India Cements Ltd reported a 40 per cent drop in its July-September net profit, lagging analyst estimates on higher depreciation, a notional loss on foreign exchange and more taxes, a top official said.
Its profit fell to INR1.34bn from INR2.23bn a year ago despite an increase in sales to INR10.88bn from INR8.90bn a year earlier. A Reuters poll of brokerages forecast a net profit of 1.61 billion rupees for the quarter.
Depreciation accounted for INR497.6m from INR303.2m a year ago, managing director N Srinivasan told Reuters over the telephone.
It also recorded a notional foreign exchange loss of INR295.5m on its foreign currency convertible bonds (FCCB) maturing in 2011, compared with a gain of INR47.4m in the same quarter of the previous year, he added.
India Cement expects margins to improve during the last quarter of this fiscal on lower input costs as coal prices were cooling off while demand in south India continued to be strong.
"The demand for cement is quite strong in the market in which we are operating and it should go up in November and December after the monsoon gets over," he said.