With cost control and a drop in variable costs, India Cements has reported a 40 per cent jump in net profit for the fourth quarter of 2015-16, compared with the corresponding quarter of the previous year. Net profit stood at ₹51.21 crore (₹36.60 crore) on total income of ₹1,154.14 crore (₹1,043.10 crore) for the quarter ended March 31, 2016.

Finance costs dropped to ₹85.30 crore (₹105.84 crore); power and fuel costs fell to ₹258.88 crore (₹273.54 crore) and transportation and handling costs were at ₹234.44 crore (₹207.74 crore).

Cement volume during the quarter jumped to 24 lakh tonnes (19.98 lakh tonnes), thanks to a spurt in demand in March.

N Srinivasan, Vice-Chairman and Managing Director, said the drop in variable costs, particularly of power and fuel, and the company’s focus on cost control, have contributed to the performance. Controlling logistics costs is another key area that will help, he said.

Market conditions continue to be slow in terms of cement demand and the company is at about 60 per cent capacity utilisation.

But with cement prices stable and given the positive performance, “the upside potential is high” as market picks up, he said.

Monsoon boost Predictions of good monsoons bode well for the company, as the primary sector pick-up will boost demand. Also, there is optimism on sustained growth in the infrastructure sector.

Over the next three years the company’s capital expenditure will be around ₹350 crore, including the establishment of a new grinding unit in Sankarnagar.

For the year ended March 31, 2016, the company reported net profit of ₹134 crore (previous year net loss: ₹1.19 crore) on total income of ₹4,889.64 crore (₹5,082.66 crore).

The company has recommended a dividend of ₹1 (10 per cent) a share of ₹10.

On the BSE the company’s shares closed 4 per cent higher at ₹92.75 over the previous close of ₹88.95.

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