The India Cements Ltd, a cement company, plans to raise the price of its types of cement by Rs 55 per bag over the next month in three phases to offset rising variable expenses, particularly the cost of coal, which has risen from $60 per tonne to $300 per tonne. After posting losses in Q4FY22, the firm is also pushing forward with a plan to sell a piece of its surplus land and raise funds to reduce its debts this year.
India Cements intends to raise the price of cement each bag by Rs 20 beginning June 1, another Rs 15 beginning June 15, and another Rs 20 beginning July 1. "This should help cover our variable costs, which have risen dramatically in recent years."
"I'm not sure if other cement makers would follow suit," N Srinivasan, vice-chairman and MD of India Cements, said, adding that he cannot recall the last time the business raised cement prices so much.
"In the region, 40 different brands offer cement at prices ranging from Rs 320 to Rs 400 per bag." "Our items are premium, and we have always priced them accordingly, in the Rs 360 and above level," he explained.
The firm posted a loss of Rs 23.7 crore in the fourth quarter of FY22, compared to a net profit of Rs 71.6 crore in the same quarter last year. Revenue from operations was Rs 1,391.99 crore, a decrease from Rs 1,449.62 crore in Q4FY21. Net profit for the entire fiscal year (FY22) fell drastically to Rs 38.9 crore, compared to Rs 222 crore in FY21. It ascribed this to decreased volumes (down 11%) and a 33 percent rise in variable manufacturing costs.
Srinivasan stated that the corporation has around 26,000 acres of property, most of which are located in rural regions, with some properties in the city and near to the city. "We organized an internal organization to sell part of the extra land to pay off debts and invest in plant upgrades."
"However, this is not a distressed sale, and we will wait until the proper opportunity," he explained. The firm owes roughly Rs 3,000 crore in loans, which it has been repaying and prepaying to banks every month. "We paid Rs 551 crore last year and will pay Rs 500 crore this year. "We will only sell land to the amount necessary to satisfy these circumstances," he stated.