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India Cements hopes to sustain momentum on infra spend, monsoon

The company plans to spend Rs 350 crore over a three-year period in capital expenditure and investments to adhere to certain emission norms.

, ET Bureau|
Updated: May 26, 2016, 05.47 PM IST
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The company's variable costs have dropped 10% year-on-year and has executed a 5-6% savings on logistics. The company plans to spend Rs 350 crore over a three-year period in capital expenditure and investments to adhere to certain emission norms.
The company's variable costs have dropped 10% year-on-year and has executed a 5-6% savings on logistics. The company plans to spend Rs 350 crore over a three-year period in capital expenditure and investments to adhere to certain emission norms.
CHENNAI: Chennai-based cement manufacturer India Cements hopes positive performance indicators observed in the final quarter of the fiscal gone by, can be replicated in the quarters to come on an above-normal monsoon and the Centre delivering on its budget promises to boost infrastructural expenditure.

For the Q4 of FY15-16, India Cements posted a profit before tax of Rs 75 crore against Rs 37 crore in the same quarter last year. For the whole fiscal, the company posted a net profit of Rs 137 crore against a profit of Rs 29.5 crore. The cement maker sold 24.03 lakh tonnes against close to 20 lakh tonnes last year due to expedited infrastructure projects undertaken in the south, predominantly Andhra Pradesh. The company's chief executives, addressing the press today, said stricter controls on variable costs-power and fuel- and lower freight charges enabled a better operating performance.

The company's variable costs have dropped 10% year-on-year and has executed a 5-6% savings on logistics. The company plans to spend Rs 350 crore over a three-year period in capital expenditure and investments to adhere to certain emission norms.

"Indian Cements has turned the corner. We will be in the black," said N Srinivasan, Managing Director of India Cements. "I am making profits even at a capacity utilisation of around 60% because the prices of cement have been stable," added Srinivasan. The company has also cut its debt from Rs 3200 crore down to Rs 2,935 crore.

The company is making an Earnings Before Interest, Taxes, Depreciation and Amortisation of Rs 920 a tonne, which Srinivasan said paved the way for "decent profits." He said there is headroom for upside if the company keeps a tab on its variable costs and demand picks up. The stock markets reacted to the good performance with a 4.27% jump on the BSE to Rs 92.75. On the NSE, the scrip moved up 4.55% to Rs 93.

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