Highlights-

• The total income of the company during the 2^nd quarter ended September 2009 increased 24% to Rs 564 crores as compared to the corresponding quarter of the previous year.
• The sugar volume increased 23% whereas the cement volume increased 13% during the quarter, and the realization for both these segments increased 59% and 1% respectively.
• The sugar sales during the quarter increased 73% to Rs 120 crore whereas the cement sales increased 14% to Rs 402 crore and the other business segment sales increased 35% to 37 crore.
• The OPM margin increased 85 bps to 26% during the quarter under review, whereas the net profit margin rose 62 bps to 10%.
• The net profit stood at Rs 54 crores, which was 34% higher compared to the corresponding quarter of the previous year.
• The net sales during the first half of the current fiscal grew by 29% to Rs 1111 crore whereas the net profit increased 24% to Rs 112 crore.
• The sugar performance considerably improved due to improved pricing environment whereas the cement profitability was impacted due to lower utilization and higher freight cost.
• Freight cost for cement was high due to changed rail-road mix in favor of road and also due to increase in rail freight.
• The coal price was Rs 5600 per metric tonnes during the quarter ended September 2009.
• The all India cement prices increased by 6% during the 2^nd quarter on y-o-y basis. The eastern market witnessed a firm 9% increase in price during period; however the price in south was flat due to regional demand supply imbalances. Flat Andhra Pradesh demand and high capacity addition in this region impacted the prices by up to Rs 30 per 50 kg bag.
• Going ahead the company anticipates pan India cement capacity addition of around 25 million metric tonnes by the end of the current fiscal, of which 10 million metric tonnes would come-up in the southern market.
• The company expects downward pressure on pricing, but since the cost structure has also fallen, the operating impact would be negligible.
• The coal price during the quarter was lower by 17% whereas the gypsum prices were lower by 20% as compared to the same period last year.
• The all India cement demand during the 2^nd quarter of the current fiscal rose by a healthy 12% whereas the demand in South remained flat at just 4% during the period under review. However strong demand was witnessed in the eastern market, viz- Orissa and West Bengal.
• The company's cement production increased to 10.59 lakh metric tonnes of cement during the quarter as compared to 9.33 lakh metric tonnes of cement during the same period last year whereas it sold 10.46 lakh metric tonnes of cement during the quarter ended September 2009 as compared to the same period last year.
• The cement production and sales during the first half ended September 2009 increased 15% and 11 % to 10.53 lakh metric tonnes and 20.06 lakh metric tonnes respectively.
• Increased volume growth has helped the company to gain market share in the market it operates.
• 51% of the company produce during the first half was sold in Tamil Nadu, whereas Kerala, Karnataka and Andhra Pradesh contributed 25%, 11% and 9% of the company geographic mix.
• The net realization per tonnes of cement improved to Rs 3,807 per metric tonnes during the 2^nd quarter ended September 2009 as compared to Rs 3,767 per metric tonnes during the corresponding quarter of the previous year.
• The average net realization during the half-year ended September 2009 was Rs 3898 per metric tonnes as compared to Rs 3708 per metric tonnes during the corresponding period of the previous year,
• The cement clinker ratio during the first half was 1.29. 70% was PPC production.
• The lead distance was maintained at 300 kms.
• Improved liquidity in the market and the reviving demand from the urban real estate and construction segment is expected to augment the demand for cement going ahead.
• The all India sugar production during the current sugar year is estimated to grow by 7% to 15 million metric tonnes. However the domestic demand is around 22 million metric tonnes, thus imports is expected to substitute for the gap in domestic demand and supply.
• The domestic price of sugar increased by 28% since June 2009 to 30,000 per metric tonnes during September 2009.
• The sugar sales during the quarter ended September 2009 was 44,275 tonnes as compared to 36,049 metric tonnes during the corresponding quarter of the previous year.
• For the first half-year ended September 2009 the integrated sugar sales increased to 97,012 tonnes as compared to 67,229 tonnes during the corresponding period of the previous year.
• During the quarter under review the sugar realization improved 59% to Rs 26,150 per metric tonnes.
• The company did not crush any cane during the quarter due to this being an off-season. However crushing will start in the 3^rd week of November.
• Favorable sugarcane and cogeneration power regulations announced in the form of fair and Remunerative Price (FRP) which came into effect from Oct 1, 2009, would eliminates arbitrary cane procurement pricing.
• Besides the notification of Energy Policy 2009 for co-generation business by the Uttar Pradesh government will permits alternate fuels usage in off-season by cogeneration units and will permits export of 50% power outside state.
• As the global inventory of sugar is expected to drop to historical lows in next 12 months, international and domestic prices is expected to inch upward.
• The trial run for clinkerization in the 2.5 million metric tonnes (100% PPC) green-field Ariyalur project in Tamil Nadu was commenced during September 2009. The 27 MW thermal power plant; in Ariyalur is expected to be commissioned in the 3^rd quarter of the current fiscal.
• The company has so far spent Rs 1,525 crore on the green-field project in Ariyalur.
• Thus the Rs 2500 crore capital expenditure that the company had announced 2 years back has been completed.
• The company has further announced a capital expenditure of Rs 4500 crore of which Rs 3100 crore would be debt which are already being tied-up for the 10 million metric tonnes green-field cement plant.
• All the sanction for the project is already received; however the company is yet to start the construction and is waiting the board's decision to do the same.
• The debt as on September 2009 in the company's book is around Rs 2317 crore, of which Rs 1844 is project loan, whereas the rest is sales tax and working capital loan.
• The net debt equity ratio is 1.5.
• The cash and cash equivalent is Rs 217 crore.
• The current cement capacity of the company has increased to 9 million metric tonnes per annum, whereas the capacity of OCL where the company holds 21.8% is 5.3 million metric tonnes.