Impacted by lower sales volume due to the lockdown, The India Cements Ltd. (ICL) has switched over to a cash-and-carry system to help improve liquidity.
“To combat liquidity issues, we have instituted the ‘cash and carry’ system,” said N. Srinivasan, vice chairman and MD, ICL. This, he added, helped improve liquidity as buyers pay immediately for their purchases, instead of opting for credit.
“Due to the impact of the Covid necessitated lockdown and lower volume, ICL lost ₹150 crore in sales in 2019-20,” he said, adding the firm made up for this by pruning costs; the final net loss in sales was contained to ₹57-60 crore in FY20.
“If Covid had not happened, the demand would have been better. We are doing well in places where the lockdown has been lifted. Rural demand is decent. There is already a smart rise in cement prices,” he said.
ICL reported a standalone net loss of ₹111.07 crore for the fourth quarter ended March 2020, including provision of ₹100.04 crore towards an airline subsidiary, the infrastructure division and on account of a vendor who had approached the NCLT.
‘Worst behind us’
Asserting that ICL had crossed the worst in the COVID-19 context, Mr. Srinivasan said the second quarter of FY21 would be better than the year-earlier period.
On Q4 of FY20, he said, “We lost 10 lakh tonnes in volume in January-March due to Covid. The last week of March saw a loss of 6-7 lakh tonnes, an impact of about ₹85 crore. If we had maintained the volume, we would have netted profit of ₹14 crore,” he said. Total income fell to ₹1,170 crore from ₹1,581 crore. For the full year, total income was ₹5,085 crore (₹5,659 crore).
The board declared a dividend of ₹0.60 a share for the year. For the full year, ICL posted a loss of ₹35.51 crore against a profit of ₹69.44 crore.
‘Takeover by Damani?’
On the reported takeover of ICL by investor R.K. Damani, he said: “[What appeared in the media] is an incorrect report. We have clarified to SEBI. There is nothing [more] to say.”
“Stability of management will be okay. Mr. Damani is a respectable person, who has chosen to invest in India Cements. I should not say more. This company has been around for more than 70 years. We will continue to make cement.”
