India Cements posts Rs 137 cr loss in Q2

CHENNAI: Impacted by high input prices, which it was not able to pass on, cement major India Cements Ltd closed second quarter of FY23 with a net loss of Rs 137.58 crore, a top company official said.

He also said the situation was better now and price hikes could be carried out. The first quarter of FY24 would be better. For the Q2FY23, India Cements had logged an operational revenue of Rs 1,254.65 crore (Q2FY22 Rs 1,190.17 crore) and a net loss of Rs 137.58 crore (Rs 21.97 crore profit).

“The coal prices shot up from $60/ton to $300/ton last quarter. The company was not able to pass it on. We hope to increase the prices and also cut costs and improve efficiencies,” N. Srinivasan, Vice Chairman and MD told reporters. He also said some cement plants were able to access domestic coal.

Officials said India Cements has stopped power generation owing to the hike in coal prices. Further there was volume loss as some of the markets were not commercially viable due to high cost of production. According to India Cements, while all India peers were able to increase their sales volumes and the selling price to partially offset the cost increase, the industry in south had to bear the brunt of severe cost push without any improvement in selling price.

The overall volume of clinker and cement for the company was at 22.54 lakh ton for the Q2 as compared to 23.60 lakh ton the previous year corresponding period. The capacity utilisation was about 60 per cent. Srinivasan said the company’s debt position is comfortable with the sale of Springway Mining Private Ltd to JSW Cement Ltd for Rs 603 crore. The company’s total debt stands at about Rs 2,300 crore.

The cement industry players are mulling a price hike.