India: HeidelbergCement 4Q FY16 margins up 16.5%

Operating margins of HeidelbergCement India jumped 18 per cent in the fourth quarter of FY16 compared to 16.5 per cent in the same period last year. Speaking to CNBC TV, said Jamshed Naval Cooper, CEO and MD of HeidelbergCement India said, "Lower pricing on the revenue front and improved operating efficiencies helped the company post good results in the 4Q of FY16."

"For the fourth quarter the volume has been up by about two per cent. The costs have been lower by about 3.9 per cent. On the revenue side it has been low because of the lower prices. However, in terms of our operating efficiencies we have improved and that is how we get a better result this year," said Jamshed Naval Cooper.

The company paid a debt of INR2750m (US$40.819m) in 4Q15 and aims to repay INR2150m  (US$31.9m) more by September 2016, post which it will be left with INR6000m, he added. The month of May has seen good demands, and Cooper hopes June to be better in terms of volume growth.

The EBITDA margins for 4QFY16 were 18.5 per cent and with improved efficiencies the company should sustain them in the long run, he said. He expects the cement industry to grow at around 6-7 per cent in FY17.

"We have been using petcoke, we have been improving efficiencies. So, on a consumption parameters we are better. That is how the EBITDA margins have been improving and I think we can sustain it in the long run," added Jamshed Naval Cooper.