Orient Cement Ltd. expects its earnings to be muted in the seasonally-weak second quarter due to a slowdown in demand.
“Second quarter has always been historically lower than first quarter (in terms of performance),” DD Khetrapal, managing director and chief executive officer of the cement maker, told BloombergQuint. “Roughly half of third quarter is also slow as demand doesn't pick up till Diwali.”
He, however, is confident of clocking Rs 850-900 Ebitda per tonne for the financial year ending 2020. The company, he said, will reap benefits of lower petcoke and power prices over the next couple of quarters. Petcoke, a derivative of oil refining, is used as a raw material in cement manufacturing. Brent crude prices have declined around 9 percent in the past year.
The actual investment in our organic growth plans should start only from the first quarter of FY21. We don't see any investment possible in the current year. It is not that we are slowing it down but we need to work with the government to obtain various environmental clearances.DD Khetrapal, MD & CEO, Orient Cement
Key Highlights (YoY)
- Volume down 6 percent at 1.5 million tonnes.
- Ebitda/tonne rose 87 percent to Rs 997.
- Realisation/tonne rose 14 percent at Rs 4,552.
- Revenue up 7.5 percent to Rs 687.8 crore.
- Net profit up 3.5 times to Rs 55.9 crore.
- Ebitda rose 75.1 percent to Rs 149.6 crore.
- Margin at 21.7 percent versus 13.3 percent.
Shares of the cement maker snapped its two-day fall and rose 3.1 percent intraday to Rs 96.90 apiece compared to a flat Nifty Index.
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