Star Cement posted a subdued set of Q4 earnings. Operating profit was down around 16 percent and margins have contracted to come in at 17 percent this quarter.
On sales volume, Sanjay Gupta, CEO of Star Cement said, “In FY21, the volumes have been muted largely because of few developments which have taken place. In the north-east, we faced two major bridge damages from November to January, so it took a lot of time in terms of repairing those bridges and resuming our supply of clinker. Largely, our clinker plants are based out of Meghalaya so that impacted the volumes. The grinding plant at Siliguri actually took time because of the on-going pandemic and we could only start it on January 16th. So, largely in the initial 1-2 months we had teething problems.”
He added, “This quarter, as well as the number for the full year actually reflected a lot of one-offs which we had never faced in our entire history, so that has impacted volumes as well as margins.”
On Q1 volumes, Gupta said, “Largely all those bottle necks have already been resolved. There is a new bridge which has been operational so most of the logistic issues got resolved. From April onwards, most of the things have been resolved, the freights have normalised, so hopefully we will be doing at least a double-digit kind of volume growth in Q1.”
On price trends, he said, “Pricing in Q4 was stable. In Q1, the prices are being maintained. There is a small decline of Rs 5-10 in the eastern market, but north-east prices are actually stable.”
“We are pretty hopeful that east in terms of demand will do much better in FY22; and prices look stable from here on.”
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