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India Cements Ltd has said it was expecting better growth in the next six to nine months, on the back of new infrastructure projects and improvement in the economy.
Speaking to the reporters after the financial results for the first quarter, N Srinivasan, vice chairman and managing director also said the price increase effected from June onwards would help the company see the profits back.
"There are expectations of improvements in the sentiment based on Union Budget proposals for reviving growth, stepping up investments in infrastructure and housing. The bifurcation of Andhra Pradesh has also raised hopes for renewed economic activity under the new governments in AP and Telengana," said the company in its outlook.
The economic survey and experts have predicted the GDP to grow at close to 6 per cent during the current year from a lower than 5 per cent growth in the previous two years. Revival of monsoon and recovery in industrial output also would help the economy in general and cement industry in particular, it stated.
The south Indian cement market saw an increase of two per cent in demand during the quarter. The industry registered a growth of nine per cent during the first quarter of the current financial year.
Refuting builders associations' allegation that cement manufacturers had increased the prices arbitrarily, he said the price increase was a small percentage in the total price the builders put per square feet.
Announcing a net loss of Rs 2.96 crore and a total income of Rs 1,228.41 crore, he said the company and the industry had to bear the cost on increased freight charges due to load restrictions by transport authorities on outward and inward movement of material, increase in the prices of petroleum products and railway freight, which could not be passed on to the customers. Higher interest charges also affected, as it increased to Rs 93 crore, as compared with Rs 73 crore earlier.
The company's debt level at present is around Rs 3,375 crore. It is refinancing the debt and if the prices are kept at the current levels, it could slowly reduce it, according to officials. Its capacity utilisation stood at 69 per cent.Trinetra Cement Ltd, part of the company, posted a net profit of Rs 10.37 crore for the quarter ended June 30, 2014, as compared with a net loss of Rs 5.20 crore registered for the same period last fiscal.
