CEMENT: For the FY 2019, the sale of cement for the Company was at 11.12 million tons, compared to 9.31 million tons of the previous year, showing an increase of 19%. During the FY 2018-19, the sale volume has grown both in southern and eastern markets due to strong demand in all the segments viz., retail, infrastructure and affordable housing. The company continues to focus on customer service, brand. building and developing niche markets while maintaining highest quality standards. The realization for the FY 2018-19 has been subdued due to pressure on prices during most part of the year besides, increase in transportation cost due to average diesel price increase by 17% during the year. Despite various efforts taken by the company for supply chain management and beneficial effects of relaxation of axle load norms by the Government, the overall logistics cost remained high during the year. The grinding units at Kolaghat and Vizag had enabled the Company to serve the eastern markets efficiently, which has contributed to the increase in market share in that area.

COST: While the prices of diesel have adversely affected the cost of transportation of all inward materials, the power and fuel cost have gone up sharply due to increase of pet coke and imported coal prices. The pet coke prices were around 102 to 106 USD during the first half of the year which had gradually softened during the second half of the year. The rupee depreciation during the year has also impacted the fuel price. The company has been constantly focusing on various cost reduction initiatives and improving productivity without compromising on quality.

WIND POWER: During FY 2018-19, the division has generated 24.26 crore units as compared to 26.24 crore units of the previous year. The installed capacity of the wind farm of the company continued to be at 125.95 MW as on 31-03-2019. The income during the year from the wind power business was Rs.61.75 crores as against Rs.66.96 crores of the previous year.

Performance for quarter ended March 2019

Ramco Cements standalone total income from operation inclined 22% to Rs 1,532.42 crore for the fourth quarter ended March 2019, helped by rise in cement sales volume and flat realisation. The cement sales volume (including exports) inclined 21.9% to 34.38 lakh tonne and cement sales realization rose 0.1% to Rs 4,440 per tonne.

The benefit of higher topline was offset by rise in operating cost. The Operating Margin (OPM) reduced by 50 bps to 21.2%. As per percentage to sales and net of stock adjustments, power & fuel cost increased 170 bps to 19.2%, while employee benefit expenses shed 60 bps to 5.4%, freight & handling cost 90 bps to 22.5%, and raw material cost 140 bps to 16.2%, during the period. Thus, the operating profit grew by 19% to Rs 325.12 crore.

The Other income declined by 42% to Rs 11.05 crore. The interest cost gained 23% to Rs 12.83 crore. Depreciation cost rose 2% to Rs 76.68 crore. As a result the Profit before Tax (PBT) inclined 20% to Rs 246.66 crore. The net tax expenses for the quarter fell 16% to Rs 81.29 crore. Effective tax rate declined to 33% from 47.1% corresponding previous quarter. Thus, the Net profit was up by 52% at Rs 165.37 crore.

Annual Financial Performance

For the financial year ended March 2019 (FY 2019), sales revenue for the period inclined by 17% to Rs 5,146.27 crore. With contraction of OPM by 480 bps to 20.1% due to pressure on cement prices for most part of the year and spiralling effect of fuel prices, thus, the operating profit fell down by 6% to Rs 1,036.53 crore.

During the year, the company has incurred CSR Expenditure, Contribution to various Chief Ministers' Relief Funds and Contribution to Political Parties, amounting to Rs.42.17 crore (PY: Rs.10.93 crore), out of which Rs.28.64 crore (PY: Rs.675 crore) relates to the quarter ended 31-03-2019.

Other income was down 22% to Rs 28.44 crore, thus, PBIDT decreased by 6% at Rs 1,064.97 crore. Further with drop in interest cost by 14% to Rs 50.87 crore, but rise in depreciation allowance cost by 2% to Rs 298.52 crore, the PBT fell by 9% to Rs 715.58 crore. With fall in taxation provision by 8% to Rs 209.69 crore, the Net profit shed 9% to Rs 505.89 crore.

DIVIDEND

For FY 2018-19, the Board of Directors of the Company have recommended a dividend of Rs.3/- per share. For the previous year, the Company has paid a dividend of Rs.3/- per share.

RAMCO WINDFARMS: For the FY 2018-19, the generation of power is 3.71 crore units as against 4.36 crore units for the previous year. The monetary value of the generation for the year ended 31.3.2019 is Rs.14.92 crores as against Rs.17.45 crores for the previous year. The subsidiary company has an installed capacity of 39.835 MW.

The scrip is currently trading at Rs 765 on 22nd May 2019 on the BSE.