The Ramco Cements declined 4.08% to Rs 815.60 after consolidated net profit fell 3.03% to Rs 94.60 crore on a 5.99% increase in revenue to Rs 1,290 crore in Q3 December 2019 over Q3 December 2018.
Consolidated profit before tax (PBT) slipped 14.65% to Rs 110.89 crore in Q3 December 2019 as against Rs 129.93 crore in Q3 December 2018. Tax expense during the quarter dropped 48.36% to Rs 15.49 crore as compared to Rs 30 crore in corresponding quarter, previous year. The Q3 result was declared during trading hours today, 29 January 2020.
The cement sale volume rose 3.53% to 28.44 lakh tonne units in Q3 December 2019 as against 27.47 lakh tonne in Q3 December 2018. Consolidated EBITDA fell 3.10% to Rs 212.55 crore in Q3 December 2019 as compared to Rs 219.35 crore in Q3 December 2018.
During the current quarter, the firm witnessed sluggish demand in its core markets coupled with pressure on prices due to active monsoon. Demand in eastern markets was more visible during the current quarter, but the prices particularly in West Bengal were very poor and the trend in January 2020 is positive with improvement in prices.
However, the operating cost continue to remain under control in view of favourable prices of fuels viz., pet coke, diesel during the current quarter. The company has been constantly focussing on various cost reduction initiatives and improving productivity while maintaining highest quality standards. The company is taking continuous efforts to optimise the supply chain efficiency.
The company's total borrowings as on 31 December 2019 is at Rs 2,679 crore (including current maturities of Rs 341 crore), out of that Rs 1,382 crore is from banks, Rs 195 crore of debentures and Rs 305 crore of soft/interest free loans are long-term in nature. The average cost of interest bearing borrowing is at 7.54% p.a.
As against the proposed capex of Rs 3,530 crore for the above capacity expansion programme, the company has so far incurred Rs.1,837 crores for the period up to 31 December 2019. The company propose to meet the above capex partly through internal accruals and partly through borrowings.
On 31 August 2016, the Competition Commission of India (CCI) had imposed a penalty of Rs 258.63 crore on the company towards alleged cartelisation. Against the order, the company appealed to the Supreme Court, which by its order, admitted the appeal and directed to continue the interim order passed by NCLAT. Accordingly, the company re-deposited Rs 25.86 crore being 10% of the penalty. However, the firm backed by legal opinion, believes that it has a good case and hence no provision is made.
Ramco Cements' main products include Portland cement, manufactured in eight production facilities that include integrated cement plants and grinding units with a current total production capacity of 16.5 million million tonnes per annum (MTPA) with 10 manufacturing facilities across India. The company has been the forerunner in promoting blended cements from 1997. The company caters mainly to the domestic markets. The company is also engaged in sale of surplus electricity generated from its windmills and thermal power plants after meeting its captive requirements.
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