India Cements nets Rs 35 crore Q3 profit, earns Rs 1,270 crore

Asserting that the sale of cement has not been impacted by the note ban, India Cements reported gratifying results with a net profit at Rs 35.34 cr during the third quarter ending December 31, 2016. This is against Rs 3.16 crore during the same quarter last year, when heavy rains and flood hit Chennai and the coastal areas of Tamil Nadu during December 2016, adversely affecting the consumption of cement. 

The overall sales volume including clinker and cement exports went up by 22 pc to 23.59 lakh tonnes against 19.37 lakh tonnes in the previous year. The turnover during Q3 this year improved to Rs 1,270 crore (Rs 1,066 crore). In the first nine months of this year, net profit increased to Rs 141.73 crore compared to Rs 79.46 crore in the same quarter of 2015-16 and turnover to Rs 3,791 crore (Rs 3,520 crore).

Addressing the media, N Srinivasan, Vice-Chairman & MD, India Cements said, “We have reported gratifying results during the quarter in spite of uncertainty created on account of demonetisation of high value currency notes from early November 2016. Our good performance has belied the impression that demonetisation has affected cement consumption.” 

He adds, “Accompanied by our marketing heads, I visited over 100 counters in the southern States. We met retail and wholesale dealers and interacted with them to understand the impact of the demonetisation on the demand. There seemed to be no significant impact of the same in the sector. We also educated dealers on making payments through cheques, cards and digital modes. This has paid dividends with increase in our sales.” When probed about the firm’s plan to reduce debt, Srinivasan said last year, the company repaid Rs 250 crore. This has reduced the term debt to Rs 1,900 crore. This year, it planned to reduce another Rs 250 crore of which it has repaid Rs 180 crore so far. 

The overall Rs 500 crore debt reduction in two years will reduce further finance cost. The Company is working towards having a term debt below Rs 1,000 crore, which Srinivasan feels will be a comfortable state. The Company has also embarked on refinancing the debt. A significant portion of the debt was refinanced resulting in reducing the near term commitments which has also improved the rating of the Company.

One of the salient points raised by N Srinivasan and his team from India Cements was about the sale of cement being imported from Pakistan in ports such as Thoothukudi in TN, and Kochi in Kerala. The team estimated that about 40,000 to 50,000 tonnes of cement was being brought into Tamil Nadu and about 15,000 tonnes was being brought into Kerala. Referring to PM Narendra Modi’s surgical strike on terror, Srinivasan said that the Centre should also strongly look into curbing such imports to protect the interests of national players.