Heidelberg Cement India’s Bottomline Plunges on YoY Basis

Heidelberg Cement India, earlier known as Mysore Cements Limited has announced its results for the fourth quarter and year ending December 31, 2013 (The company uses calendar year as financial year). At present, Heidelberg Cement India has its presence in western, central and southern India. 

Annual Performance

The operating revenue of the company stood at Rs 1393.2 crore during CY13 against Rs 1111.2 crore  of the previous year with growth of 25.4 %, while in Q4CY13 it has recorded a 36.3 % growth as compared with Q4CY12 despite real estate and infrastructure sectors performing badly. 

The EBITDA of the company has gone up by 35 % during CY13 to Rs 114.83 crore against Rs 84.52 crore of the previous year 2012. 

On the operational front, cost challenges continued to remain a cause of concern especially power, freight and raw material. The cost of material, which is 27 % of the total operating revenue, has sharply increased by 20 % over the year to Rs 376.7 crore against Rs 313.3 crore of CY12. Power and fuel expenses, which is 28 % of the operating revenue, has also increased by 27 % to Rs 388.7 crore against Rs 306.4 crore of CY12. Due to rise in the diesel price, freight rates has shot up by 37 % to Rs 209.3 crore against Rs 152.8 crore of previous year. 

On bottomline front, the company has recorded a decrease of 232 % during the year due to an increase in depreciation and finance costs. The setting up of new plants in Damoh and Jhansi have added to the depreciation, increasing by 208 % to Rs 97 core against Rs 31.49 crore of CY12.

The company had taken a loan for the expansion of the new plants from the bank at of 10.4 %, resulting  in a sharp increase in finance cost to Rs 105.8 crore against Rs 10.53 crore of CY12 with a growth of 905 %. Heidelberg Cement India has issued debenture of Rs 370 to its holding company Heidelberg Cement AG of Germany to repay the bank loan. 

Quarterly Performance: Q4CY13 to Q4CY12

The company has done comparatively better (in term of sales only) in this quarter, as its operating income is showing a growth of 36.34 % to Rs 35.85 crore against Rs 26.29 crore of corresponding quarter of the previous year. The EBITDA stood at Rs 2.7 crore in Q4CY13 as compared with Rs .03 crore of Q4CY12. During the quarter raw materials have seen a steep price, and the expenditure on it has gone up by 58.17 %, while depreciation and power and fuel have increased by 224 %  and 27.05 % respectively. Increase in expenditure is more in comparison to revenue.

Currently its share price is trading at Rs 34.35. In the last one year the company has given a negative return of 20.94 %. We don’t see much improvement in its share price in the near future due to gloomy economic scenario, tight monetary policy, high interest on home loan, and bad performance of real estate, infrastructure and housing development, which are key driving forces for the industry.