The India Cements Ltd. (ICL) has reported a net profit of ₹3.13 crore for the quarter ended December 2018, down about 80% from ₹15.24 crore in the year-earlier period.

Total income increased to ₹1,320.57 crore from ₹1,216.75 crore. Volume-wise, sales had risen 8% to 29.38 lakh tonnes from 27.26 lakh tonnes. With a clinker sale of 0.2 lakh tonnes, the overall sales volume is up at 29.58 lakh tonnes. The lower profit is primarily attributed to a combination of drop in net plant realisation and rise in input costs.

Better times ahead

Addressing the media here on Monday, N. Srinivasan, vice-chairman and managing director, termed the third quarter a “difficult one.” However, he said, “the worst is over, I think.” He said the operations would turn for the better going forward.

Pointing to price firmness in the past week or so on the eve of busy season (January-September), he said that the trend would sustain in the coming days with a pick-up in demand.

“This will boost capacity utilisation,” he added. Currently, the capacity utilisation of ICL stood at about 76%.

Mr. Srinivasan said that poor pricing forced ICL to pull out of certain markets and focus on its primary markets i.e. south and Maharashtra.

To a question, he said that rise in variable cost had shaved off nearly ₹200 a tonne (close to ₹57 crore) for ICL. The variable cost had gone up by nearly 9% on a year-on-year basis. Following an increase in volume during the quarter under review, ICL managed to cut this loss (due to rise in variable cost) to ₹27 crore.

Pointing to a number of visible demand-inducing factors Mr. Srinivasan said, “the fourth quarter will be substantially better than the third quarter.”