India Cements may turn profitable, Q2 net seen at Rs 35 cr

India Cements, which will announce its second quarter earnings today, is expected to turn profitable. Net profit is likely to be at Rs 35 crore as against net loss of Rs 22.5 crore in same quarter last year, according to the average of estimates of analysts polled by CNBC-TV18.

Analysts expect good set of numbers from the company as South has been strong point for all cement players.

Total income from operations is seen going up 7 percent to Rs 1,170 crore in the quarter ended September 2014 compared to Rs 1,093.8 crore in the year-ago period.

Operating profit may jump 48 percent year-on-year to Rs 200 crore and margin may expand 470 basis points to 17.1 percent in September quarter.

Factors:

Analysts expect volumes to decline 5 percent Y-o-Y to 2.32 million tonnes.

Margin may be aided by strong realisation and lower international coal. Margin may even gain from very low international coal prices as it imports 70 percent of their requirement.

Key issues to watch out for are demand and pricing outlook, especially in South India; timeline and capex plan for Tamil Nadu expansion of 2.6 million tonnes; and further clarity on management thought process in IPL demerger.