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India Cements share slips 5% despite strong Q4 earnings

India Cements share slips 5% despite strong Q4 earnings

The stock touched a 52-week high of Rs 210.90 on May 24, 2021, and a 52-week low of Rs 107.45 on September 09, 2020. Currently, it is trading 73.5 per cent above its 52-week low and 11.6 per cent below its 52-week high

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Share of India Cements declined 5 per cent to hit an intraday low of Rs 186.50 despite strong Q4 earnings. The company reported a net profit of Rs 50 crore in Q4 against a loss of Rs 10.4 crore in the year-ago period.

The share opened 1.65 per cent higher at Rs 199.70 against the previous close of Rs 196.45. At 14:53 hours, the stock was trading at 186.55, down 4.89 per cent on BSE.

The share has gained 42 per cent in one year and risen 10 per cent since the beginning of this year. India Cements share stands higher than 10 day, 20 day, 50 day, 100 day, and 200 day moving averages and lower than 5 day moving averages. Market cap of the firm fell to Rs 5,788.88 crore.

The stock touched a 52-week high of Rs 210.90 on May 24, 2021, and a 52-week low of Rs 107.45 on September 09, 2020. Currently, it is trading 73.5 per cent above its 52-week low and 11.6 per cent below its 52-week high.

Revenue from operations declined marginally to Rs 1,472 crore for the quarter ended March 2021 compared to Rs 1,176 crore in the year-ago period.

"With fight control on fixed cost, the EBIDTA for the quarter was Rs.213 crores against Rs.85 crores in the previous year. While the drop in cement volume meant a contribution loss of around Rs.300 crores for the year, the improvement in net plant realisation together with the reduction in fixed cost more than made up the shortfall and resulted in a higher EBIDTA of Rs.830 crores as compared to Rs.613 crores in the previous year," the company said.

In its outlook for the next fiscal year, India Cements said the farm sector remains bright spot of the economy, and the projected normal South-West monsoon for the third consecutive year is expected to better the prospects of the rural economy and improve the rural demand.

"In cities and urban centres, the work from home concept has turned popular in the wake of the pandemic and re-location of workplaces. This along with States allowing the construction activity to continue with certain conditions is expected to increase the house building activity and renovation of homes," it added.

The company further added that the expansionary Budget for 2021-22 allowing a higher fiscal deficit of 6.8% and its thrust on increased capex is expected to spur growth. If the promised CAPEX on infra, roads, metro rails including in the South takes place, there is scope for higher demand for cement. All these developments give room for cautious optimism for cement demand in the coming months.

In a separate release, the company also announced that it has re-appointed N Srinivasan as its Managing Director for five years with effect from May 26, 2021, subject to the approval of shareholders.