Ramco Cements Q2 profit up 40% to Rs 236 cr even as revenue drops

Price stability, better sales of flagship and premium products in trade segment improve margins

Ramco Cements has posted a 40 per cent jump in profit to Rs 235.77 crore during the quarter ended September 30, from Rs 168.15 crore during the same quarter last year. Revenue dropped to Rs 1,265.31 crore from Rs 1,325.88 crore.

EBIDTA for the quarter ended September 30, 2020 was Rs 450.30 crore as against Rs.304.43 crore during the year-ago period, up 48 per cent due to better margins. Blended EBIDTA per tonne for the reporting quarter was Rs 2,035 as against Rs 1,118 during the previous corresponding period. 

During the quarter under review, stability in cement prices, improved sale of its flagship products and premium products in trade segment have played out well for overall improvement of realisations.

During the quarter ended Septmeber 30, 2020, the company sold 2.21 million tonnes of cement, versus 2.72 million tonnes a year ago, with a de-growth of 19 per cent. Demand was impacted mainly due to the lockdown, restricted access to containment zones due to Covid-19 and unusually heavy rains in Kerala, Karnataka, AP and Telangana during August and September. However, the company has grown in the eastern region despite heavy rains in the markets there. It added that demand is expected to pick up in the coming quarters.

The lower sales volume in the September quarter has resulted in under-absorption of overheads; however, the company has taken various sustainable austerity measures to reduce costs.