The growth was backed by a smart recovery in the selling prices and sustained efforts on cost reduction through better blending and reduction of power and fuel consumption.

OPM doubled from 11.6% to 23.2% due to fall in all expense heads led by Power& Fuel and raw material costs with operating profits subsequently up by 141% to Rs 246.05 crore.

Other income declined steeply during the quarter and while depreciation charges increased marginally by 3%, base effect saw PBT before rising by 225% from Rs 38.93 crore to Rs 126.45 crore and together with lower forex losses, PBT after forex shot up by 349% from Rs 27.38 crore to Rs 122.81 crore which later moderated to Rs 102 crore at PAT level after increase in tax rate from 8.77% to 16.92%.

During the quarter, under review the clinker production was lower at 17.07 lakh tons (21.21 lakh tons), the cement production was at 23.24 lakh tons (27.47 lakh tons) while the cement sale was at 23.11 lakh tons as compared to 26.52 lakh tons in the previous year. The clinker sale was also lower at 0.02 lakh tons as compared to 0.07 lakh tons in the same quarter of the previous year.

Commenting on the results, Mr. N. Srinivasan, Vice Chairman& Managing Director, said,

"We see huge untapped opportunity for growth and at ICL we are also announcing steps to be taken at the corporate level that will significantly enhance our operating profile in the business in the following quarters."

Commenting on the industry outlook, he further added "The long term fundamentals of the industry are very strong indicating CAGR of over 8%. For achieving reasonable growth of 8-9% in GDP continuously, a normal growth in cement consumption of a similar 8 to 9% can be anticipated which would help the industry to improve its capacity utilization and earn better returns in the medium and long term."

Quarterly performance

Sales were higher by 20% to Rs 1061.19 crore for the quarter despite reduction in volume by 14% over the same period on the back of better selling price.

OPM jumped by 1160bps to 23.2% due to fall in all expense heads lead by Power& Fuel and raw material costs. The power & fuel cost was down by 777bps to 22.6%, raw material cost, transportation charges were lower by 328bps and 324bps to 12% and 17.1% respectively, staff costs were lower by 92bps to 6% but other expenses were up by 318 bps to 18.9%. Operating profits were thus up by 141% to Rs 246.05 crore.

Other income was lower by 98% to Rs 0.53 crore compared to Rs 26.37 crore in the corresponding previous period. Interest costs were up 96% to Rs 58.26 crore and depreciation increased by 3% to Rs 61.87 crore but PBT before forex gain was higher by 225% to Rs 126.45 crore.

With forex losses at Rs 3.64 crore, down by 68%, the PBT after forex was higher by 349% to Rs 122.81 crore. Tax provisioning was higher by 766% from Rs 2.4 crore to Rs 20.78 crore in absolute terms and the tax rate was higher by 815bps to 16.92%. Thus the net profit was higher by 308% to Rs 102 crore.

FY11 performance

Sales for the period were lower by 8% to Rs 3509.27 crore.

OPM crashed by 1000bps to 12.6% due to rise in all expense heads lead by Power& Fuel and transportation costs. The material cost, transportation charges were higher by 170bps and 334bps to 14.7% and 20.2% respectively, power & fuel cost was up by 280bps to 29%. The fixed cost i.e. staff cost was higher by 65bps to 7.2% and that of other expenses by 147bps to 16.4%. Operating profits were thus down by 49% to Rs 442.23 crore.

Other income jumped from Rs 2.81 crore to Rs 31.06 crore. However despite lower interest cost (down 1% to Rs 141.71 crore) and due to 5% higher depreciation at Rs 244.03 crore, the PBT before forex gain was lower by 82% to Rs 87.55 crore.

With forex gains down by 95% to Rs 2.32 crore, the PBT after forex was lower by 83% to Rs 89.87 crore. Taxation was lower by 88% to Rs 21.77 crore in absolute terms and the tax rate was down by 909bps at 24.22%. Thus the net profit was lower by 81% to Rs 68.1 crore.

Shareholding Pattern

As of 30^th June 2011, Promoter and promoter group holds 25.35% (25.18% in the sequential quarter), FII's hold 26.34% (25.79% in the sequential quarter), DII's hold 17.64% (18.71% in the sequential quarter) and others hold 30.67% (30.32% in the sequential quarter).

The stock was hovering around Rs 67.5 on 16^th August 2011 on BSE.