India Cements narrows 2Q loss

The India Cements Ltd reported a lower net loss of INR810m (US$9.7m) in the 2QFY23-24 compared with a net loss of INR1380m in the year-ago period.

EBITDTA for the 2QFY23-24 reached INR140m vs -INR870m in the 2QFY22-23, with the company seeing a net profit for the coming quarters, as price realisations improve and cost pressures soften. Total income slipped 2.5 per cent to INR12.28bn in the 2QFY23-24 from INR12.59bn in the year-ago period. Cement volumes increased 5.1 per cent to 2.37Mt in 2QFY23-24 from 2.254Mt in 2QFY22-23.

Its second-quarter performance has been impacted by a supply overhang in the southern region with a huge surplus capacity in the south leading to pricing pressures and lower capacity utilisation. In addition, a spike in coal prices increased the cost of production and tightened margins.

The recent drop in coal prices is expected to result in improved operating margins. The company’s production cost per tonne has fallen from INR3900/t to INR3000/t.

“This is a better quarter, as prices went up and costs came down. With coal prices coming down, it will augur well for the company. We hope the cement prices will remain firm if not increase further. With further reduction in variable cost, improving liquidity, and capacity utilisation, we hope to return to black soon,” said Mr N Srinivasan, vice-chairman and MD of India Cements.