The Hindu Business Line : India Cements net up 20-fold on strong demand

Buoyed by strong demand and good prices, India Cements Ltd has posted a 27 per cent increase in turnover for the quarter ended September 30 over the corresponding period last year while net profit jumped 20 times.

The company expects continued growth in demand and firm prices for the next 24 to 30 months, despite additional capacity coming up in the southern region. India Cements itself will add another 2 million tonnes a year of capacity by December 2007, at its existing plants. It is also setting up grinding units - where clinker produced by it will be converted to cement either by mixing with fly ash or slag - in north Chennai and in Maharashtra.

Good profit

Mr N. Srinivasan, Vice-Chairman and Managing Director of India Cements, told a press conference on Monday that the company's profit after tax of Rs 117.32 crore during the quarter under review was higher than the highest annual profit of Rs 87 crore recorded in 1998-99.

The company's plants are operating at full capacity and with the expansion planned, and cost-cutting measures and continued firm prices, the prospects could only be bright, he said. The additional 2 million tonnes a year of capacity would come up at a capital cost of Rs 300 crore.

India Cements' accumulated loss was Rs 30 crore at the end of September 2006, which would be wiped out in October itself. Earlier, the company had said it would wipe out the balance losses in the third quarter of the year.

Demand increases

Mr Srinivasan said the company's performance was aided by the 10.5 per cent growth in demand in the southern region, while on an all-India level the demand grew 9.2 per cent. In the first half of this year, the company sold 37.35 lakh tonnes of cement against 36.17 lakh tonnes in the same period last year.

In the April-September 2006, India Cements recorded a net profit of Rs 229.91 crore on sales of Rs 1,152.49 crore compared to a net profit of Rs 11.06 crore on sales of Rs 918.61 crore for the same period last year. The shares closed at Rs 220.40 on the NSE on Monday against the previous close of Rs 221.05.

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