Prism Cement Suffers Losses In Q1FY14
DSIJ Intelligence / 26 Jul 2013
The company has witnessed a 0.3% decline in its revenues on a yearly basis to Rs 1131 crore in Q1FY14 and a loss of Rs 47.87 crore in the quarter.
Prism Cement is one of the leading integrated Building Material companies. It caters mainly to the markets of Uttar Pradesh, Bihar and Madhya Pradesh. The company has witnessed a 0.3% decline in its revenues on a yearly basis to Rs 1131 crore in Q1FY14 and a loss of Rs 47.87 crore in the quarter. It had posted losses in the last two fiscals and the loss seems to be on the rise in the current fiscal.
The 3 main divisions of the company are Cement, TBK (Tile Bath Kitchen) and Ready-mix Concrete. The Cement segment contributes 42% while TBK contributes 34% and Ready-mix Concrete contributes the rest of the 24% to Prism’s revenues. While TBK and Ready-mix have failed to achieve growth in the quarter, the Cement segment has achieved 5% growth and has reported revenues of Rs 482 crore.
The total sales volumes of the cement division have improved by 16.21% on a yearly basis (YoY) to 12.4 lakh tonnes. However, realisations for cement have declined by 14.24% to Rs 9121.85 per tonne in Q1FY14.
EBITDA margins of the company have declined to 3.07% in Q1FY14 from 8.32% of Q1FY13. Overall, the company saw a steep drop in the EBITDA per tonne and declined by 68% to stand at Rs 279.67 in Q1FY14 against Rs 884.72 in Q1FY13. This was primarily because the company has been affected due to high inflation-led scenario which has increased the input cost such as freight and fuel costs.
Nevertheless, the company is expanding its brown-field cost saving project at Andhra Pradesh. Its project of coal classifier plant which would improve the coal fineness and in turn the calorific value of coal. Mine development activities for the cement plant are also under implementation at Kurnool District, Andhra Pradesh and the GAIL pipeline are in progress which will further help it improve efficiency.
The stock of Prism Cement is trading at Rs 30.25 and since the company is a loss making one, it does not have a PE. However, looking at the bad performance of the company, we advise readers to stay away from the scrip.
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