India`s Ramco Cements profit falls 18% as expenses surge
Ramco Cements reported an 18% fall in quarterly profit on Tuesday as a rise in fuel, power and other input costs outpaced demand at the Indian cement maker.
Net profit after tax for Chennai, Tamil Nadu-based Ramco fell to 673.9 million rupees ($8.15 million) for the third quarter ended Dec. 31, from 825.7 million rupees, a year earlier, according to an exchange filing.
Total expenses climbed 33% to 19.21 billion rupees, led by an increase in power and fuel costs, while the company posted a 29% growth in sale of products.
Ramco sold products worth 19.91 billion rupees in the reported quarter.
Higher global petcoke and coal prices, as well as power and fuel expenses that had crimped margins for cement producers in the second quarter had a lingering impact on their bottomline for the reported quarter as well.
Ramco's rival and India's top cement maker UltraTech Cement also last month reported a 38% slump in profit for the December quarter due to a surge in expenses.
Costs of petcoke and coal have since eased from their highs and will likely moderate further this quarter and beyond, setting cement producers up for a better 2023 after a lacklustre 2022, analysts have said.
Earlier this month the Indian government unveiled a bigger budget of 39.45 trillion rupees ($529.7 billion) for the coming fiscal year, stepping up investments on highways and affordable housing.
Ramco, however, still sees fierce competition as rivals increase capacity, and after conglomerate Adani Group raised stakes by buying Ambuja Cements and ACC, analysts have said.
Shares in Ramco, which has shed around 30% last year, climbed as much as 1.9% on Tuesday.
($1 = 82.7190 Indian rupees)
