India Cements eyes double digit growth in 2019-20

This was due to the prevalence of uncertainty in the market, sand mining issues and the Supreme Court’s short ban on the usage of pet coke. The increase in cost of fuel and petroleum products added to the stress on the industry. 

The company reported a net profit of Rs 15.24 crore during the third quarter ending Dec 31, 2017 after accounting for MAT credit entitlement of Rs 3.25 crore. In the first nine months, net profit stood at Rs 65.35 crore on a total income of Rs 3,958.40 cr. During the same quarter, a year ago (Dec 31, 2016), net profit was Rs 35.34 crore and total income of Rs 1,270.95 crore. 

The MD noted that the figures are not comparable due to the merger of subsidiaries Trinetra Cement Ltd and Trishul Concrete Products Ltd with India Cements. Srinivasan said, “The overall sales volume including exports was 27.26 lakh tonnes. Sales took a big hit in Tamil Nadu, which is 

our main market.  In the south, with capacity overhang, the cement industry saw a growth of only 6% during the Q3.  The overall 9 month-growth in the region was meagre.” 

The company resorted to cutting fixed costs by closing a few divisions, rationalising and reducing manpower. This helped it maintain the overall profit margin. Srinivasan added that the company reduced its power cost by using coal imported from its coal mines in Indonesia for power generation in its captive power plants. 

With respect to demand, Andhra Pradesh and Telangana were the big contributors, apart from Maharashtra, which is on a fast-track thanks to the ongoing road projects. 

He mentioned that the recent interim stay granted by the Supreme Court staying the Madras High Court Order to shut down all river sand quarries across the State is expected to ease the availability of sand in Tamil Nadu and pave the way for improvement in cement demand in the medium term. 

However, Srinivasan expects the demand to pick up from the current quarter onwards resulting in double digit growth in 2019-20 after the general elections.