The Hindu Business Line : India Cements: Maintaining margins

For the first quarter of FY09, India Cements recorded a 17 per cent increase in its earnings before interest, depreciation and tax with net sales rising over 17 per cent.

The net profit (excluding exceptional items) for the quarter was down by 6 per cent to Rs 163.89 crore.

The margin at the operating level was flat and PAT margin registered a 4 percentage point decline.

The company had reported notional loss on its foreign currency convertible bonds to the extent of Rs 21.75 crore during the quarter, which hurt the bottom line.

Higher depreciation

Power and fuel expenses rose by 31 per cent compared with the June quarter last year.

Despite higher expenditure on fuel and power, the company, however, managed to maintain its operating margins at 31.8 per cent.

The company’s interest expenditure stood reduced by Rs 8 crore due to one-time loan settlement of Rs 48 crore during the last quarter. However, this couldn’t help the net profit and it dipped by 6 per cent to Rs 163.89 crore on higher depreciation and tax incidence in the quarter.

Both the demand and prices for the quarter were strong.

Orders from irrigation and infrastructure projects in Andhra Pradesh kept the year-on-year demand at a robust level of 10.80 per cent in May.

Higher strength

The prices too were seen around Rs 255 per bag in Chennai.

The company could display higher strength in performance in the second quarter, if the monsoon does not dampen sales in the coming months.

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