India Cements also said there was an increase of Rs 200 per tonne of cement in the variable cost and the cost impact was Rs 50 crores.
Having posted a net profit of Rs 2.96 crore during the quarter ended June 30, 2014, as against a net profit of Rs 16.82 crore during the same period of previous year, India Cements says severe cost push and the substantial cost imposed through increase in freight charges and increase in prices of petroleum products have impacted the net loss in the first quarter.
N Srinivasan, vice chairman and managing director, India Cements, told CNBC-TV18's Poornima Murali, "Despite a nominal recovery in selling prices from the month of June 2014, the severe cost push have resulted in a marginal loss for the quarter. The costs have gone up, which had an impact in the results, though the company has seen a sequential improvement compared to the previous quarter ended March 31, 2014."
The company also said there was an increase of Rs 200 per tonne of cement in the variable cost and the cost impact was Rs 50 crores. "Compared to the first quarter of last year, there is an increase of almost Rs 200 in variable costy. We sold 26 lakh tonnes and the total cost impact was Rs 50 crores", added Srinivasan
It may be noted that the net plant realisation improved marginally to Rs 3,293 per ton in the quarter ended June as against Rs 3,185 per tom during the same period last year.
But India Cements is confident the demand will pick up in the next 6-9 months as the new government has focused on better infrastructure and concrete cement road projects. Srinivasan said, "The company will see the profits back and expect the scenario to be better in next six-nine months.
With more infrastructure projects are expected to be cleared in the near future and the development of a new State capital in Andhra Pradesh, the industry would see a growth in future." The company registered a 2 percent growth in the South and a 9 percent growth in North.
Trinetra Cement , part of India Cements, posted a net profit of Rs 10.37 crore for the quarter ended June 2014 as against a net loss of Rs 5.20 crore in the corresponding period last year. The company said if the two balance sheets merge, then it will be in black.
While developers in the South protested against a steep hike in cement prices, N Srinivasan refuted their allegations. "Cement price increase is a small percentage in the total price the builders put per square feet. It is their strategy to divert attention from the real increase they are making in the prices," he added.
India Cements stock price
On August 07, 2014, India Cements closed at Rs 107.55, up Rs 2.55, or 2.43 percent. The 52-week high of the share was Rs 130.60 and the 52-week low was Rs 43.00.
The latest book value of the company is Rs 131.97 per share. At current value, the price-to-book value of the company was 0.81.
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