Highlights-

• The net sales during the second quarter ended September 2008 increased by 27% to Rs 450 crore as compared to the corresponding quarter of the previous year.
• The cement sales went up by 17% to Rs 353 crore whereas the integrated sugar sales went up significantly by 111% to Rs 69 crore during the quarter under review.
• Despite this the company faced significant cost escalations on the energy front and hence had compression in EBITDA margins.
• The coal prices had gone up by around 60% year-on-year and that impacted the cost of fuel and power generation at the cement plant. The coal prices have started easing currently.
• The company still has some coal inventory purchased at high prices in August and September, so the full impact of this decrease in coal prices will be visible in the Q4 of the current year.
• The EBIDTA hence fell by 11% to Rs 117 crore due to significant increase in various input cost.
• The company’s net profit fell by 51% to Rs 40 crore during the quarter under review mainly on account of lower other income and higher interest charges during the quarter.
• The company sold 9.27 lakh metric tonnes of cement during the quarter under review.
• The company is focusing at a very tight working capital management and variable cost control. The company believes that it has still two quarters to go before there will be some slowdown in cement demand.
• The Kadapa project in Andhra Pradesh is going to get commissioned in December 2008 and the Tamil Nadu project in Ariyalur is going to get commissioned in June 2009.
• Demand in South market is healthy and the degree of consolidation in South is far better than the rest of the country. The southern market is insulated from imports as compared to the northern part of the country.
• In the sugar segment the company expects that the all India production to be approximately 20% lower and the state advised price for the season has been announced at 140 rupees a quintal.
• The gross debt in the company’s book is around Rs 2,028 crores and the net debt is Rs 1,692 crores.
• The company commissioned 18 MW power plants in July 2008.
• Thus the standalone total capacity of the company would increase to 8 million metric tonnes after the commissioning of the above projects.
• The company has spent around Rs 1,000 crore till September 2008 for the above project.
• Besides these projects the company is also planning to put up 10 million metric tonnes of cement capacity in phases across the country. The company has already identified sites and reviewing the macroeconomic situation in the world and in India the company would decide on the expansion.
• 100% of the cola requirement is imported, although in the power plant the company consumes about 20% domestic coal.
• The current cost of the debt of the company is around 10.13%. The cash balance in the book is around 350 crore.