The India Cements Ltd. reported standalone net profit for the first quarter more than doubled to ₹76 crore over the year-earlier period.
Revenue from operations rose by 41% to ₹1,446 crore and total expenditure by 57% to ₹1,526 crore. Total comprehensive income more than doubled to ₹80 crore, the company said in a filing.
“The company has opted for rates of Income tax as specified under Section 115BAA of The Income Tax Act 1961. Consequent to which, the company’s deferred tax liability obligation has been recomputed resulting in a reversal of ₹148.10 crore,” the company said in a filing.
“The spiralling increase in the cost of input materials continued during the quarter without corresponding increase in the selling price of cement resulting in a sub-optimal performance,” N. Srinivasan, vice chairman and MD told reporters.
According to him, the increase in power and fuel cost alone was more than 54%, while the overall increase in variable cost was about 40% with marginal savings in other items of raw materials and stores.
“Since power and fuel are the main causes, we could not do anything against the onslaught. It is an extraordinary situation,” he said.
Mr. Srinivasan said that coal can be imported either from Australia, Indonesia or South Africa, depending upon the prices. ICL had recently imported two shipments of coal from Russia and it had stocks lasting for two months.
Asserting that generally, in the South companies were able to pass on the increase in the cost to consumers, he said: “This time, it did not happen. Possibly the increase was so sharp.”
To offset the rising cost, ICL announced that it might go in for a price hike, without mentioning the quantum.
On the outlook, he said that he did not immediately foresee any sharp drop in fuel prices. The exact scenario will be known in the coming weeks. During the quarter, the overall clinker production was up by 28% while the cement sales rose by 38% to 25.53 lakh tonnes. Clinker sales was marginally higher at 1.19 lakh tonnes (0.94 lakh tonnes).
Mr. Srinivasan said that the company would set aside ₹60-₹70 crore as capex for completion of Sankar Nagar cement plant modernisation and waste heat recovery system.
R. Parthasarthy, chief marketing officer, said that ICL had sold more than one lakh tonnes of CSK cements in three months since its introduction in March. Both CSK and HSK branded cements were well received in the market.
