Dalmia Cement (Bharat) Ltd posted a 13 per cent rise in quarterly profits helped by better price realisations from cement and higher sugar sales, but said rising coal and freight costs would squeeze margins.
The firm sells almost all of its cement in southern India, and this brings it more than three-fourths of its annual revenue. Sugar makes up slightly less than a fifth of sales.
Net profit for Jan-March quarter rose to INR700m from INR618.1m in the year ago period. Net sales rose 39 per cent to INR4.15bn from INR2.98bn in the year ago period, Dalmia said in a statement issued late Thursday.
In its cement business, core earnings, which exclude interest, taxes, depreciation and amortisation, rose 22 per cent to INR1,344/t. Cement sales for the quarter were marginally up by 1.3 per cent to 834,000t.
The demand for cement stayed robust and prices are steady in Tamil Nadu, which accounted for 60 per cent of its sales for the year ended March 2008, Dalmia said.
The firm also sees its cement production rising in the year ending March 2008 as its greenfield plant in Andhra Pradesh gets commissioned in second half of the year ending December 2008. Its greenfield facility in Tamil Nadu is likely to be commissioned by March 2009.
The plants have a capacity of 2.25Mta.