Highlights of the call-

• The financial year 2007-2008 was the best year for the company in terms of profitability. Gross Sales for the company increased by 51% to Rs.1691 crore during the year ended March 2008.
• EBITDA for the company was up by 56% at Rs 633 crore during the year, with the cement EBITDA per tonne increasing by 51% to Rs1519.
• The company posted a record net profit of Rs 347 crore, which was 51% higher, compared to the previous year.
• The company declared a final dividend of 75% (Rs. 1.50 per share of FV Rs.2) thus taking the full year dividend declared to 200%.
• The last quarter during the previous year was however a cautious quarter for the company when the EBIDTA saw a dip compared to the previous 3 quarters where the company posted excellent performance.
• The company faced extreme increase in cost during the previous year due to increase in prices of international coal, as well as increase in domestic freight rates.
• The fly ash and gypsum prices increased substantially during the previous year. The gypsum prices increased to Rs 967/MT as compared Rs 385/MT during the previous year. The fly ash prices increased to Rs 400 / MT as compared to Rs 380 / MT during the previous year.
• The company is aggressively planning to reduce energy consumption and other input utilization, thus the company is soon approaching the government for abatement of excise duties, export ban and additional coal linkages.
• The company’s clinker production capacity as on 31^st March 2008 was around 2.75 million metric tonnes and the company managed to utilize 90% of the total installed capacity during the year thus producing 2.45 million metric tonnes of clinker during the year.
• Production of cement during the year increased by 3.3 million metric tonnes as compared to 2.7 million metric tonnes during the previous year, whereas the sale of cement during the full year increased to 3.26 million metric tonnes as compared to 2.7 million metric tonnes during the previous year.
• In the sugar business of the company the cane crushed during the year increased to 2.4 million metric tonnes as compared to 1 million metric tonnes during the previous year and the company produced 2.46 lakh tonnes of sugar during the year.
• Sugar business is expected to see volume growth going forward due to improved sugar scenario as well as improvement in sugar prices.
• The company’s co-generation unit produced 30.5 crore units of power during the year out of which the company sold 19.5 crore units of power.
• The total installed capacity of co-generation units has increased to 79 MW and this is going to contribute significantly to the company’s top-line going forward.
• The company has a total installed distillery capacity of 21,600 kiloliters per annum as on 31^st March 2008. The company sold around 7,500 kiloliters of distilleries during the previous year.
• Despite the improving scenario in the sugar business the uncertainty relating to cane prices and the procurement policy still remains a concern for the company.
• The company maintains a cautious outlook in both the cement and the sugar business for the current year.
• The company’s new cement capacities that are coming up in Southern Andhra Pradesh and Tamil Nadu is expected to be completed by November 2008 and March 2009 respectively. Both these plants are expected to have a capacity of 2.25 million metric tonnes of cement each.
• After the commissioning of these plants the total installed capacity of the company would increase to 8 million metric tonnes per annum.
• The company has envisaged a capital expenditure of Rs 1,550 crore for its expansion plan, out of which the company has already incurred Rs 475 crore during the previous year. The rest amount is expected to be incurred during the current year.
• The company would fund the capital expenditure through loan of Rs 1,100 crore and the remaining Rs 450 crore through internal accruals.
• The demand in the South Indian market is expected to grow at 10% p a going forward and the capacity utilization of 85-95% level for the overall players in the market is expected to continue at least for the next 2 years.
• The company’s market share in the southern market by the end of the current year is expected to be around 20%.
• The company would see significant volume growth during the current year due to new cement capacities coming on stream during the current year. Sugar business would also see volume growth due to improving domestic scenario as well as increasing sugar prices.
• The total debt on the company’s book is around Rs 854 crore as on 31^st March 2008. The company has around Rs 87 crore of cash balance and around Rs 183 crore of liquid investment. These liquid investment were invested in the equity market, however after the correction of the equity market during the previous quarter the company has shifted most of its investment to debt Mutual Funds.
• Besides the Southern market the company is aggressively pursuing growth in the Eastern and the northern market of the country as well.
• The company do not see any further price reduction of cement in the southern market as most of the players in the southern market are operating under cross subsidy regime where they are supplying cement at lower prices to the government low cost housing and the other projects of the state government