India’s Ramco Cements posts near-23% rise in Q4 profit

Ramco Cements Ltd reported a near-23% rise in fourth-quarter profit on Thursday on a boost in Indian infrastructure spending.

The Chennai, Tamil Nadu-based cement maker's profit after taxes rose to 1.52 billion rupees ($18.6 million) in the three months ended March 31, from 1.24 billion rupees a year earlier, according to an exchange filing.

Analysts, on average, expected a drop in profit to 941.9 million rupees, according to Refinitiv IBES data.

Domestic demand for cement was strong on the back of an uptick in infrastructure project undertakings, offsetting weaker prices in south India, according to analysts.

The company's sale of products rose almost 51% to 25.59 billion rupees, with the volume of cement and dry mortar products sold rising nearly 46% to 4.7 million tonnes.

However, total expenses rose nearly 53% on higher costs for fuel power and fuel, raw materials, and freight and handling, among other items. The company said elevated petcoke and coal prices dented margins.

"Transportation cost by rail has increased by 15% due to re-imposition of busy season surcharge and increase in diesel price by 3% during FY23 pushed up the inbound and outbound logistics cost," it said in a statement, adding that it expects improvement in margins from Q2 in FY24 onwards.

Its peers Adani-owned Ambuja Cements Ltd and Dalmia Bharat Ltd also reported a rise in fourth-quarter profits.

Shares of Ramco Cements pared some losses after the results were declared to settle almost 1% down, trimming YTD gains to 11.6% at close.