Key highlights

• The Company consolidated sales volume grew 22% to 10.22 lakh tonne in Q4FY21. For FY21, sales volume grew by 1% to 31.61 lakh tonne. Plants operated around 70% during the Q4FY21.

• The Company consolidated sales revenue rose by 38% to Rs 417.65 crore for Q4FY21. Operating EBITDA rose by 133% to Rs 104.25 crore. EBITDA margin expanded by 1,000 bps to 25% for Q4FY21. Its net profit zoomed to Rs 49.84 crore in Q4FY21 from Rs 1.18 crore corresponding previous quarter. The growth was largely owing to strong demand and steady realisations across its key markets. Infrastructure projects along with pick up in construction and residential activities translated into strong volume growth.

• The Company operational profitability was partly offset by rising input prices. Both diesel and pet-coke prices have been trending higher over the past quarter, which have exerted pressure on the margins. The Company plans to continue to work diligently towards containing the costs and improving efficiencies; prudent inventory management helped soften the overall impact on margins during this quarter. The completion of our MP and Odisha projects will help the company to further rationalize freight costs going forward.

• The Company expects its diversified presence, better product mix, strategic cost rationalization positions well to benefit from the pickup in construction cycle. Commissioning of the new units will also help the company to build cash flows and fund the next growth phase for the Company.

• The Company raw materials cost on consolidated basis was at Rs 662/tonne in Q4FY21 as against Rs 625/tonne in Q4FY20. Employee cost rose by 1% to Rs 229/tonne. Freight cost jumped 4% to Rs 742/tonne, owing to higher diesel prices. Power & fuel cost was down 5% to Rs 864/tonne, due to usage of alternative fuel and optimization of thermal efficiency. Optimal thermal efficiency at Mattampally Plant 725 Kcal /Kg of Clinker & Gudipadu 695 Kcal /Kg of Clinker. The Company fuel rate are on upward trend currently, which company plans to optimize by start using mix of pet coke and coal.

• The Company Board of Directors approved proposal of merger of its wholly owned subsidiary Sagar Cements (R) Ltd with it on April 26, 2021. Benefits derived from the merger include – Enhancement in the scale of operations providing a significant impetus to the growth of the Company, since both the companies are engaged in the same line of business. These may be derived by drawing upon synergies between the two companies. Synergies in business activity, consolidation, focused attention, centralized administration, economy of operation, integrated business approach and greater efficiency. Reduction in the cost of overheads and improvement of organization efficiency. The consolidation by way of amalgamation would lead to more efficient utilization of capital and an improved financial structure. The benefit of consolidation of financial resources, managerial and technical expertise of both entities will result in overall optimization of operational and administration costs.

• The Company plans to achieve its objective of attaining 10 MT capacity by FY 2025. The Company greenfield projects of Satguru Cement Private Limited of 1 MTPA, Madhya Pradesh and Jajpur Cements Private Limited of 1.5 MTPA, Odisha is progressing as per schedule. These capacities will get commissioned by the end of Q2FY22. Post these expansions the total capacity will increase to 8.25 MT.