Hit hard by a 9% drop in net plant realisation per tonne, coupled with a 5% increase in variable costs, India Cements reported a marginal drop in its net profit for the quarter-ended June to Rs 21 crore as against to Rs 26.44 crore in the year-ago period.
The steep drop in NPR meant a bottomline impact of nearly Rs 104 crore in the quarter. With the increase in fuel prices and petroleum products’ prices, the variable cost was also higher by 5% during the quarter.
“The company has turned out a reasonable performance, given the tough market conditions in the south arising out of regional imbalances in capacity. Despite the drop in selling prices of cement, the company could achieve this through increased volume, coupled with stringent control on fixed cost and selling expenses,” said N Srinivasan, vice-chairman and managing director, India Cements. The fixed cost was pruned down substantially with the reduction in manpower cost, selling and distribution expenses.