Revenue from operations went up from Rs 757 crore to Rs 1,022.5 crore the company said in a filing to the stock exchange. It said it has seen this performance despite the onslaught of the second wave of the Covid -19 pandemic during this quarter which impacted the overall volume and in the face of severe cost pressure through an increase in fuel price and continuous increase in the price of petroleum products.
“With the second wave of pandemic impacting some of the states in India, more particularly the main markets of the company, namely Maharashtra, Kerala, Karnataka and Tamilnadu resulting in severe lockdowns and movement restrictions, the economic recovery which was witnessed towards the end of the previous financial year was impacted during the first quarter of this current fiscal. The impact of these lockdowns is yet to be assessed as the pandemic has not fully subsided yet,” India Cements said in a statement.
The company said its cement production improved during the quarter by nearly 40 per cent and the overall sales including clinker was up by 37 per cent as compared to the previous year. India Cements achieved cement production of 18.88 lakh tons (13.43 lakh tons) and overall volume was at 19.45 lakh tons (14.28 lakh tons). The performance was generally in line with the industry in the south. However, when compared with the sequential quarter of last year, the volume was lesser by nearly 35 per cent caused mainly by the second wave of the pandemic.
“There are reports of the Indian economy in recovery mode in terms of various high-frequency economic indicators with further relaxations in Covid related restrictions and inoculation drive to contain the virus spread. With normal rainfall predictions, the rural economy is expected to do better creating more rural demand,” the company said.
Further, it believes that the work from home concept remains popular in urban and semi-urban centres. This along with the thrust on affordable housing, reduction in home loan rates, Income tax rebates and lower property taxes in some states has led to pick up in new house building, renovation of homes and construction activity.
“Centre has presented an expansionary Budget for 2021-22 which has envisaged a 34 per cent increase in capital expenditure and if the promised Capex on infra, roads, metro rails including in the South takes place, there is scope for higher demand for cement,” India Cements said.
The new Government in Tamil Nadu is expected to give push to housing and infrastructure development. Andhra Pradesh and Telangana Governments have started implementing irrigation, road building and other infrastructure projects and new housing schemes. It said all these developments give room for cautious optimism for cement demand in the coming months.
