The recent drop in cement prices across the southern states has hit India Cements, a Chennai-based cement manufacturer.
As a result, net plant realisation of the company has dropped.
Net plant realisation was down to Rs 2,400 per tonne during the third quarter of current fiscal when compared with Rs 3,087 per tonne in the same quarter last fiscal.
During December, it dropped to Rs 2,200 per tonne from Rs 2,300 in November.
“We were losing around Rs 110 crore every month because of the drop in realisation,” said N Srinivasan, vice chairman and managing director, India Cements.
Cement price have dropped to Rs 140 per bag from Rs 208 in Hyderabad and to Rs 200 from Rs 275 in Tamil Nadu in 10 days.
“This was mainly due to panic selling by the companies since they have expanded,” he said
The company, which is mainly focussing southern India market stated that while the pan-India growth was 13 per cent, in south Tamil Nadu grew by around 12 per cent, while Kerala rose by around four per cent, Karnataka 3.5 per cent. In Andhra Pradesh the growth was negative.
“The Andhra Pradesh market dropped due to the Indiramma scheme, which did not take off between April and December,” he said, adding this scheme alone was use to consume 24 per cent. The scheme is likely to take shape from February or March and would increase the consumption by 11-12 per cent.
India Cements reported a 43.79 per cent drop in its net profit for the quarter ended December 2009 at Rs 34.8 crore, as compared with Rs 61.91 crore in the corresponding previous quarter.
“Profit for the quarter dropped on account of decline in realisation and relatively less demand in the southern market,” he told reporters here.
