Why did the profits of Ramco Cements fall so sharply in Q4FY22?
Answer
Answer
For the fourth quarter ended March 2022, Ramco Cement saw 4.88% higher sales revenues at Rs1,713 crore. FY22 full year revenues were up 13.5% at Rs6,004 crore. In the quarter, Ramco Cements saw growth in volumes although prices came under pressure. The company also has the overhang of the CCI penalty of Rs253 crore, which is currently disputed. Net cash from operations fell -29% in FY22 on account of a sharp spike in inventory costs amid supply chain constraints. Long term debt to working capital was up from 9.11% to 16.73%.
Ramco Cement
Rs in Crore
Mar-22
Mar-21
YOY
Dec-21
QOQ
Total Income (Rs cr)
₹ 1,713.40
₹ 1,633.73
4.88%
₹ 1,552.50
10.36%
Net Profit (Rs cr)
₹ 118.57
₹ 216.16
-45.15%
₹ 75.62
56.80%
Diluted EPS (Rs)
₹ 6.00
₹ 9.00
₹ 3.00
Net Margins
6.92%
13.23%
4.87%
Like most cement companies, Ramco Cements also witnessed a sharp -45.15% fall in net profits at Rs118.57 crore. Operating profit margins compressed yoy from 28% to 18%. Blame it on the power and fuel costs which spiked 88.3% yoy to Rs467 crore. Net margins were 6.92% in Q4FY22 quarter against 13.23% in Q4FY21 and 4.87% in Q3FY22. The board of Ramco Cements has recommended dividend of Rs3 per share. Coverage ratios are sharply lower for the quarter on the profit impact.