India Cements has reported a turnover of Rs. 994.92 crore for the quarter ended September 30, 2009, up from Rs. 929.64 crore in the same period last year. For the half-year ended September 2009, the turnover is Rs. 1,955.17 crore, up from Rs. 1,805.97 crore.
The “good results in disappointing times” come in the wake of a sluggish demand growth of 4.1 per cent in the South in the first-half of this year, accompanied by practically a nil growth in Andhra Pradesh and Karnataka. The Andhra Pradesh factor had put pressure on prices, which remained firm until the first quarter, according to N. Srinivasan, Vice-Chairman and Managing Director of the company.
Addressing a press conference here on Wednesday, Mr. Srinivasan said the impact of the price drop in Andhra Pradesh on the company was not much as only 20 per cent of sales came from that State. Prices in Andhra Pradesh were bottoming out, he said.
The southern scene should be viewed against the 12.20 per cent cement demand reported nationally in the first-half. Mr. Srinivasan maintained that 2010-11 “may not be bad” as had been suggested in certain sections.
The company reported a marginal rise in the operating profit to Rs. 303.20 crore for the second quarter, up from Rs. 299.15 crore in the same period last year.
The net profit stood at Rs. 136.94 crore (Rs. 134.27 crore).
The operating profit for the half-year ended September 2009 was, however, down marginally to Rs. 596.31 crore from Rs. 610.42 crore in the same period last year and the net profit was Rs. 281.22 crore (Rs. 276.41 crore).
The company, he said, had raised Rs. 140 crore through a one-year commercial paper issue at coupon rate of 7.15 per cent to pare its interest cost which stood at Rs. 75.88 crore for the half-year ended September, up from Rs. 47.84 crore in the same period last year. According to company officials, the total debt of the company stood at Rs. 2,400 crore with the average cost working out to 11 per cent.
Answering a volley of questions, Mr. Srinivasan said the cement industry had always grown positively in the last 30 years.
“With the bunching of capacity additions, you may have some pauses vis-À-vis prices,” Mr. Srinivasan said. With most capacity additions having fructified already, he sounded positive on the price front.
To a question, he said the company’s entry into the Indonesian coal sector would be firmed up in a few days with the signing of a pact with the local player to jointly acquire a coal mine with an estimated deposit of 30 million tonnes. India Cements would be investing around $20 million into the venture. Mr. Srinivasan said the company would move its office into its own property, acquired recently from ICICI Bank in Chennai.