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Last Updated : Aug 05, 2015 03:55 PM IST | Source: CNBC-TV18

Realisations have improved in July by 3%: Orient Cement

The company reported a 20 percent fall in net profit at Rs 27.89 crore for the June quarter on account of lesser realisation in cement prices due to a dip in demand.


Deepak Khetrapal, managing director and chief executive officer, Orient Cement says the company poor Q1 numbers are on the back of weakness in the industry.


He says, "In Northern India and western India, the company suffered a huge demand de-growth in this last quarter because of which the volumes remained much lower than what the industry wanted and also the prices came under pressure."


However, he says July has been a relatively better year with prices increasing by Rs 10 per bag, thereby improving realisations by 3 percent.

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The company reported a 20 percent fall in net profit at Rs 27.89 crore for the June quarter on account of lesser realisation in cement prices due to a dip in demand.


Below is the transcript of Deepak Khetrapal's interview with Anuj Singhal & Ekta Batra on CNBC-TV18.


Anuj: You numbers didn’t look good, both in the topline front and on bottom line front. If you could tell us what went wrong for you on the quarter?


A: Well what went wrong with us is the story that has gone wrong with the cement industry as a whole in this last quarter excepting perhaps the eastern part of India but the northern India and western India have suffered a huge demand de-growth in this last quarter because of which the volumes remained much lower than what the industry wanted and also the prices came under pressure, so we have lost about 10 percent volumes in the last quarter over the same quarter last year and Maharashtra prices were low by 7-8 percent, so that has impacted almost every company that has operated in the western part of India or northern part of India.


As we sell 55-60 percent of our volumes in Maharashtra, we also have been impacted.


Ekta: So it is a five to seven percent decline that we saw in the western region I can extrapolate it?


A: In fact more than that, price erosion is between 8-10 percent in Maharashtra itself and even Gujarat prices remained quite low throughout the quarter although we sell we sell very small volumes but even Gujarat facing companies would have seen the similar erosion.


Ekta: You were talking about the price decline that we have seen in the western region, if you could just finish that point of yours as well as how much of a price decline have you seen in the northern region?


A: Northern region, we don’t operate in the northern region, so I don’t keep track of exactly what the prices are but the market buzz has been that north also has seen a huge meltdown in prices. It could be well in the region of 5-8 percent but since we don’t operate in that market, I don’t have the figures handy but Maharashtra is a market which directly affects is, so we monitor prices almost an hour-to-hour basis and Maharashtra and Gujarat too have suffered huge erosion.


Anuj: So what is the outlook for realizations from here on?


A: Things are looking somewhat better from late June onwards. July has been steady, the prices have not gone down, in fact they have improved by about Rs 10 a bag which is a recovery of roughly three percent. So, we are hoping that going forward, the kind of meltdown that we saw in the first quarter of the financial year would not be repeated during the year and the prices in southern India continue to be strong, prices in eastern India continue to be very good. So, hoping that with the volumes returning to the markets from middle of Q3 onwards, we should again have a good story.



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First Published on Aug 5, 2015 01:46 pm
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