How were the quarterly numbers of Ramco Cements for Q3?

Ramco Cements reported 15.5% growth in sales at Rs.1,553 crore. Sales were also higher by 3.3% on sequential basis. Ramco Cements still has an outstanding penalty imposed of Rs.259cr by the Competition Commission of India. However, the company is fairly confident of coming out clean. Due to lower profits in the quarter, the debt service coverage or DSCR and the interest coverage ratios ICR for the quarter fell sharply adding to solvency risk.

Net profit for the Dec-21 quarter was lower by -63.42% at Rs.75.62 crore on higher revenues getting sharply offset by a spike in raw material, power, fuel and transport costs. It was cost spikes across the board as it was not only higher prices of coking coal but also of higher power costs, coal shortage and a spike in transport and freight charges due to supply chain constraints and due to higher fuel costs.

In fact, the power and fuel costs more than doubled on a yoy basis due to the power and coal shortage at similar volumes. The sharp fall in profits over the Sep-21 quarter was due to an exceptional deferred tax credit in the Sep-21 quarter, so it is an exceptional item. Net margins tapered from 15.38% in the Dec-20 quarter to 4.87% in the Dec-21 quarter. On a sequential lower, the fall in margins was much sharper.