The India Cements on November 5 said it earned a net profit of Rs 49.08 crore for the quarter ended September 2012, down 30 per cent from Rs 69.71 crore it earned in the corresponding period last year, disappointing markets.
India Cements is South India’s largest cement maker by volume.
N Srinivasan, vice-chairman and MD of India Cements said that the company’s profits were lower as it suffered from increased input costs due to power and fuel. The company’s power and fuel costs were up 21 per cent during the quarter at Rs 328.48 crore.
The profits disappointed markets. Numbers were below our estimate with sales being largely inline. However, lower realisation and increase in power cost dragged EBITDA margin to 18.3 per cent versus the estimate of 22 per cent. Going forward we expect power costs to reduce with shipments from Indonesian coal mines likely by the January-March quarter, Rikesh Parikh of Motilal Oswal, a domestic brokerage said.
With the 12-day power holiday every month, only 20 hours of supply a day in Andhra Pradesh and the precarious power situation in Tamil Nadu, the company was forced to buy 3.8 crore units of power at an average cost of Rs 8.80 a unit. The company purchased only 42 lakh units in the corresponding quarter last year.