Demonetisation did not impact us, says N Srinivasan

Cement major India Cements said on Monday it did not feel the pinch of Government's demonetisation. "Till today, it is business as usual," said the company's Vice Chairman and Managing Director, N Srinivasan, and added that thedemand continued to "be as in the past". However, whether the inadequate supply of fresh currency notes will have a material effect remains to be seen, he said.

Unlike in other markets, where the cement major has a presence largely in the non-trade markets, in the south, the trade market contributes to about 70 per cent of its sales, while non-trade contributes the balance.

The trade channel largely sells only to individual builders, who construct houses for self consumption.

Most of the company's business has been happening through cheque or cards, said Srinivasan.

It is interesting to note, after the two years of nil growth, the cement industry is back in growth track of around 7-8 per cent. Current demand is estimated to be around five million tonnes.

India Cements capacity utilisation across its plants has increased to 68 per cent during the second quarter from 60 per cent a year ago. The company's overall volume, including export, increased to 2.4 million tonnes from 2,17 million tonnes in the same quarter a year ago.

One of the main reasons was exports, said Srinivasan, which are expected to double from last year's level of about Rs 100 crore.

India Cements posted a growth of 62 per cent in net profit at Rs 62.41 crore during the quarter ended September 30, 2016, as compared to a net profit of Rs 38.50 crore during the same quarter of the previous financial year.

Srinivasan said though net plant realisation was lower by around eight per cent, the company managed to post good growth due to improved operating efficiency through reduced power cost and through increased usage of cost effective funds in the overall mix.

Total income from operations stood at Rs 1,314.44 crore during the quarter as against Rs 1,229.10 crore registered during the same period of last fiscal year, up 6.9 per cent.

READ OUR FULL COVERAGE ON THE MODI GOVT'S DEMONETISATION MOVE 


Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel