement prices, improved sale of its flagship products and premium products in the trade segment have played out well for the overall improvement of realisations, the company said in a statement.

The variable cost for the quarter has come down due to the lower fuel cost and improvement in blending ratio. The commencement of the waste heat recovery system (WHRS) operations of 9 MW in Jayanthipuram in September 2020 and another 9 MW WHRS also getting ready for commissioning during Q3 in Jayanthipuram, augur well for further cost reduction in the coming quarters.

The fuel procured in the earlier quarters has helped to keep a check on overall fuel cost during the current quarter, while the market prices of pet coke and coal have witnessed a sharp increase during the quarter.

The company said the lower sales volume during the quarter has resulted in under-absorption of overheads, however, it has taken various sustainable austerity measures to reduce overheads. During the quarter, the average cost of interest-bearing borrowings was reduced to 6.51% from 7.36% compared to the previous corresponding period.

During the six months up to September 30, 2020, the company has incurred Rs 685 crore towards capex, including for ongoing capacity expansion programme. The balance capex to be incurred was to the tune of Rs 881 crore. The company has reduced the borrowings by Rs 104 crore after spending for capex of `685 crore while its gross debt stood at Rs 2,920 crore, it said.

During the quarter, the sale of cement was at 2.21 million tonnes, as compared to 2.72 million tonnes in the corresponding period of the previous year with a de-growth of 19%. The sale is impacted mainly because of lockdown imposed, restricted access in containment zones due to Covid-19 and heavy rains in Kerala, Karnataka, Andhra Pradesh and Telangana during August and September 2020.

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