Rising costs of fuel and power and a lukewarm market have contributed to India Cements’ net profit dropping by 60 per cent in the fourth quarter of 2012-13 as compared with the corresponding period in the previous year.
The company reported a net profit of Rs 26.28 crore (Rs 64.92 crore) on net sales of Rs 1,190.64 crore (Rs 1,116 crore) for the fourth quarter ended March 31, 2013.
“The story of the year is increased cost,” said N. Srinivasan, Vice-Chairman and Managing Director.
High costs of diesel, coal and electricity have hit realisation. Rail freight and diesel price hike have contributed to freight costs going up to Rs 966 a tonne of cement from Rs 800 earlier; cement prices in Hyderabad have dropped to Rs 190 a 50-kg bag from Rs 265. The demand too has been lukewarm, he said.
However, he was more buoyant on the outlook for the current year as the company’s investments in securing coal and electricity through captive thermal plants are falling into place. India Cements will reap the benefits of these investments in the current year.
Captive plant
A 25-MW captive thermal power plant will be commissioned this week at Vishnupuram, Andhra Pradesh, and another 25 MW in a couple of months.
The company has adequate captive power in Tamil Nadu. Over 42,000 tonnes of coal, from its own mines in Indonesia, will reach Tuticorin Port soon. Captive coal gives the company long term security on costs and availability, he said.
Also, the projected growth in economy – always good news for cement as both move in tandem, he said.
The company will bet on higher volumes in the current year with the demand expected to grow.
For 2012-13, the net profit was down 44 per cent over the previous year at Rs 163.55 crore (Rs 292.97 crore) on an income of Rs 4,613.62 crore (Rs 4,215.19 crore).
On the NSE, the company’s shares of Rs 10 closed at Rs 86.60 against the previous close of Rs 87.45.