)
Following the decision to relinquish the ownership of Chennai Super Kings Cricket Ltd, the stocks of India Cements went up by 12.32 per cent on Thursday.
Chennai Super Kings Cricket Ltd has become a new wholly owned subsidiary of India Cements. N Srinivasan, vice-chairman and managing director, India Cements, said the ownership will go to the shareholders of the company.
On Thursday morning, the company’s stock was trading at Rs 106.50, up by 12.32 per cent in the BSE.
The company on Wednesday said India Cements shareholders would get ownership of Chennai Super Kings.
Srinivasan said many of the investors want to focus only on India Cements and few would be interested in both, so we are giving an option on whether they want to be in both or only in one.
“This is the first step towards becoming a fully cement-focussed company,” said Srinivasan, adding ownership of the Indian Premier League franchise will go to the shareholders of the company.
He refused to comment on court orders of matters related to The Board Of Control For Cricket in India, of which Srinivasan was the president.
Last September, India Cements decided to demerge Chennai Super Kings (CSK) by transferring the assets at net cost.
The company has earned around Rs 166 crore from CSK. India Cements had successfully bid for the Chennai franchise in 2008 for $91 million. The amount will be paid over a 10—year period.
India Cements Ltd posted a net loss of Rs 11.68 crore for the quarter ended December 31, 2014, as compared to Rs 0.42 crore net profit during the same period of previous financial year.
The total income stood at Rs 1,040.6 crore for the quarter, as compared to Rs 1,038.47 crore for the corresponding quarter of previous financial year.
The loss is due to the lower capacity utilisation, said Srinivasan.
Shrenik Gujrathi, senior research analyst, cements, Angel Broking, said: “In the third quarter of this financial year, India Cement reported a mixed set of numbers. The revenue declined marginally by 0.1 per cent on a y-o-y basis (8.5 per cent, sequentially) to Rs 1,035.9 crore. It was lower than our estimate of Rs 1,085.9 crore.”
“The sales volume during the quarter decline by 8 per cent on a y-o-y basis to 2.11 million tonnes. It was lower than our estimate of 2.34 million tonnes. The volume declined due to flat demand in its key market in south India. However, realisation per tonne at Rs 4,917 per tonne was higher than our estimate of Rs 4,564.
“Raw material expenses were in-line with our estimate at Rs 160 crore (15.5 per cent of revenues). However, lower than expected power, freight and other manufacturing costs improved the Ebitda margin above our estimate at 15.3 per cent (against our estimate of 14.5 per cent). Ebitda per tonne came in at Rs 753 per tonne as against our estimate of Rs 671 per tonne.
“The bottomline reported a loss of Rs 11.6 crore as against profit of Rs 0.42 crore during same quarter last year. It was due to higher interest expenses.”
With the supply overhang in the south, the market dynamics has forced the industry to operate at lower capacity utilisation in the region. While the quarter witnessed the fuller impact of the cost push of earlier quarters of increase in EB tariffs and royalty, marginal relief was available through reduction in price of diesel and through further recovery in selling pricess, which together helped in mitigating the loss for the quarter, said the company.
Capacity utilisation wsa 56 per cent compared to 63 per cent a year ago. the net plant realisation increased on Rs 3,707, as compared to Rs 3,459 a year ago. Volume saw a dip to 20.05 million tonnes compared to 22.37 million tonnes a year ago, said the company.
Recovery in the selling price by way of increased net plant realisation offset the cost increase and drop in volume and resulted in an Ebidta of Rs 163 crore as against Rs 146 crore.
Interest charges were higher due to higher utilisation of working capital and one time charges and was at Rs 104 crore against Rs 80 crore while the depreciation was marginally lower at Rs 66 crore against Rs 69 crore resulting in a loss before exceptional item of Rs 7 crore, against a loss of Rs 2 crore, a year ago, said the company.
