India Cements nets Rs 21 crore profit as prices nosedive

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. 

The operating performance during the quarter had substantially improved with a capacity utilisation of 80% as compared to 67% in the same quarter of the previous year. 

Overall volume of the company for the quarter under review was 30.75 lakh tons up by 16% as compared to 26.56 lakh tons in the same quarter of the previous year. The steep drop in NPR by nearly 9% when compared to same quarter of the previous year meant a bottom line impact of nearly Rs 104 cr for the quarter. With the increase in fuel price and petroleum products prices, the variable cost was also higher by 5% during the quarter.

Fixed cost was pruned down substantially with reduction in manpower cost, selling and distribution expenses, policy changes and such other actions to reduce the administrative overheads. Despite the lower NPR and higher variable cost, with the rise in volume and with reduction in fixed cost, the company could turn out an EBIDTA of Rs 162 cr against Rs 191 cr in the previous year a drop of 15%. The resultant profit before tax was at Rs 27 cr against Rs 40 cr. Net profit after tax was at Rs 21 cr against Rs 26 cr in the previous year.