Commenting on the Q1 performance, CEO of the Company said "I am pleased to share that we have achieved highest ever quarterly EBITDA of Rs.367 crore during this quarter. I must say that we have started this financial year on a good note. I am also happy to share that we have launched a premium product SUPERCRETE in Tamilnadu and Kerala meant for concrete during this quarter and response from the market is quite encouraging. This new product gives high early strength, high durability, high compressive strength and more importantly crack free concrete."

"We have been focussing on different segment of customers based on their usage and applications and provide solutions through our technical services team, thereby we ensure that right cement is used for right applications. We now have about 11 varieties of cements to meet the varied demands of customers, thanks to our sophisticated R & D centre. The company continues to focus on customer service, brand building and developing niche markets while maintaining highest quality standards."

"Our short-term borrowings rates are sub 7% amidst tight liquidity in the market. Our capacity expansion program is going on as per schedule. We are confident that we would become 2oMTPA company by end of 2020."

Performance for quarter ended June 2019

Ramco Cements standalone total income from operation inclined 13% to Rs 1,383.90 crore for the first quarter ended June 2019, helped by rise in cement sales volume and flat realisation. The cement sales volume (including exports) inclined 3.4% to 27.03 lakh tonne and cement sales realization rose 10% to Rs 4,989 per tonne. OPM increased by 550 bps to 26%, thus, the operating profit zoomed 44% to Rs 359.32 crore.

The benefit of higher topline was further boosted by softening in operating cost. The Operating Margin (OPM) increased by 550 bps to 26%. As per percentage to sales and net of stock adjustments, freight & handling cost decreased 380 bps to 20.3%, power & fuel cost 170 bps to 19.2%, raw material cost 120 bps to 15.5%, and employee benefit expenses 30 bps to 6.4% during the period. Thus, the operating profit grew by 44% to Rs 359.32 crore.

The coal and pet coke prices have softened during the quarter. ln the fuel mix, pet coke usage was reduced to 42% during the quarter ended June 2019, as against 62% corresponding previous quarter. The company has been constantly focussing on various cost reduction initiatives and improving productivity without compromising on quality.

The Other income inclined by 66% to Rs 8.16 crore. The interest cost gained 18% to Rs 13.52 crore. Depreciation cost rose 3% to Rs 75.79 crore. As a result the Profit before Tax (PBT) inclined 63% to Rs 278.17 crore. The net tax expenses for the quarter were up 90% to Rs 86.20 crore. Effective tax rate inclined 440 bps to 31%. Thus, the Net profit zoomed by 54% at Rs 191.97 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.

During quarter ended June 2019, the division has generated 7.82 crore units as against 6.73 crore units of the previous corresponding period. The income during the quarter from the wind power business was Rs.21,24 crore as against Rs.18.57 crore of the previous corresponding quarter. The operating expenses for the current quarter was Rs.5.08 crore as against Rs.4.55 crore during the corresponding previous period.

SUBSIDIARY COMPANIES

RAMCO WINDFARMS: For the quarter ended 30-6-2019, the generation of power is 1.21 crore units

as against 0.95 crore units for the previous corresponding quarter. For the quarter ended June 2019, the revenue from operations and EBIDTA were Rs.4.86 crore and Rs.3.70 crore respectively. The subsidiary company has an installed capacity of 39.835 MW.

RAMCO INDUSTRIAL & TECHNOLOGY SERVICES LIMITED (Aormerly known os Ontime lndustriol SeNices Limited): This company became subsidiary w.e.f. 21-3-2019. For the quarter ended June 2019, the revenue from operations and EBIDTA was Rs.8.09 crore and (-) Rs.0.73 crore respectively. The company's business includes man power supply services, transportation of goods by road and information technology services.

The Status of company's ongoing expansion programme is as detailed below:

• lnstallation of equipments have been completed for expansion of grinding unit in Kolaghat, West Bengal from 1 MTPA to 2 MTPA. Trial run is going on. Expected to be commissioned shortly.

• New grinding unit in Haridaspur, Odisha with a capacity of 0.9 MTPA is expected to commissioned during October, 2019.

• Expansion of grinding unit near Vizag, AP from 0.95 MTPA to 2 MTPA is expected to commissioned during March,2020.

• Expansion of clinkering capacity at the Jayanthipuram, AP from 3 MTPA to 4.50 MTPA along with WHRS capacity of 27 MW, is expected to be commissioned during Sep, 2020.

• New cement plant in Kolimigundla, Kurnool District, AP with clinkering capacity of 2.25 MTPA and cement capacity of 1 MTPA is expected to be commissioned during March, 2021. The proposed plant shall have the facility viz., railway siding, WHRS of 10 MW and thermal power plant of 15 MW.

• The company proposes to meet the above capex largely through internal accruals and for balance requirements, if any, through borrowing based on need. The company's borrowings as on 30-5-2019 was Rs. 1,998 crores (including current maturities of Rs. 244 crores), out of that Rs. 733 crores from banks and Soft/lnterest free loans of Rs. 352 Crores are long term in nature.

• The average cost of interest bearing borrowingis at7.62%.

The Competition Commission of lndia (CCt) vide its order dated 31-08-2016 had imposed a penalty of Rs. 258.63 Crores on the company towards alleged cartelisation. Our appeal along with the appeals of other cement companies had been dismissed by NCLAT vide its order dated 25-7-2018. Against the order, the company appealed to the Hon'ble Supreme Court, which by its order dated 5-10-2018 admitted the appeal and directed to continue the interim order passed by NCLAT. Accordingly, the company re-deposited Rs.25.85 Crores being 10% of the penalty. The Company backed by legal opinion, believes that it has a good case and hence no provision is made.

The scrip is currently trading at Rs 734.50 on 08 August 2019 on the BSE.