India Cements Q1 Results: Net profit at ₹58 crore, revenue declines 28% YoY on soft demand

India Cements Ltd on Friday reported a consolidated net profit of ₹58.47 crore in June 2024 quarter even though its sales volume declined 26 per cent as capacity utilisation was severely hit due to continuous liquidity crunch.

The Chennai-based company sold its grinding unit at Parli, Maharashtra in April and included the gain of ₹240.68 crore from the sold unit as an exceptional item in the quarterly profit.

Before the exceptional items and tax, India Cements Ltd (ICL) had a loss of ₹147.97 crore in the quarter under review.

The company, in which the promoters are selling their stake to rival Aditya Birla group firm UltraTech Cement, had reported a net loss of 87.40 crore during the April-June quarter a year ago.

Its revenue from operations was down 28.53 per cent to ₹1,026.76 crore during the period under review as against ₹1,436.74 crore in the corresponding quarter, according to a regulatory filing from ICL.

"The capacity utilisation of the company was severely impacted caused by the continuous liquidity crunch on account of losses sustained in the earlier quarters," said an earnings statement from the company.

The N Srinivasan-led company could not take advantage of the reduced fuel cost as operating margins further shrunk on account of low volume.

"The higher cost of production as compared to peers due to varying vintage of the plants together with free fall in cement prices affected the dispatch and the margins," it said.

Cement and clinker volume for the quarter was 19.61 lakh tonnes as compared to 26.66 lakh tonnes in the same quarter of the previous year with a drop of more than 26 per cent, it added.

"The EBIDTA was accordingly negative at ₹22 crore against a positive ₹12 crore in last year. The interest and other charges were higher at ₹82 crore against ₹58 crore while depreciation was up at ₹55 crore against ₹53 crores and the resultant loss before extra-ordinary item was at ₹160 crore against a loss of ₹99 crore," it said.

Total expenses of ICL in the June quarter were down 22.76 per cent to ₹1,190.24 crore.

ICL's total income in the June quarter was down 27.81 per cent to ₹1,042.27 crore.

Over the outlook, ICL said, "With the normal rainfall propelling, rural demand is likely to improve further and the Budget has announced huge investments in the next 5 years on infrastructure and housing projects."

"With special financial support to Andhra Pradesh, there is renewed optimism for improvement in economic activity in the zone and the medium-term prospects augur well for the industry," said the South-based cement maker.

Shares of India Cements on Friday settled 0.34 per cent lower at ₹366.90 apiece on the BSE.