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Shree Cement has posted marginal 1% increase in net profit to Rs 235.43 crore on 3% jump in total income from operation to Rs 2091.18 crore for third quarter ended December 2016. OPM reduced by 20 bps to 22.4%, thus, operating profit escalated by 2% to Rs 468.95 crore.
The Company's board had approved a plan to build an integrated cement plant having clinker capacity of 2.8 mtpa and cement capacity of 3 mtpa at village Kodla in Karnataka at a cost of Rs 1,800 crore. The proposed plant is expected to be ready by the quarter ending 31 December 2018. The project is to be funded by internal accruals.
Shree Cement's board also approved the payment of a special dividend of Rs100 per share.
Performance for the quarter ended December 2016
Total income from operation (including the power segment revenue) of the country's most efficient cement manufacturer Shree Cement inclined 3% to Rs 2091.18 crore for the quarter ended December 2016. The growth in topline was aided by jump in revenue from cement segment by 12% to Rs 2063.99 crore (89% of total revenue) partially offset by loss in power business segment by 33% to Rs 246.47 crore (11% of total revenue).
The Operating Margin (OPM) reduced by 20 bps to 22.4%. The reduction in OPM was due to jump in other cost by 250 bps to 18%, freight & handling cost by 170 bps to 19.9%, raw material cost by 10 bps to 7.7%, and employee benefit cost by 20 bps to 6.2% as percentage to sales and net of stock adjustments. However, power & fuel cost fell by 450 bps to 14.2% during the period. As a result, the operating profit grew by 2% at Rs 468.95 crore.
The other income inclined 33% to Rs 135.61 crore. The interest cost rose by 75% to Rs 41.05 crore and depreciation went up 15% to Rs 317.62 crore. Thus, the PBT declined by 6% to Rs 245.89 crore. The net tax expenses was down 60% Rs 10.46 crore. The effective tax rate for the quarter reduced by 590 bps to 4.3%. Thus, the Net profit gained by marginal 1% to Rs 235.43 crore.
Nine month performance
Total revenue (including the power segment revenue) inclined 20% to Rs 6813.10 crore for the nine month ended December 2016. The gain in topline was chiefly due to jump in revenue from cement segment by 26% to Rs 6385.02 crore (86% of total revenue) while power business segment revenue declined by 9% to Rs 1043.67 crore (14% of total revenue).
The Operating Margin (OPM) expanded by 550 bps to 27.2%, thus, the operating profit grew by 51% at Rs 1856.08 crore. Other income grew by 51% to Rs 356.69 crore. The interest cost increased by 34% to Rs 97.98 crore. The depreciation went up 19% to Rs 903.86 crore. Thus, the PBT before EO gained 91% to Rs 1210.93 crore.
EO expenditure was NIL as against EO outgo of Rs 23.99 crore in the corresponding previous period, as a result, PBT after EO rose by 98% to Rs 1210.93 crore. With the tax outgo of Rs 176.33 crore as against tax outflow of Rs 27.20 crore corresponding previous period, the net profit rose by 77% to Rs 1034.60 crore.
The scrip is currently trading at Rs 15677.30 (30 January 2017) on the BSE.
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