India Cements Quarterly Profit Rises Despite Sales Decline
India Cements Ltd, a prominent cement manufacturer based in Chennai, reported a consolidated net profit of ₹58.47 crore for the quarter ending June 2024, highlighting a notable India Cements quarterly profit despite challenges. This profit was achieved even with a significant 26% decline in sales volume, primarily due to reduced capacity utilization stemming from a persistent liquidity crunch. A notable financial event for the company was the sale of its grinding unit in Parli, Maharashtra, in April, which added an exceptional gain of ₹240.68 crore to the quarterly profit. Excluding this exceptional item and before taxes, the company faced a loss of ₹147.97 crore for the quarter.
In comparison to the same quarter last year, when India Cements reported a net loss of ₹87.40 crore, the current quarter’s performance marks a significant turnaround in the India Cements quarterly profit. However, the company’s revenue from operations fell by 28.53% to ₹1,026.76 crore, down from ₹1,436.74 crore in the previous year.
The company, led by N Srinivasan, attributed the reduced capacity utilization to ongoing liquidity challenges caused by previous losses. This situation prevented India Cements from capitalizing on reduced fuel costs, further shrinking operating margins due to low sales volumes. The company also faced higher production costs compared to its peers, influenced by the varying ages of its plants and declining cement prices, which adversely affected dispatches and profit margins.
During the quarter, the cement and clinker volume dropped to 19.61 lakh tonnes from 26.66 lakh tonnes in the previous year, reflecting a decrease of over 26%, which influenced the India Cements quarterly profit. The company’s EBITDA was negative at ₹22 crore, compared to a positive ₹12 crore in the previous year. Additionally, interest and other charges increased to ₹82 crore from ₹58 crore, while depreciation rose to ₹55 crore from ₹53 crore, resulting in a loss before extraordinary items of ₹160 crore, compared to a loss of ₹99 crore in the prior year.
Total expenses for the quarter decreased by 22.76% to ₹1,190.24 crore, while total income fell by 27.81% to ₹1,042.27 crore, impacting the overall India Cements quarterly profit.
Looking ahead, India Cements is optimistic about future prospects. The company anticipates that normal rainfall will boost rural demand, and significant government investments in infrastructure and housing over the next five years will drive growth. Additionally, special financial support for Andhra Pradesh is expected to enhance economic activity in the region, improving medium-term prospects for the cement industry.
On the stock market, shares of India Cements closed 0.34% lower at ₹366.90 on the BSE.
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