Expect consolidated margin to hold at 17% in FY17: Rain Ind

A: Basically about 10 percent of the group's revenue comes from the cement operations; about 90 percent comes from carbon and chemical business. There is an increase in the cement prices over the last couple of weeks, around Rs 40 has increased. There is an increase in the demand for the product and currently most of the cement plant in south India are operating around 60 percent capacity utilisation and we expect a gradual improvement in the capacity utilisations going forward with increase in demand for cement.

Q: How much of your own sales are in Andhra Pradesh and in the Telangana region and how much do you think your earnings before interest, taxes, depreciation and amortisation (EBITDA) per tonne could improve over the next couple of quarters?

A: The EBITDA per tonne on a group level is around Rs 600 per tonne and we expect there will be a gradual recovery in the EBITDA with improvement in the capacity utilisation particularly Rain has also implemented a waste heat recovery facility in one of our cement plant, where it will add about Rs 50 per tonne of additional EBITDA is expected from these cement operations.

Q: As you rightly said the major part of your business comes from the pet coke division, the carbon products division. What is the expectation for the second half of the year in terms of the operational performance or EBITDA per tonne there?

A: Second quarter of 2016 we follow the calendar year as financial year. In June 2016 we released our financial results about a couple of weeks back. Our EBITDA on a consolidated basis is Rs 444 crore and profit of Rs 157 crore. We maintain that about 16-17 percent EBITDA margin is what we realised on a consolidated basis at the group level and we feel that in the second half we should continue the trend of whatever we made in second quarter of 2016.

Till March 2016 there are certain issues like weak market and falling prices have reduced our operating margin but from June onwards prices have stabilised and some of our expansion projects like Russian CTP plant with 300,000 tonnes capacity have become operational.

We have started a new blending facility in India to increase the calcined petroleum coke (CPC) sales. Historically we were selling something like 5 lakh tonnes from the Indian CPC plant. Around 50 percent is sold in India, 50 percent is sold outside India but from the 5 lakh tonnes from the Indian plant we are making it to million tonnes by importing from our US plants and selling it in India and Middle East. So, the second half, we feel we should maintain the trend whatever we have delivered in the second quarter of 2016.