ANALYSIS OF RESULTS III Quarter FY 2002

1 Operational Performance

The cement plant operated at very high capacity utilization levels. The total clinker production was higher by 12.3% at  1.67 million tonnes against 1.49 million tonnes in the third quarter of the previous year. Similarly production of cement was higher by 29.4% at 2.02 million tonnes against 1.56 million tonnes

The total sale of cement during the quarter was higher by about 30% at 2 million tonnes against 1.54 million tonnes. This was on account of higher domestic sales which were up 22% as compared to the previous quarter last year as well as high export sales. The domestic sales was 1.58 million tonnes   as against 1.30 million  tonnes and the export sales were at  0.42 million tonnes  as against 0.24 million tonnes.

2. Other Income

Other income during the current quarter was high on account of  better returns on the   deployment of surplus funds.

3 Operating Margin

The operating margin during the current  quarter is 32% as compared to 38% in the third quarter of the previous year. The drop in the margin has been restricted to 6% inspite of a drop in the realization by 13.7%, primarily on account of higher productivity and operational efficiencies. The operating profit for the quarter is Rs. 1194.30 million as against  Rs. 1305.60 million in the third quarter of the previous year.

4.Interest

The interest expenses during the current period have reduced substantially by 32% to   Rs. 218.30 million as against Rs. 319.50 million. This is on account of restructuring of the high interest bearing debt and retirement of debt.

5.Profit  after Tax

After providing for tax of Rs. 45 million (as against Rs. 55 million in the previous year), Profit after tax is higher at Rs. 593.80 million as compared to Rs. 587.30 million in the previous quarter of the  last year,  primarily on account of low interest cost, higher productivity  and operational  efficiencies.

6.Deferred Tax Liability 

As per the new Accounting Standard (AS22), company has recognized a deferred tax liability and accordingly provided for Rs. 50 million for the current quarter  and the profit after deferred taxation and the extraordinary income is  Rs. 543.80 million.

7.Progress on Cement Plant at Maharashtra

The construction work on the new cement plant at Chandrapur, Maharashtra has been completed and the plant is under trial operations. It is expected to commence commercial production soon.

8.Outlook for the current year

The growth in demand for cement during the financial year 2001-02 have been very good and for the first  time the industry has produced and dispatched more than hundred million tonnes of cement, 102.4 million tonnes. The growth in demand of cement in the domestic market was about 10% at around 100 million tonnes. It is expected that the growth in demand will further accelerate during this year as demand for housing and construction of new roads are progressing well.