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Heidelberg Cement posted 7% incline in net profit to Rs 62.40 crore despite of 2% drop in income from operation to Rs 513.75 crore for the second quarter ended September 2020.
Total sales volume declined 2.3% to 1.108 million tonnes (mt), while realization rose 1% to Rs 4,627 per tonne.
Quarterly Performance
The Company income from operation declined 2% to Rs 513.75 crore for the second quarter ended September 2020, on drop in sales volume. Total sales volume declined 2.3% to 1.108 million tonnes (mt), while realization rose 1% to Rs 4,627 per tonne.
Operating margin (OPM) rose by 100 bps to 24.5%, as drop in power & fuel expense by 50 bps to 21.9%, fall in raw material costs by 60 bps to 17.1%, and logistic expenses by 30 bps to 12.6% as a percentage to sales and net of stock adjustments. As a result, the operating profit (OP) grew 3% to Rs 125.95 crore.
Other income declined 19% to Rs 10.13 crore. With 29% fall in interest cost to Rs 13.13 crore but 6% rise in depreciation cost to Rs 28.10 crore, the Company booked 5% jump in PBT to Rs 94.65 crore. The tax outgo was up marginal 1% to Rs 32.25 crore. The effective tax rate fell by 130 bps to 34.1%.Thus, Net Profit advanced by 7% to Rs 62.40 crore.
Half yearly performance
For half year ended September 2020, Sales of the company declined 17% to Rs 921.45 crore. OPM rose by 20 bps to 25.4%. As a result, the operating profit (OP) fell 16% to Rs 234.28 crore. Other income declined 18% to Rs 19.91 crore. With 24% fall in interest cost to Rs 29.32 crore but 3% rise in depreciation cost to Rs 55.73 crore, the Company booked 20% fall in PBT to Rs 169.14 crore. The tax outgo was down 23% to Rs 57.80 crore. The effective tax rate fell by 110 bps to 34.2%.Thus, Net Profit dropped by 19% to Rs 111.34 crore.
Annual Financial Performance
For the financial year ended March 2020 (FY 2020), income from operation of the company advanced by 2% to Rs 2,169.62 crore. OPM inclined by 170 bps to 24.3%, thus, OP rose by 9% at Rs 527.79 crore. Other income grew by 51% to Rs 52.73 crore. After accounting for finance charges (down 1% to Rs 73.85 crore), depreciation (up 7% at Rs 108.61 crore), the PBT inclined by 17% to Rs 398.06 crore. The tax outgo was up by 7% to Rs 130 crore. The effective tax rate fell by 280 bps to 32.7%. Thus, the Net Profit grew by 21% to Rs 268.06 crore.
The scrip hovers around Rs 190.05 (23 October 2020) on the BSE.
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