Seasonal slack in demand and higher expenses affected Madras Cement’s top and bottomline during the June quarter. It was also found out that FIIs have been taking an interest in the company by hiking their stake
Madras Cements Ltd has posted a net profit of Rs68.85 crore for the June quarter compared with Rs123 crore same quarter last year, due to higher expenses and seasonal slack in demand due to monsoons. For the quarter to end-June, the cement producer’s total revenues declined marginally to Rs989 crore from Rs992.55 crore a year ago period.
Total expenses, including depreciation, during the first quarter stood at Rs839.70 crore, 10.98% higher than the Rs756.20 crore recorded in the same period last year. Other expenditures include, Rs7.23 crore towards corporate social responsibility activities, out of which Rs6 crore has been donated to Raja Charity Trust, a public charitable trust for establishing an engineering college.
According to the Moneylife database, the company is quoting at a market capitalisation of 5.32 times operating profit and an impressive 15% return on net worth.
In compliance of an interim order passed by the Competition Appellate Tribunal (CAT), the company has deposited Rs25.86 crore, being 10% of the penalty levied by the Competition Commission of India (CCI) for alleged cartelisation. Pending final judgement, no provision has been considered necessary, according to the company.
Madras Cements has seen foreign institutional investors (FIIs) taking considerable interest in the company. The FIIs, as on 30 June 2013, hold 17.96% of the company’s share outstanding, up from 5.76% in December 2012. Meanwhile, the DIIs hold more or less the same amount, 17.56%, but lesser than the 23.69% stake it had in December 2012. The promoters’ shareholding remains at 42.32% same throughout from December 2012 to June 2013.
Moneylife had earlier covered this stock in its Street Beat section and the same can be accessed here (Madras Cements: Solid foundation). It had recommended the stock at Rs150.70.
Madras Cements closed Monday 3.1% down ar Rs169.5 on the BSE, while the benchmark, Sensex ended marginally down at 19,593.
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