The Ramco Cements has reported a growth of 99.28 per cent in its net consolidated profit during the quarter ended September 30, 2022. Its profit after tax (PAT) stood at Rs 3.71 crore in Q2 FY23 as against Rs 516.77 crore it registered in the corresponding quarter of the previous fiscal, the company said in a BSE filing.
The company’s net consolidated income stood at Rs 1,800.61 crore in Q2 FY23, a growth of 19.22 per cent from Rs 1,510.33 crore it recorded in the similar quarter last year.
As on September 30, 2022, the company’s net worth was Rs 6,670.43 crore, debt-equity ratio was 0.72, total debts to total assets was 34%, operating margin was 34% and current liability ratio was 21%, it said in the regulatory filing.
During Q2 2022, the sale of cement is 3.31 million tons, compared to 2.71 million tons in the Q2 2021 with a growth of 22%. EBIDTA for Q2 2022 is Rs 193 crore as against Rs 402 crore during Q2 2021 with de-growth of 52%, mainly due to sharp increase in fuel price and weak cement prices. The company could not pass on the full cost increase arising out of sharp fuel price hike, to its customers, it said in the media release.
Blended EBIDTA per ton for the Q2 2022 is Rs 582 as against Rs 1,484 during Q2 2021, which is one of the lowest in the last 8 years. Operating ratio for Q2 2022 is 11% as against 27% in Q2 2021.
During the Q2 2022, the blended fuel consumption per ton is equivalent to $199 as against $97 during the corresponding previous period. Since the overall fuel prices have peaked during the calendar year, the power & fuel cost per ton of cement for Q2 2022 has sharply increased to Rs 2,013 from Rs 1,057 in the Q2 2021.
Interest cost for Q2 2022 is Rs 55 crore as against Rs 29 crore during Q2 2021. The increase in cost is due to commissioning of clinkering units in Jayanthipuram Line III and Kolimigundla. The effective average cost of borrowing for Q2 2022 is 6.16% as against 5.11% in Q2 2021. Depreciation for Q2 2022 is Rs 122 crore as against Rs 99 crore during Q2 2021.
The cement production in Kolimigundla has commenced from September 2022 onwards. The company’s cement capacity has gone to 21 MTPA with clinker capacity of 14 MTPA.
The company propose to increase the grinding capacity of Haridaspur plant, Odisha by 0.9 MTPA at a cost of only Rs 130 crore since other infrastructures are already in place, thereby doubling its capacity to 1.8 MTPA.
During Q2 2022, the company has incurred Rs 504 crore towards capital expenditure. The net debt for the company as on September 30, 2022 is Rs 4,741 crore, out of which Rs 724 crore is short-term loan. The average cost of interest-bearing borrowings for Q2 2022 is increased to 6.42% from 5.47% in Q2 2021.
Ramco Cements in its future outlook said, the business environment continue to be uncertain due to rapidly changing economic environment in view of prevailing stress in geopolitical situation across the globe. This has put a strain on the fuel cost. Usually the short-term visibility of the business prospects is more clear, but this time it is other way around. This situation may continue for few more quarters considering the prevailing uncertainties, however the long-term prospects continue to be promising.
The continuing consolidation in cement industry coupled with speedy addition of fresh capacities could lead to increased appetite for market share amongst the players may put pressure on margins in the foreseeable future especially due to uncertainty in fuel prices.
Though there was some respite in the spot CIF prices of pet coke Aug 2022/Sept 2022, the spot prices has again sharply increased in Oct 2022. Any further surge in pet coke prices could affect the,margins adversely in coming quarters. The continuing volatility in fuel prices, faster rupee depreciation, hardening interest rates are bothering factors.