MADRAS CEMENT

The company posted a good set of numbers for Q3FY13, much better than its peers – ACC and the rest. It reported a 9% (YoY) rise in net profit at Rs.84 crore on a 22% rise in revenue at Rs.905 crore. This was despite a 24% rise in total expenditure, which rose mainly on account of rise in power and fuel costs. What really helped was the 8% rise in volume growth and more importantly, interest cost was down 15% sequentially. The performance looks better especially considering the fact that there was a 16 day strike in Kerala of cement dealers, which takes care of a quarter of the total cement dispatches of the company.

The company is on most brokerage houses “buy’ radar not just because of the good numbers reflecting operating efficiencies but also because the company is very diligently working on bringing down its debt. It plans to repay debt to the tune of almost Rs.400-500 crore over the next two years of which it has already repaid Rs.150 crore. The company plans to set up a grinding unit at Vizag with a capacity of 1 million tpa at a cost of Rs.250 crore and is expected to be commissioned by June 2014.