India Cements Ltd., the Tamil Nadu-based cement company and now a subsidiary of UltraTech Cement, reported results over the weekend and there are some aspects which show the impact of India’s largest cement company becoming a promoter here.Although India Cements’ revenue remained flat on a year-on-year basis at 1,025 crore, and the company reported a net loss during the quarter, compared to a net profit last year, the net loss was majorly due to an exceptional gain in the base quarter and an exceptional loss this time around.
India Cements had an exceptional loss of ₹123.77 crore in the June quarter, compared to an exceptional loss of ₹240.7 crore during the same quarter last year. The exceptional loss this time was due to impairment of assets related to its subsidiaries.
However, it is the internals that demand attention.
The company managed to achieve domestic sales volumes of 2.18 million tonnes, which is a growth of 11.6% from last year. Cement realisations, which is net of logistics costs, also improved by 5.7% compared to the March quarter.As a result of higher realisations and lower costs, India Cements managed to deliver a positive Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) after four quarters of losses. India Cements reported an EBITDA of ₹83 crore in the June quarter, compared to a loss of ₹25 crore last year.The company’s EBITDA per tonne has also seen a significant improvement to ₹424, compared to ₹88 that it had reported in the previous quarter. Although the debt has gone up marginally to ₹1,241 crore from ₹1,159 crore in March, the cost of funds for the company have come down. Average interest rate for the company declined by 110 basis points during the June quarter.Going forward, India Cements also plans to scale up Green Power, which is a combination of Renewable Energy and Waste Heat Recovery Systems (WHRS) to 86% by financial year 2027 from the current levels of just 5%.Shares of India Cements had ended 0.9% lower on Friday at ₹347.5, which is still lower than UltraTech’s open offer price of ₹390.
