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  • FEBRUARY 5, 2001

Madras Cement: Operating margins zoom

Madras Cements has reported a sharp rise in net profits for the quarter ended 31st December 2000. The company has benefited from a jump in operating margins.

(Rs m)3QFY003QFY01Change
Sales 1,239 1,457 17.6%
Other Income 5 2 -57.4%
Expenditure 961 1,029 7.1%
Operating Profit (EBDIT) 278 428 54.0%
Operating Profit Margin (%)22.4%29.4% 
Interest 158 173 9.3%
Depreciation 116 144 23.9%
Profit before Tax 9 1131218.6%
Other Adjustments - -  
Tax - -  
Profit after Tax/(Loss) 9 113 1218.6%
Net profit margin (%)0.7%7.8% 
No. of Shares (eoy) (m) 1.2 1.2  
Diluted Earnings per share#* 28.5 375.8 1218.6%
*(annualised)   

The cut in production effected by the cement companies in December seems to have had a telling impact on not only Madras Cement but other cement companies as well. However, what needs to be looked into is whether such a rise in cement prices is sustainable or not.

Madras Cement currently trades at Rs 5,565, implying a P/e multiple of 14.8x.

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