Economy to bounce back once Covid-19 brought under control: India Cements

The Chennai-headquartered company commenced operations in April following the partial lifting of the nationwide Covid-19 enforced lockdown.

India Cements on Wednesday said that it expects the economy, driven by high domestic consumption and a strong rural base, to bounce back once the Covid-19 pandemic is brought under control.

Company Managing Director and noted industrialist N Srinivasan told reporters here that the Covid factor has resulted in the cement industry seeing a 25 per cent decline in March compared to last year, while capacity utilisation for the sector, as well as the company, was below normal levels.

The city-headquartered company commenced operations in April following the partial lifting of the nationwide Covid-19 enforced lockdown.

However, with the re-introduction of lock-down in certain parts of the state due to the rising Covid-19 cases, it was difficult to predict economic growth in the coming two quarters, he said.

"Given India's economy driven by high domestic consumption and a strong rural base, the company expects the economy would bounce back once the pandemic situation is under control," Srinivasan said.

India Cements on Wednesday declared the financial results for the fourth quarter ending March 31, 2020 with a consolidated net loss at Rs 11.76 crore against net profit of Rs 32.57 crore during the same quarter of the previous year.

Revenue from operations was Rs 1,176.40 crore during the quarter under review as against Rs 1,603.36 crore registered in the year-ago period.

During the quarter under review, the company's overall volume including clinker was lower at 26.47 lakh tonnes (as against 33.30 lakh tonnes in the same period last quarter) with an impact of Rs 85 crore.

The lower selling prices during the quarter resulted in net plant realisation coming down by 11 per cent as compared to last year's same quarter with an impact of over Rs 105 crore, he said.

Given the backdrop of low demand growth fuelled by Covid-19 situation, the company was able to achieve a capacity utilisation of 71 per cent for the year as against 79 per cent in the previous year, Srinivasan said.

The company, citing data provided by the Department of Industrial Policy and Promotion (DIPP), said the cement industry had a 'marginal negative growth' during the year under review as compared to reasonable 13 per cent growth in the previous year.

While the industry in the Southern region had a negative growth of 15 per cent in the fourth quarter, India Cements had a 18 per cent drop in production during January-March 2020 and 11 per cent dip for FY 2019-20, the company said.