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Our Bureau

Chennai, July 30 “Unabated demand for cement,” increased blending and higher prices have contributed to India Cements holding on to margins, according to Mr N. Srinivasan, Vice-Chairman and Managing Director.

However, net profits for the first quarter ending June 30, 2008, were down as compared to the corresponding quarter in the previous year because of higher tax (current) Rs 61.50 crore (nil), deferred tax of Rs 12 crore (Rs 30 crore) as compared to the previous quarter when carryover losses of over Rs 300 crore had provided a tax shield. Foreign exchange translation resulted in an exceptional expenditure of Rs 21.75 crore against a gain of Rs 8.76 crore previously.

The company was able to protect its margins with profit before interest and depreciation (EBIDTA) growing 17 per cent to Rs 311 crore. Blended cement production increased to about 70 per cent of its output (65 per cent) and increased prices with gross realisation at Rs 4,016 a tonne (Rs 3,598) supported the margin growth, he said.

The market continues to be buoyant with the south registering a 12 per cent growth with Andhra Pradesh hitting a high of 25 per cent, Tamil Nadu 12 per cent and Karnataka 5 per cent. The industry anticipates demand in Karnataka to grow in double digits from the current quarter .

India Cements expects to get its first phase of expansion on stream to conclude the current year with a capacity of about 14 million tonnes a year against the present 9 million tonnes.

On the NSE, the company’s shares of Rs 10 closed at Rs 149.95 against Tuesday’s close of Rs 142.50 share.

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