The India Cements has reported a profit after tax of Rs.68.10 crore for 2010-11, down from Rs.354.34 crore in the previous year. The gross turnover is placed at Rs.4,011.34 crore, down from Rs.4,221.69 core.
The lower profit must be read in the backdrop of a slackening demand with cement consumption growing by only 4.70 per cent all-India.
The demand growth was negative in the South, which reported a minus 3.40 per cent growth in consumption during the just ended year. Within South, Andhra Pradesh saw a steep 17.10 per cent drop in demand. The substantial capacity increase in the South has not helped the cause of the cement industry any better. Throughout 2010-11, there was pressure on prices and the industry had to operate at lower capacity to keep its head above the water. To add to its woes, input costs have also gone up substantially.
Addressing a press conference here on Monday, N. Srinivasan, Vice-Chairman and Managing Director, said the company did well under trying circumstances to post profit. The net price realisation was Rs.2,661 during 2010-11, down from Rs.2,754 a tonne in the previous year. Mr. Srinivasan said price had improved in the final quarter of last year to Rs.3,095 from Rs.2,230 a tonne in the second quarter. On the trend in the new financial year, he said the volume of demand during the first two months was lower than the one in the last quarter.
“The price is more, however,” he said. “People are not dumping cement in the market,” he added. He expected the price to hold over the next year or so.
The company, in the meanwhile, has declared a dividend of Rs.1.50 for 2010-11. It had also redeemed its outstanding foreign currency convertible bonds worth $75 million together with its maturity premium.
