The performance of the cement companies during the second quarter of the current fiscal has been dismal. Not surprising, considering that the second quarter has been nothing short of a nightmare for these companies in the past. But this time expectations of healthier results were high as cement offtake was much better due to the poor monsoon. However, the second quarter results of the cement companies have belied all hopes.
Century Textile and Industries is the only company that has improved its operating margins during the second quarter vis-à-vis the first quarter. All the other cement companies succumbed to depressed cement prices and reported comparatively lower margins. Even Gujarat Ambuja Cement, which enjoys the highest margin in the industry, saw its margin halved in the latest quarter compared to last year.
Interestingly, single location companies and those catering to single regions like Dalmia Cement and Madras Cements have fared better than multi-location companies. Though cement prices remained depressed all over the country, companies catering to the south have bucked the trend.
Despite their poor performance cement companies are optimistic of an improved second half for the industry.
For more details please refer to Projectmonitor Print Version (1-15 November).