India Cements posts ₹62-cr Q3 profit amid cost control

India Cements on Wednesday reported an impressive performance for the December 2020 quarter with improvements in margins and profit, helped by stable prices amid a drop in sales.

For Q3 FY21, the company posted a net profit of ₹62.02 crore, against a net loss of ₹5.37 crore in the year-ago quarter. The EBIDTA margin was at 19 per cent, against 11 per cent in the previous-year period.

N Srinivasan, Vice Chairman and Managing Director, said some of the key measures that the company undertook during the post-lockdown phase continued to help it stay profitable.

Zero lay-offs

Fixed costs were controlled without laying off a single employee during the fiscal, he said.

The cash-and-carry model in cement sale and avoiding sales below certain prices despite lower volumes also helped the company improve its bottomline, he added.

The overall volume of clinker and cement fell 11 per cent at 23.77 lakh tonnes (26.66 lakh tonnes).

Its revenue was lower at ₹1,160 crore (₹1,191 crore). But total expenses dropped to ₹1,074 crore (₹1,205 crore).

With subdued demand in the southern States, the company increased its focus on markets such as Central and East India due to strong demand and stable prices. The strategy helped it boost EBIDTA to ₹218 crore (₹132 crore).

Net plant realisation stood at ₹3,703 per tonne (₹3,342 per tonne). Capacity utilisation stood at about 50 per cent (69 per cent). The company has been seeing improvements in capacity utilisation every quarter and expects the trend to continue in Q4, too.

To a question on the increasing investment by billionaire investor Radhakishan Damani, Srinivasan said: “He is a famous and outstanding investor. The fact that he has chosen to invest in India Cements...I feel good. I never comment about people investing in India Cements.”