The Hindu Business Line : India Cements posts record net profit at Rs 112 cr

India Cements Ltd has posted a net profit of Rs 112.59 crore for the quarter ended June 30, 2006, which figure, it says, "far exceeds even the highest ever annual profit registered by the company at Rs 87 crore during 1998-99."

With good demand in its major markets and firm prices, a situation that the company expects will last for at least two to three years, India Cements is confident of wiping off its accumulated losses by the third quarter of this year.

Mr N. Srinivasan, Vice-Chairman and Managing Director, said the accumulated losses as on March 31, 2006 were Rs 260 crore, which would come down to Rs 150 crore at the end of the first quarter. The company's performance, he told a press conference, was helped by strong demand and strengthening of prices in Andhra Pradesh and Karnataka. This demand had absorbed the slack in the southern region. In the April-June 2006 period, the company sold 18.52 lakh tonnes of cement compared to 17.66 lakh tonnes in the same period last year.

Boom time

A press release said the cement industry was going through a boom phase with substantial growth in demand. Cement consumption was growing at 9.5 per cent across the country, over and above the double-digit growth achieved last year. Pockets of shortages were emerging and the situation was likely to continue for the next three to four years.

"The cement prices have already firmed up significantly over the last few months and given the strong supply-demand scenario, the prices are expected to improve further," it said.

Mr Srinivasan said the average realisation per tonne had gone up by 23 per cent to Rs 3,019 in the first quarter of this financial year against Rs 2,448 in the corresponding quarter last year.

The company's total debt stood at Rs 1,280 crore, of which about Rs 500 crore would come under the corporate debt-restructuring scheme that the company had undertaken. India Cements hoped to repay a substantial portion of this high-cost debt during the year, thus bringing down its average cost of borrowings from 10.5 per cent now. "What we have forecast is that by March 2007, our debt will be less than my equity," Mr Srinivasan said. The debt equity ratio was 1.16, which would fall below 1. The paid-up equity share capital was Rs 206.63 crore.

Asked about talk in the market of an international cement company buying into the company, Mr Srinivasan said India Cements was entering its 60th year under the same promoters. "We have no interest (to sell) and no behavioural pattern to also indicate that we will go and sell to somebody. We will continue to grow. We will be a strong Indian company," he said.

More Stories on : Financial Performance | Cement | Outlook

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Heavy rains likely during weekend in central parts, West Coast

Gold is investors' darling

Indian crude oil basket touches all-time high

India Cements posts record net profit at Rs 112 cr

Sale of security gizmos rises after blasts

Wipro to offer e-waste disposal service from Sept 1

Wheat output estimate pruned to 69.48 m tonnes

ICI board to consider share buyback

Market melts on FII selling, oil price surge

Stocks riding on realty sector among the worst hit in market meltdown

Subsidy to recharge textile sector

UTI Bank: Sustained interest seen

DoT cracks the whip on cos for grey market calls

Marketing exclusivity for city gas distribution under study