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Emami Cement Ltd expects to break even by the end of this financial year and earn profit by the next fiscal.
According to Vivek Chawla, Wholetime Director and CEO, the growth in bottomline will be driven primarily by value and volume of sales.
The company’s topline is likely to grow to ₹1,400-1,500 crore by the end of the current fiscal, once it is able to achieve sales volumes of 3.2 million tonnes (mtpa). This will be 80 per cent of its total installed capacity of four mtpa.
“Usually cement companies take longer to break even. Despite being a new entrant into the segment we are positive of making profits by next fiscal. Our debt position is also fairly comfortable,” Chawla told BusinessLine on the sidelines of a media interaction here.
Emami Cement, part of the ₹50,000-crore diversified Emami Group, has two plants — an integrated two mtpa unit at Risda in Chhattisgarh and a two mtpa grinding plant at Panagarh in West Bengal.
The company, which commenced commercial production at its Chhattisgarh plant in December 2016 and Panagarh plant in February 2017, clocked revenue of ₹200 crore during the December-March period.
During the current fiscal, the company reported sales of around ₹410 crore till August 2017, he said.
Retail businessNearly 60 per cent of its business comes from the retail segment and the from institutional sales.
“Though we could have gone aggressive on the volume sales by pushing down prices we did not do so. We are looking at the value segment,” Chawla said.
The average price of cement in the retail segment is higher by ₹50-80 a bag compared to the institutional segment, depending on the market and the demand.
The company expects the share of retail to increase to 80 per cent by the end of this fiscal.
The company, which produces OPC (Ordinary Portland Cement), PPC (Portland Pozzolana Cement) and PSC (Portland Slag Cement) variants under the ‘Emami Double Bull’ brand, has a seven per cent market share in Chhattisgarh.
Expansion of plantsThe company has so far invested ₹3,400 crore at its Chhattisgarh and Panagarh plants and another ₹600 crore on a two-mtpa grinding plant at Jajpur in Odisha.
The work on the Odisha plant is expected to complete by the end of FY-19.
It has acquired on lease limestone mines in Rajasthan and Andhra Pradesh with deposits of around 300 million tonnes and 220 mt, respectively.
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