India Cements Q3 profit down 79% on falling prices in South India

Tough competition in the south takes toll on performance of units in the region; higher fuel prices, depreciating rupee add stress to bottomlines.

India Cements reported a net profit of Rs 3.13 crore during the quarter ended December 2018 down 79.46% from Rs 15.24 crore in December 2017.

The company's total income was up about nine per cent to Rs 1,320.57 crore from Rs 1,216.75 crore.

Severe competition in the south for cement market share due to supply overhang took its toll on the operating performance of the units in the region, affecting cement prices, the company said in a statement.

Even within the south, price stability varied from state to state based on the concentration of units in the region.  

This drop in net plant realisation was compounded by the steep increase in the prices of fuel and petroleum products together with the depreciation of the rupee against the dollar. 

The company's primary market of Tamil Nadu was also affected with the cyclone Gaja devastating some of the districts in November 2018. 

"All these factors had a telling impact on the bottom line of the industry in south.  However, the silver line being the price of fuel, have started to ease which will have its favourable impact in the coming quarters," said in the statement.