Announcing a strong performance for March 2021 quarter and FY21, India Cements presented a positive outlook for cement demand for the current fiscal amid disruption caused by the second coronavirus wave.
Helped by stable prices and tight cost control measures, the company registered a net profit of ₹222 crore for the full year 2020-21 when compared with a net loss of ₹36 crore in the previous fiscal.
In FY21, total volume of clinker and cement fell 19 per cent at 89.02 lakh tonnes (110.22 lakh tons in FY20). Revenue stood at ₹4,437 crore as against Rs.5057 crore in FY20.
Improvement in net plant realisation (up 16%) together with reduction in fixed cost more than made up the shortfall in cement sales and resulted in higher EBIDTA of ₹830 crore as compared to Rs.613 crore in the previous year.
For the quarter ended March 31, 2021, the company posted a net profit of Rs.72 crore when compared with a net loss of ₹111 crore in the year-ago period on the back of EBIDTA of ₹213 crore, which was significantly higher when compared with ₹85 crore in March 2020 quarter. Revenue stood at ₹1,450 crore (₹1,152 crore).
However, the company faced pressures on variable costs which went up by 10 per cent due to higher input prices and other factors in Q4. The cost pressures continue.
“We increased cement price by about ₹10 per bag in May and June month may also see an increase of ₹10-15 per bag,” N Srinivasan, Vice Chairman & Managing Director of India Cements said.
Demand should go up
He termed the current disruption as temporary and expressed hope that the lockdown will start to ease from June onwards starting from Northern and Western regions, followed by Southern regions later.
Cement set for big growth in FY22 on infra, realty revival
“This is a minor setback and pent-up demand will come back after June due to bigger thrust on infrastructure development by the Central Government. Before the second wave, several parts of the country witnessed cement shortages. So, demand is natural, and the only question is how long the lockdown will continue,” he added.
Srinivasan said the company would complete the capex plans in Sankar Nagar and Waste Heat Recovery Project in Chilamkur in Andhra Pradesh. But will take a call on expansion in the northern region later.
The Board approved a dividend of ₹1 per equity share of ₹10 each for FY21. It also approved the reappointment of N Srinivasan as Managing Director of the company for a period of five years with effect from May 26, 2021.