India Cements net profit falls on low prices

The company attributed the fall in net profit to low prices in the market.

Published: 10th November 2018 06:47 AM  |   Last Updated: 10th November 2018 06:47 AM   |  A+A-

By Express News Service

CHENNAI: India Cements on Friday reported a 94 per cent fall in net profit for the quarter ended September 30 at Rs1.43 crore, against Rs 23.67 crore in the same quarter the previous year. The company attributed the fall in net profit to low prices in the market. But, with its capacity utilisation increasing, the firm is also looking to expand its production capacity, with a planned Rs1,000 crore plant set to come up in Madhya Pradesh.

Elaborating on the performance, N Srinivasan, vice-chairman and managing director, said, “While the capacity utilization is going up, the price of the cement is less when compared to the increase in fuel prices. This increases the transportation costs”.

He went on to point out that the company had increased total cement sales to 30.77 lakh tonnes from 27.01 lakh tonnes in the same quarter last year. “We are now operating at 80 per cent capacity.”.The company saw net plant realisation fall during the quarter by about 3.6 per cent due to the increased expenses. As for demand, the south Indian region has seen a 22 per cent rise in demand due to infrastructure projects coming up in Andhra Pradesh and Telangana, and post-flood construction in Kerala, said Srinivasan.

Capacity expansion
The company is also embarking on capacity expansion, with plans to set up a new facility in Madhya Pradesh at a cost of around Rs 900-1,000 crore. This comes in the wake of the company’s acquisition of Springway Mining Pvt Ltd last month. 

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