India Cements says the management is stable to focus on cement biz

India Cements Ltd on Wednesday asserted that the management in the company was stable and it would continue its focus on cement business.

N Srinivasan, Vice Chairman & Managing Director of the Company responded to the ‘speculative reports’ that stated billionaire Radhakishan Damani was considering taking control of Chennai-headquartered company, which has been in the cement business for about seven decades.

“We have already clarified to SEBI. There is nothing to say. Stability of management will be ok. He (Damani) is a respectable person who has chosen to invest in India Cements. I should not say more. This company has been around for more than 70 years. We will continue to make cement,” said Srinivasan while announcing company results for March 2020 quarter and FY20.

Elaborating on the company’s performance, he said India Cements was in the verge of reporting better numbers for FY20 after a slow start in Q1. But COVID19 and associated lockdown applied brakes on the company’s recoveries in volumes and sales in the March quarter.

“We lost about ₹85 crore worth of cement volumes in March month itself,” he said.

However, post-COVID19 lockdown, improvements were seen on demand-side from May and June was also turning better. “Actually, demand is much better than our earlier expectation, and with monsoon not having failed, rural demand is also good. I feel the demand scenario will get better once the lockdown is lifted in more places,” said Srinivasan.

While the drop in volume alone had accounted for a contribution loss of about ₹150 crore, better cost measures helped mitigate the impact, and the net effect was only to the tune of about ₹60 crore.

Apart from the better-than-expected demand scenario, the northward movement of prices also gives some hope for the company. In FY20, net plant realisation increased by ₹38 to ₹3425 per tonne.

The company reported a net loss of ₹111 crore for the quarter ended March 31, 2020 as against a net profit ₹44 crore in the year-ago quarter, on account of COVID19 impact on March cement sales.

The company’s exceptional items for the year and quarter March 31, 2020 included impairment provision of ₹100.04 crore relating to receivables from certain subsidiaries.

Revenue dropped to ₹1152 crore when compared with ₹1564 crore in Q4 of 2018-19.

For the year ended March 31, 2020, the company’s net loss was ₹36 crore as against a net profit of ₹69 crore in the previous fiscal.

Revenue from operations stood at ₹5058 crore as against ₹5628 crore.

The Board has recommended a dividend of ₹0.60 per share for the year ended March 31, 2020.

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