NCL Industries eyes Rs 100 crore turnover this fiscal

Company bets on bright outlook for cement industry

City-based NCL Industries Limited is targeting a turnover of Rs 100 crore during the current financial year, an increase of 40 per cent over the Rs 71.49 crore achieved in the last financial year.

It also expects the bottomline to improve considerably and cross the Rs 5 crore mark during 2004-05 from Rs 1.28 crore in the last fiscal.

The company has expanded its cement production capacity from 2.42 lakh tonnes a year to Rs 2.97 lakh tonnes during the last financial year and also modernised its plant at Simhapuri, Nalgonda district, at a cost of Rs 10 crore.

In the light of a bright outlook for the cement industry, the company is expected to achieve full capacity utilisation during this financial year, K Ravi, managing director of NCL Industries, told Business Standard.

NCL Industries has three divisions "� cement, cement-bonded particle panel boards and pre-fabricated shelters. The cement and the cement board units are located at Simhapuri and the prefabrication units are situated at Jeedimetla near Hyderabad and Naharpur near Faridabad, "This year, the cement division will contribute around Rs 65 crore, while the boards and the prefab divisions are expected to earn Rs 25 crore and Rs 12 crore respectively," Ravi said.

During the last financial year, the cement segment revenue was up three per cent to Rs 48.64 crore. The 'Bison' panel boards division with a capacity of 22,000 tonnes saw its turnover rise by 9.6 per cent to Rs 18 crore, while the prefab division's turnover declined by 45 per cent to Rs 4.69 crore. Ravi attributed the fall in the prefab division's revenue to rise in steel prices.

"Since the contracts awarded by the central government had no price escalation clause, we had to go slow in prefab business. This year, with the government agreeing to take into account the rise in input prices, we see a good growth in the prefab division's revenue too this year," he said.

The company has also been supplying special grade cements to the Indian Railways for the last 15 years. "NCL is the only cement company in the state to manufacture superior quality cements. Last year, the special cement sales touched Rs 10 crore and would perform better this year," he said.

Ravi said that the cement sales under Nagarjuna brand were mainly in the coastal Andhra. The current distributor network of around 1,000 was being expanded to Guntur and Krishna districts for a higher marketshare, he said.

"We have a unique relationship with the distributors, having set up a trust to take care of their well-being. Also with a very strong brand image, the Nagarjuna cement commands a premium of around Rs 10 over the competitor brands. Hence, the reason for our optimism on a sound growth," he said.

According to the NCL Industries' MD, the Rs 10 crore expansion-cum-modernisation project, aided by Indian Renewable Energy Development Agency Limited (Ireda) to the extent of Rs 4 crore, resulted in higher efficiency levels in power and coal usage during the last fiscal.

The power usage at 121.21 units per tonne improved to 98.91 units per tonne, while coal utilisation was brought down to 846 kilo calories per tonne from 975 kilo calories per tonne. The improvement in efficiency has already resulted in a savings of around Rs 4.3 crore, he said.

"The fact that we have already achieved Rs 2.37 crore net profit in the first quarter as against a target of around Rs 5 crore for the full year points to the bright road ahead," he said.

In the first quarter ended June 30, 2004, the net profit zoomed to Rs 2.37 crore as compared Rs 26.7 lakh in the corresponding quarter of 2002-03. The total income rose by 43 per cent to Rs 23.3 crore from Rs 16.37 crore.