The higher y-o-y earnings in Q3CY12 were mainly driven by higher realizations (up 24% y-o-y). Cement sales volume remained flat y-o-y.

Sequentially, earnings were impacted due to lower volumes (down 16% q-o-q) due to the erratic monsoon in MP from mid July to end August and realizations remained flat.

Going forward, cement production from the newly installed capacity of 3 MT is expected from December 2012 and all ratios are expected to improve.

The industry has grown 9.3% during January – June 2012 but de-grew 0.6% during July - August 2012, therefore grew 6.9% during January – August 2012.

The management expects a market share of 12% in MP and 9% in UP next year and sees Delhi, Bihar, and the Northern regions as the key markets.

Prices in central India now are roughly between Rs 275-290 range.

Heidelberg Cement expects average realizations to gradually move above Rs 300/bag levels in near term as there is an up tick in demand post the slack rainy season.

Last month, the company hiked cement prices but that was to offset the recent diesel price hike. 

Of late there is a pick up in demand this month. However, there is at least 5.5% hike in costs, sequentially and this has impacted margins.

In western markets like Maharashtra, Bulk: retail mix is 92:8 while it is 8:92 in central India and South markets. Sales in Western markets are 600,000 tonnes, central India 2 Million Tonnes and 350,000 tonnes in South.

Currently, debt is around Rs 850 crore and would be Rs 950-1000 crore at peak level.

The company is working on consumption (efficiency) parameters. They have improved quite a bit and expected to further improve by 12-13%.

The company has been trying to increase prices at some places. Overall, year on year basis the prices have increased very well. But quarter on quarter basis it has been flat. So, in terms of margins, it went down sequentially but improved on y-o-y basis.

The company has changed the fuel mix for petroleum coke. Petcoke is now cheaper than coal. They were earlier using 20% petcoke in raw mix, now it is using 35% petcoke. It will change with a new line coming up. It will go up a little more than 35%.

Western markets, in terms of prices are flattish. It is not going up significantly, neither is it coming down. In terms of volumes, this time in Mumbai, Ganpati festival has really affected dispatches for 12 days in September. Usually, it gets affected for three-four days. This time it was much more. In terms of volumes it couldn't supply but it has seen up tick in volumes in the last few days beginning October and is expected to pick up. Demand is there but the prices have not gone up at all.

Southern market, prices are inching up, volume is increasing so there can see again a pick up in demand. Prices are flattish. It is going up very slowly in the last few months but it has gone up.