Shree Cement Ltd. reported a sharp spike in quarterly profit despite the Covid-19 pandemic stalling construction and economic activities across the country.
Net profit rose 83.2 percent over last year to Rs 588.2 crore in the quarter ended March, according to an exchange filing. That compares with the Rs 420.7-crore consensus estimate of analysts tracked by Bloomberg.
Shree Cement Q4 Results: Key Highlights
- Revenue fell 2.04 percent year-on-year to Rs 3,217.4 crore (Estimate: Rs 3,170 crore)
- Margin expanded 770 basis points to 33.5 percent.
The bottom line was mainly aided by an improved operational performance. The company's earnings before interest, tax, depreciation and amortisation rose 27.3 percent to Rs 1,079 crore—highest in at least nine quarters. That came as fuel and power expenses fell, while employee cost remained stable.
A more than twofold jump in other income at Rs 98 crore also lifted Shree Cement's profit after tax.
India imposed a nationwide lockdown to fight the coronavirus pandemic, bringing the economy to a virtual standstill. Cement mills, despite witnessing better volume growth in the first two months of the year, faced disruption as operations stopped.
Other Highlights
The volumes fell by 5.5 percent over the previous year to 6.9 million tonnes.
Realisation rose by 8 percent year-on-year to Rs 4,760 per tonne, led by higher prices of cement in northern India compared to eastern and southern parts of the country. The company's Ebitda per tonne—a key metric for cement companies—rose 34 percent over the previous year to Rs 1,564.
The real problem is demand, not production, Shree Cement's Managing Director HM Bangur had told BloombergQuint earlier in April. Bangur said while the government allowed cement mills to restart operations from April 20, it wouldn't have much of an impact because “they cannot store what they produce”. Shree Cement expects a 15-20 percent contraction in demand for cement for the ongoing financial year.
On Friday, Shree Cement shares rose 1.26 percent to Rs 18,665.00 apiece on National Stock Exchange while the benchmark Nifty 50 gained 0.57 percent to end the day at 9,251.50 points. The quarterly results were declared after market hours.
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