The India Cements Ltd. has reported a lower net profit of 34.80 crore for the quarter ended December 2009, down from Rs.61.91 crore in the same period last year. The company, however, has reported a higher operating income of Rs.875.97 crore (Rs.7668.76 crore) for the quarter ending December 2009. Total expenditure, too, has gone up to Rs.747.60 crore (Rs.574.70 crore) during the quarter under review.
Addressing a press conference here on Monday, Vice-Chairman and Managing Director, N. Srinivasan, attributed the dip in net profit primarily to the drop in cement prices across the South. The average price realisation for the plant had dropped drastically from Rs.3,281 a tonne in April last to around Rs.2,200 in December 2009. The price realisation for the quarter ended December was Rs. 2,400 a tonne, down from Rs.3,087 a tonne in the same quarter laser year."Considering this huge price fall, we have done well because of the increased sales volume,’’ he said. Mr. Srinivasan, nevertheless, felt that prices
"have bottomed out’’. He was of the view that the next 12 months would see ``lower prices than before’’. Prices would, however, be better than "what is today,’’ he said. In Tamil Nadu, cement prices had dropped from Rs.275 per bag (50 kg) to around Rs. 200. In Andhra Pradesh, prices had dropped to Rs. 140 a bag from Rs. 230 a bag.
Mr. Srinivasan said the scene had improved in December with the South registering a demand growth of 10 per cent. Andhra saw a 10 per cent pick in up in demand in December. The demand grew by 12 per cent in Karnataka during December 2009. Till December, Andhra was showing a marginal negative growth in demand. Though the domestic cement consumption grew by 13 per cent in the first nine months of the current financial year, the demand in the South grew only by five per cent. While the cement demand in Tamil Nadu grew by 12 per cent, it grew by 4.34 per cent Kerala and by 3.5 per cent in Karnataka. Andhra showed a marginal negative growth in the first nine months of the current financial year. To a question, Mr. Srinivasan admitted that a combination of factors ranging from excess capacity to panic selling and hard bargain by stockists had caused the precipitous fall in prices in the region.