Key highlights

• The company recorded a 7% volumetric increase in Q2FY14 with sales numbers at around 12.89 lakh MT vs 12.06 lakh MT in previous corresponding quarter, despite depressed market in the marketing areas of North and West. On the overall, nearly 35% sales volume came from non-trade cement.

• The company realization has dropped by 16% in Q2FY14, resulting in a slide in turnover for the quarter to Rs 500.86 crore, a drop of about 9% from Rs 551.59 crore in the corresponding previous quarter.

• The company operating profit declined to Rs 64.84 crore in Q2FY14 from Rs 128.30 crore in Q2FY13, in spite of reduction in its cost by improvement in all round efficiencies. The overall operating margin (OPM) was 13% in Q2FY14 as against 23% in Q2FY13. The company cash profit for the quarter stood at Rs 45.66 crore and after providing for depreciation of Rs 33.95 crore and Rs 1.41 crore towards tax, the Company PAT stood at Rs 10.30 crore, which is considerable fall from the PAT of Rs 50.88 crore in the corresponding previous quarter.

• The company profitability was adversely affected by steep fall in prices coupled with increase in the freight costs. The fall in cement demand, especially from the infrastructure and the realty sector is a cause of concern.

• The company power consumption declined to 72 Kwh from 75 Kwh. The company also improved its fuel consumption to 729 K.Cal/kg of clinker in Q2FY14 from 738 K.Cal/kg of clinker achieved during corresponding quarter.

• The company has commissioned its AAC Block (Autoclaved Aerated Concrete Block) units at Jhajjar (Haryana) in Q2FY14.

• The company ongoing projects, including the Greenfield Project at Durg, expansion of grinding capacity at Jhajjar, Haryana, augmentation of Kiln 1 at Jaykaypuram and Solar project in Rajasthan continuing with satisfactory progress. The Company capacity expected to enhance from present 5.7 million tonne to 11.3 million tonne in FY15 after completion of all these projects.

• The company has spent Rs 40 crore of the total Rs 125 crore capex of the Jhajjar project by the end of September 2013 and remaining balance expected to use by end of FY14. Also, the company spent Rs 25 crore of the total capex of Rs 125 crore of the Kiln 1 and remaining planned to utilize in another six months. For Durg, the company has used Rs 940 crore by end of September 2013 and balance of Rs 200-250 crore is expected to use by end of FY14. The company has planned Rs 550-600 crore capex for FY14 and similar Rs 550-600 crore in FY15.

• The company's Durg project is expected to go on stream in Q3FY14, Kiln 1 augmentation is expected to happen by March 14. The company expansion of grinding capacity at Jhajjar will take the company grinding capacity to 6 million from present 5.3 million and clinkerization capacity will increase from 42 lakh tonne to 46 lakh tonne.