Shree Cements Ltd, one of the biggest players in the cement sector in India, on February 4 reported a standalone profit after tax (PAT) of Rs 492 crore for the quarter ended December 2021, down 21.5 percent from Rs 626 crore in the year-ago quarter.
On a sequential basis, the profit for the company was down 15 percent from Rs 578 crore in the previous quarter.
The cement major’s standalone revenues stood at Rs 3,552 crore, up by 7 percent from Rs 3,326 crore in the same period a year ago. Compared to the previous quarter, revenue is up 11 percent from Rs 3,206 crore reported in the September quarter.
The December quarter performance was affected by lower volumes due to delayed monsoons, poor labour availability, regional issues such as construction ban, sand availability and truckers strike, coupled with a rise in power-fuel costs.
Costs as a percentage of sales
The input cost bill for the company increased during the quarter both on a yearly as well as sequential basis.
The cost of raw materials as a percentage of sales increased 8.0 percent compared to 6.9 percent last year and 6.7 percent in the preceding quarter.
Power & Fuel bill for the company jumped by 560 bps on year to 22.7 percent from 17.2 percent. The sequential increase was 310 bps from 19.6 percent in the previous quarter.
Employee costs were higher by 40 bps on year at 5.5 percent while on quarter there was a saving of 80 bps.
The company was able to save on its freight costs, partly due to lower volumes and partly by bringing in efficiencies. Freight cost during the quarter was down 310 bps on year at 21.4 percent and down 60 bps on quarter.
Other expenses, though they increased by 140 bps on year to 16.2 percent, were down 130 bps quarter on quarter.
Margins
The lower volumes coupled with higher pet-coke and fuel costs severely impacted the margins of the company.
The operating margins for the quarter came in at 26 percent, slumping by about 10 percent from 36 percent operating margins reported in the same period a year ago. On a sequential basis, there is a decline of 700 bps from 33 percent reported in the September quarter.
Lower depreciation and finance costs cushioned the decline in net margins to a certain extent. The net margins for the quarter stood at 14 percent compared to 19 percent in the same quarter a year ago and 18 percent reported in the previous quarter.
Capacity Addition
The Company has commenced commercial production at its Clinker Grinding Unit having capacity of 30 MTPA at Village Patas in Pune District of Maharashtra on 01st February, 2022.
Dividend Payout
The company has declared an interim dividend of Rs 45 per equity share of Rs 10 each for the Financial Year 2021-22. The record date for the payment of the same has been fixed as Saturday, February 12, 2022, and it shall be paid from Monday, February 28, 2022.
The stock of Shree Cement closed at Rs 24,724, down Rs 76.9 from its previous close, on the National Stock Exchange on February 4. The stock is down 8.7 percent in the last year and down 8.2 percent in the last month.
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