India Cements Ltd said on Friday its net profit rose over fourfold to INR102.03 crore for the quarter ended June 2011. In the year ago period, the company had a profit of INR24.98 crore.
The first quarter profit was higher than the Rs 68.1 crore the company earned in the the whole of 2010-11.
Revenues for the quarter rose 16.78% to INR1061.72 crore, compared with INR909.16 crore in the same quarter last fiscal. The growth was primarily due to smart recovery in selling prices. Gross realisation for the quarter was Rs 4,150 per tonne while it was Rs 3,216 per tonne in the corresponding quarter last fiscal.
"Higher profits are due to better cost and price management," N Srinivasan , vice chairman and managing director, India Cements, said.
Cement demand for south contracted 7.7%, and demand across India contracted 0.68 %. "In the history of Indian cement industry, we have not seen such poor demand," he said . Consequently , cement manufacturers are trimming production . In the south, capacity utilization levels were 62 % while all India average utilization was 72%. India Cements produced 67 % of its rated capacity.
"We have decided not to drop price. Instead we will produce only what the demand is. It is futile to make cement and store them. Under current circumstances, I would be surprised if demand picks up in the next couple of quarters," he said.