Got no chance to defend CCI allegation: Shree Cement

In an interview to CNBC-TV18 HM Bangur, managing director, Shree Cement spoke about the financial performance of the company in Q1FY13. 

He said the company’s volumes grew 30% in first quarter and capacity utilizations for the last two quarters is more than 100%. "We are able to sell whatever we are producing," he added.  Cement prices in Northern India fell by Rs 10-15 on an average in the first quarter due to adverse weather conditions. "Prices in the last two quarters were very good, infact they were the peak prices. But, in this quarter because of drought conditions earlier and heavy rains now, prices have slipped," he adding. Commenting on Competition Commission of India's (CCI) Rs 400 crore fine, Bangur said, the company was given a chance to defend. "No questions were asked; suddenly we find a fine on us. Our name was not there, so we will definitely challenge it in the court then judiciary will decide what to do." Below is the edited transcript of Bangur’s interview with CNBC-TV18. Q: What kind of volume growth you in the current quarter? A: Compared to last year same quarter, quarter on quarter (QoQ) it is about 30% growth. When that is compared to immediate April-June quarter, it is almost the same, it maybe -1%. Q: Where are capacity utilisations now? A: For the last two quarters it is more than 100%, we are able to sell whatever we are producing. Q: Where are prices now in the northern and the central Indian markets? A: Prices in the last two quarters were very good, infact they were the peak prices. But, in this quarter because of drought conditions and heavy rain condition now in North India, the prices have slipped. Q: To what kind of levels? A: Prices have slipped by Rs 10-15 on an average. Q: Do you think the strong volumes had anything to do with the elections in northern India, any one-off kind of an impact? A: I will not say that because every year from April-June and January-March, these six months are the best period. Maybe because last year volume growth was not that much and there was base effect, the two year CAGR it is almost the same. Q: Can you take us through how the merchant power business did and what kind of rates you were able to achieve there? A: Merchant power business is very tricky. One thing is that the states need power and they resort to power cut, but cannot even pay cost of generation to the private producers. Their own generation cost is higher than what they pay to power producers. Right now, we are able to sell power at Rs 4 plus and there is good margin. Q: You were not there in the first Competition Commission of India (CCI) order but in the second order you were slapped nearly Rs 400 crore fine, where do things stand with that? A: We deny it and we are quite surprised to get this because we had not got any chance to defend ourselves. No questions were asked; suddenly we find a fine on us. Our name was not there, so we will definitely challenge it in the court then judiciary will decide what to do.