India Cements plans to expand its capacity in Rajasthan with the possible investment of around Rs 650-700 crore to cater to increasing demand in Gujarat and Madhya Pradesh.

“We are examining” on the expansion on the integrated plant in Rajasthan, N Srinivasan, Vice-Chairman and Managing Director said, announcing the financial results of the company for the third quarter ended December 31, 2012.

The present capacity of the plant in Rajasthan is over one million tonnes, he said, adding plans are afoot to add one more line with similar capacity. The expansion would help the company cater to the Gujarat and Madhya Pradesh markets.

With a total capacity of 15.5 million tonnes, the company has plants in Tamil Nadu, Andhra Pradesh and Rajasthan.

The company’s net profit dropped to Rs 26.12 crore in the third quarter from Rs 56.31 crore in the corresponding quarter of the previous year.

Total income increased to Rs 1,083.88 crore in the third quarter from Rs 943.95 crore in the same period last year.

“The company has been facing challenges operationally, especially on the cost front. Inspite of higher power tariff in Andhra Pradesh and Tamil Nadu, hefty power holidays and subdued cement demand, we were able to post healthy growth numbers,” Srinivasan said.

He said despite the subdued forecast on GDP growth in the current fiscal and supply overhang, which persisted in the South, it was heartening to note the company could register a 10 per cent increase in volume during the quarter ended December last year.

“Judging by the volume growth witnessed in January 2013, we could reasonably expect a similar trend during the last quarter of the fiscal 2012-13,” he said.

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