(Reuters) – India’s Dalmia Bharat signalled optimism in cement demand as well as prices and promised better quarters ahead on Tuesday, after its third-quarter profit nosedived.
“Cement demand growth in Q3 fell short of our earlier expectations… With demand now gaining traction and prices showing signs of optimism, we are confident about a stronger performance in the upcoming quarters,” the company’s finance chief Dharmender Tuteja said in a statement.
Cement prices bottomed out in October and kept on improving all the way up to December, Centrum analysts said in a note dated Jan. 10, as price hikes introduced by makers were absorbed after earlier such attempts were rolled back.
“Initial signs of demand and pricing recovery are visible as December saw both better demand and pricing. We believe this pricing growth is sustainable…,” Centrum analysts said.
Consolidated net profit for the October-December period slumped 77% on-year to 610 million rupees ($7.05 million) and revenue fell 12% to 31.81 billion rupees.
The declines were exacerbated by price drops during the quarter in the south and east regions – markets core to India’s fourth-largest cement maker. The pan-India average cement price for the reported quarter was 11% lower on-year, data from brokerages Nomura and Ambit showed.
Additionally, the company’s sales volumes fell 2% on-year owing to soft demand, while analysts had expected volumes to grow between 4% to 4.8%, estimates from three brokerages showed.
($1 = 86.5680 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Janane Venkatraman)
