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Fuel And Input Costs Squeeze Cement Firms Despite Volume Growth
OIL & GAS

Fuel And Input Costs Squeeze Cement Firms Despite Volume Growth

Major cement companies reported robust volume growth in the June quarter but narrower margins as fuel and input costs rose. UltraTech Cement recorded consolidated net profit of Rs 26.04 billion (bn) and revenue of Rs 246.48 bn, with domestic sales up 13.1 per cent to 39.2 million tonnes (mn t). The pattern of double digit revenue growth alongside margin pressure was evident industry wide.\n\nAmbuja Cements registered a fall in profit after tax to Rs 6.60 bn as revenue declined 7.51 per cent to Rs 94.74 bn and sales fell 14 per cent to 17.1 mn t. The company attributed the weakness to a calibrated reduction in exposure to the non trade segment, exits from low profitability regions and delays in ramping up recently acquired assets. Executives said the firm was not chasing low return volume.\n\nShree Cement saw net profit drop to Rs 5.31 bn while revenue rose to Rs 62.33 bn and cement sales reached 10.23 mn t. Dalmia Bharat reported net profit of Rs 1.92 bn on higher exceptional items with revenue at Rs 38.90 bn and volumes at 7.6 mn t. Nuvoco Vistas posted profit growth to Rs 1.60 bn on revenue of Rs 31.29 bn and sales of 5.3 mn t.\n\nJK Lakshmi and Birla Corporation recorded profit declines to Rs 1.08 bn and Rs 1.16 bn respectively amid rising revenues of Rs 19.05 bn and Rs 26.46 bn. JSW Cement posted higher revenue of Rs 18.96 bn but operating EBITDA fell to Rs 2.99 bn as fuel, packing and marketing costs rose, even as sales climbed to 2.34 mn t. Analysts noted average prices had risen quarter on quarter but remained below year earlier levels.\n\nIndustry commentary suggested stable demand from infrastructure, housing and construction supported volumes, yet margin recovery remained elusive due to imported fuel, freight inflation and geopolitical developments in West Asia. Firms appeared to prioritise profitable volumes over growth in low return segments to protect margins. The quarter underlined that volume gains were insufficient to offset input cost pressures.

Major cement companies reported robust volume growth in the June quarter but narrower margins as fuel and input costs rose. UltraTech Cement recorded consolidated net profit of Rs 26.04 billion (bn) and revenue of Rs 246.48 bn, with domestic sales up 13.1 per cent to 39.2 million tonnes (mn t). The pattern of double digit revenue growth alongside margin pressure was evident industry wide.\n\nAmbuja Cements registered a fall in profit after tax to Rs 6.60 bn as revenue declined 7.51 per cent to Rs 94.74 bn and sales fell 14 per cent to 17.1 mn t. The company attributed the weakness to a calibrated reduction in exposure to the non trade segment, exits from low profitability regions and delays in ramping up recently acquired assets. Executives said the firm was not chasing low return volume.\n\nShree Cement saw net profit drop to Rs 5.31 bn while revenue rose to Rs 62.33 bn and cement sales reached 10.23 mn t. Dalmia Bharat reported net profit of Rs 1.92 bn on higher exceptional items with revenue at Rs 38.90 bn and volumes at 7.6 mn t. Nuvoco Vistas posted profit growth to Rs 1.60 bn on revenue of Rs 31.29 bn and sales of 5.3 mn t.\n\nJK Lakshmi and Birla Corporation recorded profit declines to Rs 1.08 bn and Rs 1.16 bn respectively amid rising revenues of Rs 19.05 bn and Rs 26.46 bn. JSW Cement posted higher revenue of Rs 18.96 bn but operating EBITDA fell to Rs 2.99 bn as fuel, packing and marketing costs rose, even as sales climbed to 2.34 mn t. Analysts noted average prices had risen quarter on quarter but remained below year earlier levels.\n\nIndustry commentary suggested stable demand from infrastructure, housing and construction supported volumes, yet margin recovery remained elusive due to imported fuel, freight inflation and geopolitical developments in West Asia. Firms appeared to prioritise profitable volumes over growth in low return segments to protect margins. The quarter underlined that volume gains were insufficient to offset input cost pressures.

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