The company has also taken pro-active steps in containing the fixed cost on contract labour, administrative and marketing overheads together with improvement in the operating parameters. The overall volume of the company had come down by 21% during the second quarter and nearly by 38% for the half year ended September’30, 2020.
With the backdrop of decline in demand, the overall volume of clinker and cement was at 2.107 million tonnes as compared to 2.667 million tonnes in the same quarter of the previous year. The variable cost of production was reduced by 6% (by Rs.130/- per ton) while the outgo on fixed overheads was also significantly reduced.
With the improved selling prices, the net plant realisation (NPR) was up by 11% as compared with the previous year.
On the outlook, he said, a sluggish performance by the cement industry in the last quarter of last year was further damaged by Covid-19 from March onwards.
The impact on the cement industry has not been consistent throughout India. While north, central and eastern India saw a substantial growth in demand which led to impressive performance by companies
located in that region, western India was impacted by Covid-19 and Gujarat and Maharashtra bore the brunt of the pandemic, said Srinivasan.
"Now after a good monsoon and with people having learnt to cope with Covid-19 and with decreased pandemic activity, we see revival in western India also which can lead to improved demand in the two quarters to come," he said.
Company's capacity utilisation in the first quarter was at 35 per cent and it improved to 53 per cent in Q2. For the half of the fiscal it was 43 per cent.