India Cements on a high

India Cements had declared its Q1FY17 performance yesterday after which it hit a new 52-week high at Rs.130.80 and today, the same euphoria on the counter continued – the stock hit another new high at Rs.131.85. It continues to remain firmly at Rs.130 levels, up around 4%.

The market is enthused with the company’s Q1FY17 performance, which operational is not really the best vis-à-vis the others who have reported superlative growth numbers for the quarter. The company reported a 1.5% (YoY) drop in net sales at Rs.1202 crore. Costs were down 2.6%, not on account of lower raw material or power& fuel costs but inventory and lower employee costs.

EBITDA was up by a marginal 2% at Rs.204 crore and margins improved from 16% to 17%. Interest costs reduced 14% and that helped boost the net profit to Rs.44 crore, up 16%. Also in previous Q1, the company had an exceptional expense of Rs.11 crore, which pulled down the net profit. Thus here, the lower base effect helped better current Q1 result.

There is a general feeling of optimism around all cement stocks at the moment and that explains why India Cements too is on a high.