A sharp fall in cement prices in south India hit India Cements, with its Jan-March net profit falling 59% YoY to INR383.2m.
Revenue for the quarter rose 8.7% YoY to INR9.64bn led by robust volume growth of 26.6%. However, this did not translate to an improved botomline due to lower cement prices.
Net realization for the March quarter slipped 19.4 per cent to INR3120/t as prices in the company’s key market – Andhra Pradesh, Karnataka and Tamil Nadu – declined 20% from a year ago.
A fall in net realization and higher costs resulted in Jan-Mar operating margins falling to 13.1% from 25.4% a year ago.
Raw material costs rose 32.4% from a year ago toINR1.38bn due to higher royalty and fly ash prices during the quarter, according to analysts.
Power and fuel costs rose 11.6% to INR2.61bn due to the company’s higher dependence on imported coal and a rise in domestic coal rates, they said.