India Cements posts net loss of Rs 74 crore in Q1 due to dip in sales

Chennai-based India Cements has recorded a net loss of Rs 74 crore for the first quarter of FY24, following a decrease in sales and revenue. The company registered a net profit of Rs 84 crore during the same quarter in FY23.

Its revenue from operations for the quarter under review declined by 5 per cent to Rs 1,437 crore compared to Rs 1,514.4 crore in the corresponding quarter a year ago. In the same period, its total expenses saw a reduction of 3 per cent to Rs 1,541 crore. The cement sales for the quarter were reported at 2.66 million tonnes compared to 2.79 million tonnes in the previous quarter. The decrease in sales was primarily due to a liquidity crunch experienced by the company as a result of lower margins and losses.

N Srinivasan, vice chairman and managing director of India Cements, said that to overcome the liquidity crunch, the company requires Rs 150 crore in working capital and an additional Rs 250 crore for capital expenditure. It hopes to raise Rs 100 crore in working capital within two weeks. As of June 30, the company had a debt of Rs 2,940 crore.

The fuel cost, which escalated to a high of Rs 2.95 per Kcal in the third quarter of the previous year, dropped to around Rs 2.38 per Kcal for the quarter under review. The overall variable cost for the quarter was marginally lower by 2 per cent compared to the first quarter of the previous year at around Rs 52 per tonne. However, the sales realisation was lower by 5 per cent compared to the previous year at around Rs 268 per tonne.

The company has engaged the services of experts like FLS and Krupp Industries to conduct a detailed study of the operating parameters of plants for refurbishment/modernisation to align them with state-of-the-art modern plants. India Cements has also partnered with Boston Consulting Group to scrutinise the operations at three of its plants in Andhra Pradesh and suggest measures for enhancing operational efficiency. In addition, the company plans to monetise some non-core assets to enhance liquidity, improve operating performance, and meet some of the minimum capital expenditure requirements.