 "Q2 earnings, Q2 results")
India's Ramco Cements on Thursday soared past second-quarter profit estimates as strong housing sales and resilient infrastructure spending outpaced higher expenses.
Net profit after tax grew nearly nine times to Rs 101 crore ($12.1 million) for the quarter ended Sept. 30, and was well above analysts' expectations of 794 million rupees, as per LSEG data.
Strong real estate sales, buoyant government spending ahead of elections this year and next, and the weakest monsoon since 2018 have helped Indian cement players post higher earnings in the current quarter.
Ramco's results were in line with rivals ACC and Shree Cement, which beat profit expectations, and market leader in terms of market capitalisation UltraTech Cement, which topped revenue expectations.
Its revenue from operations jumped about 31% to 23.29 billion rupees. This outpaced expenses, which rose 24% to 22.05 billion rupees on the back of higher input and transportation costs.
Sales volumes grew 38%, supported by pressurized prices in southern India, from where Ramco derived 81% of its total volumes in the reported quarter.
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"A 82% capacity utilisation in a monsoon quarter may bring in higher base next year. A key question now is their capacity acceleration plans, which if not adequate may fail to sustain such growth," said Satyadeep Jain, research analyst at Ambit Capital.
The company also forecast higher operating margins in the coming quarters, citing cement price improvement from October 2023 and fuel prices.
Ramco's core profit margins expanded to 18% from 11% a year ago.
Shares of Ramco Cements rose 3% after the results.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
