Ramco Cements PBT declines 15% to Rs 110 crore on sluggish demand

Ramco Cements posted a decline of 14.65 per cent in profit before tax for the quarter ended December 31, 2019, at Rs 110.89 crore as compared with Rs 129.93 crore registered during same period last year. The company is expected to complete various capacity expansion projects worth Rs 3,530 crore in the near future.

"During the current quarter, the company witnessed sluggish demand in its core markets, coupled with pressure on prices due to active monsoon", said the company in a statement. Demand in eastern markets was more visible during the quarter, but the prices, particularly in West Bengal, were very poor, it added. However, the company expects the trend in January 2020 to be positive with improvement in prices.

Total revenue of the company grew six per cent to Rs 1,290 crore as against Rs 1,217.07 crore for the same period last year. The cement sale volume during the quarter grew 3.5 per cent to 2.84 million tonnes as compared with 2.74 million tonnes during the corresponding quarter last year.

The operating cost continue to remain under control owing to the favourable prices of fuels such as pet coke and diesel during the quarter ended December. The company has been constantly focussing on various cost reduction initiatives and improving productivity while maintaining the highest quality standards. It is also making continuous efforts to optimise supply chain efficiency.

As against the proposed capex of Rs 3,530 crore for the capacity expansion programme, Ramco Cements has so far incurred Rs 1,837 crore for the period up to the end of December 2019. The capex is expected to be met partly through internal accruals and partly through borrowings.

Its new grinding unit in Haridaspur, Odisha with a capacity of 0.9 million tonne per annum (MTPA) and expansion of grinding unit near Vizag, Andhra Pradesh from 0.95 MTPA to two MTPA is expected to be commissioned in March 2020. Expansion of clinker capacity at the Jayanthipuram, Andhra Pradesh from three MTPA to 4.50 MTPA along with waste heat recovery system (WHRS) capacity of 27 MW, is expected to be commissioned before December 2020.

A new cement plant in Kolimigundla, Kurnool district, Andhra Pradesh with clinkering capacity of 2.25 MTPA and cement capacity of one MTPA is expected to be commissioned before March 2021. The proposed plant shall have the facility including railway siding, WHRS of 10 MW and thermal power plant of 15 MW. It has doubled grinding unit in Kolaghat, West Bengal from one MTPA and it was commissioned in September 2019.

Ramco Cements Q2 PBT up 25% to Rs 216 cr on pricing, better volumes

Ramco Cements Ltd has posted a pre-tax profit of Rs 216.21 crore during the quarter ended September 30, 2019, up 25.3 per cent over a profit-before-tax figure of Rs 172.6 crore earned during the same quarter the preceding year. Higher volumes and favourable pricing helped the company beat market expectations, market analysts said.

The company said it has been constantly introducing cost-reduction measures and improving productivity while maintaining quality. Ramco has been striving continuously to optimise supply chain efficiency, a company statement said. Its total income grew 11.3 per cent to Rs 1,332.08 crore, from Rs 1,196.67 crore during the corresponding three months last year.

Analysts said the company has delivered a strong performance ahead of estimates, mainly led by better-than-expected volume and pricing, despite a challenging environment.

"EBITDA grew by 27 per cent YoY to Rs 260 crore (-20 per cent QoQ) significantly ahead of our estimate of Rs 200 crore, while EBITDA margin stood strongly at Rs 958 as against Rs 830 and Rs 1,199 in the second quarter of FY19 and first quarter of FY20, respectively," said Reliance Securities.

The company's standalone net profit rose by 47 per cent over the previous year, led by better operational performance and lower tax (under Minimum Alternative Tax), the analyst firm said. Consolidated net profit grew 43.2 per cent to Rs 172.26 crore during the quarter under review, from Rs 120.31 crore a year ago.

"Healthy improvement in sales volume and lower-than-expected decline in realisation were key positive surprises. We maintain our positive view on the stock and will come out with a detailed note shortly," added the analyst from Reliance Securities.

The company said that during the half year ended September, it sold 5.43 million tonnes of cement, compared with 5.08 million tonnes in the previous corresponding period. Exports grew by 39 per cent during the period.

Ramco Cements has doubled the capacity in its cement grinding facility in Kolaghat, West Bengal to two million tonnes per annum (MTPA), and started commercial production on September 26. The remaining on-going capacity expansion programme is progressing as per schedule though there are delays due to the extended monsoon. The company has planned to spend Rs 1,430 crore on capacity expansion. It proposes to meet this capex through internal accruals and borrowings. Its total borrowings as on September 30, 2019 were Rs 2,441 crore (including current maturities of Rs 287 crore), of which Rs 1,145 crore came from banks, and Rs 345 crore of soft/interest-free loans are long-term in nature.

Ramco Cements' net profit rises 54% to Rs 191.97 cr in June quarter

Ramco Cements on Wednesday reported a 54 per cent growth in profit at Rs 191.97 crore for the quarter ended June 30, 2019, as against Rs 124.98 crore, a year ago. Revenue increased to Rs 1,392.06 crore from Rs 1,224.80 crore, an increase of 14 per cent.

During the quarter, cement sales for the company stood at 2.70 million tonnes, compared to 2.61 million tonnes of the correspond period last year, an increase of 3%.

The company achieved the highest ever quarterly EBITDA of Rs 367 crore during Q1FY20 compared to Rs 255.20 crore, a year ago, an increase of around 44 per cent, said A V Dharmakrishnan, CEO of the company. During the same period last year, company's EBIDTA was Rs 255.20 crore

Meanwhile, coal and pet coke prices softened during the quarter. ln the fuel mix, pet coke usage fells to 42 per cent during the quarter ended June 2019 against 62% during the same quarter last year. The company has been constantly focusing on various cost reduction initiatives and improving productivity without compromising on quality, Dharmakrishnan added.

The company's capacity expansion programme is on schedule and by the end of 2020, it expects to boost the total capacity to 20 MTPA.