The cement segment of Shree Cement grew just 2 percent in the quarter ended June. HM Bangur, MD of Shree Cement, says prices were bad, but volume growth in the quarter was around 17 percent. Price realisation, however, has taken a beating and has gone down by 13 percent, he adds.
Bangur though expects realisations to grow in the coming months.
The company has managed to achieve 80 percent capacity utilisation, including the Chattisgarh plant, in the quarter under review. Bangur expects the Chattisgarh plant to run at 60 percent capacity in the next quarter. This plant was commissioned in the June quarter.Shree Cement's fourth quarter profit fell 62.5 percent to Rs 104 crore compared to Rs 277 crore in the year-ago period, but overall earnings beat street expectations on strong growth in power business.
Below is the verbatim transcript of HM Bangur's interview with Mangalam Maloo & Ekta Batra on CNBC-TV18.
Ekta: Cement segment has just a growth of around 2 percent odd this time tell us what happened in terms of prices, volumes and realisation this quarter?
A: Cement prices were bad this time. Our volume growth in quarter is around 17 percent to be exact. Our cement and clinker sale put together has crossed 43.5 lakh tonne compared to 37.2 last year that is 17 percent up in the volume terms. However, the realisation has taken a beating. Price realisation has come down by 13 percent so what you are seeing the revenue growth of two percent is the resultant of volume increase and realisation drop. Realisation should come up in the coming months.
Mangalam: Can you give us the sense of your capacity utilisation because we understand that you have volumes also coming in from your recently commissioned Chhattisgarh plant so what was the capacity utilisation of the Chhattisgarh plant and capacity utilisation on the whole as well?
A: Capacity utilisation on whole has come to 80 percent in June 2015 quarter including Chhattisgarh. It is very good as the Chhattisgarh plant is very new and it will be running at around 30 percent because it is commissioned only in the quarter. In the coming month in the next quarter we expect Chhattisgarh plant to run at 60 percent then may be in the nine months time it should run at 75-80 percent.
Ekta: Take us through your performance in the power segment this time because that seem to have held up your numbers this quarter?
A: We are selling power and the power rate has decreased marginally but the volumes have increased one number and second thing the biggest gain was there because the commodity prices, the fuel prices in the international market has come down. Our fuel cost has been low so the power profit is there and it is still continuing in the same way.
Managalm: Do we expect these to sustain going forward and secondly could you also telling about your transport mix because your freight and forwarding cost have increased nearly 26 percent bringing your EBITDA down?
A: 17 percent is the volume up and secondly the freight has increased because in the East India the freight rates are higher. So the base when we see power should increase by 20 percent, 26 percent is because of the eastern side where the freight rates are higher.
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