Cement

The cement sales volume (including exports) inclined 14.7% to 22.74 lakh tonne for the third quarter ended December 2017. The sale volume of cement has increased by 8% during the nine months ended December 2017, compared to the corresponding period of the previous year. During the current year, the Sale of Cement in Southern markets has improved except Tamil Nadu which continues to witness slowdown due to shortage of river sand. However, the sales have grown in the Eastern markets. Due to increase in the prices of pet coke/coal the operating cost has increased during the current year. The company continues to strive for achieving better, operating efficiencies through various cost reduction initiatives in spite of the adverse effects on operating cost due to continuous increase in diesel prices.The Supreme Court, vide its order dated 13-10-2017, has ruled that the contribution to District Mineral Fund (DMF) for limestone under the Mines and Mineral (Development and Regulation) Amendment Act, 2015 shall be applicable from 17-9-2015 instead of 12-1-2015. Accordingly, the Company has reversed the provision amounting to Rs.12.38 Crores during the nine months ended 31-12-2017.

Interest cost for the nine months ended 31st December 2017 has come down due to repayment of borrowings in the earlier periods. Besides the company's ability to access cheaper sources of funds has contributed to overall reduction in borrowing cost.

Wind Power

For the nine months ended 31st December 2017, the wind farms have generated 2425 lakh units compared to 2549 lakh units during the corresponding period of the previous year. The income for the nine months ended 31st December 2017 was Rs.65.78 crores as against Rs.69.05 crores for the corresponding period of the previous year. The wind season has started early in the current year. The evacuation by Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) has been good during the wind season of the current year.

Performance for quarter ended December 2017

Ramco Cements standalone total income from operation inclined 12% to Rs 1056.36 crore for the third quarter ended December 2017, helped by rise in cement sales volume partially offset by drop in realisation. The cement sales volume (including exports) inclined 14.7% to 22.74 lakh tonne but cement sales realization dropped 1.9% to Rs 4606 per tonne.

The Operating Margin (OPM) reduced by 690 bps to 22.3%. As per percentage to sales and net of stock adjustments, power & fuel cost increased 250 bps to 16.3%, freight & handling cost 260 bps to 21.5%, and raw material cost 80 bps to 17%, while employee benefit expenses shed 30 bps to 7.2% during the period.

As a result, the operating profit fell 14% to Rs 235.29 crore. The Other income sank 76% to Rs 5.16 crore. The interest cost fell 39% to Rs 1603 crore. Depreciation cost rose 10% to Rs 72.97 crore. As a result the Profit before Tax (PBT) declined 45% to Rs 151.45 crore.

The net tax expenses for the quarter fell 45% to Rs 28.71 crore. Effective tax rate declined 660 bps to 19%. Thus, the Net profit was down 19% at Rs 122.74 crore.

For Nine Months ended December 2017, sales revenue for the period was up 8% to Rs 3151.61 crore. With contraction of 540 by 450 bps to 26.2%, the operating profit went down by 10% to Rs 827.26 crore. Other income was down 52% to Rs 17.63 crore, thus, PBIDT decreased by 12% at Rs 844.89 crore. Further with drop in interest cost by 42% to Rs 48.75 crore, but rise in depreciation allowance cost by 9% to Rs 216.78 crore, the PBT fell by 15% to Rs 579.36 crore. With fall in taxation provision by 19% to Rs 132.29 crore, the Net profit shed 13% to Rs 447.07 crore.

For the financial year ended March 2017 (FY 2017), sales revenue was up 10% to Rs 4564.23 crore. With drop in OPM by 20 bps to 25.8%, the operating profit went up by 10% to Rs 1176.40 crore. Other income was down 52% to Rs 42.80 crore, thus, PBIDT jumped 5% at Rs 1219.20 crore. Further with drop in interest cost by 43% to Rs 103.52 crore, fall in depreciation allowance cost by 13% to Rs 265.53 crore, the PBT grew 26% to Rs 850.15 crore. With jump in taxation provision by 53% to Rs 200.86 crore, the Net profit increased by 20% to Rs 649.29 crore.

Subsidiary Company- Ramco Windfarms

For the nine months ended 31st December 2017, the Company has generated 399 lakh units, with a monetary value of Rs.15.98 crores, as against 425 lakh units generated during the corresponding period of the previous year, with a monetary value of Rs.17.05 crores.

The scrip is currently trading at Rs 732.10 (6^th February 2018) on the BSE.