• JUNE 6, 2001

Madras Cement: OPM takes a knock

From the limited information on results that is available, it seems that Madras Cements has reported a decline in operating margins for the year ended 31st March 2001. The company has posted a nearly 20% growth in sales.

(Rs m) FY00 FY01 Change
Net Sales 5,162 6,183 19.8%
Other Income 29 25 -14.1%
Expenditure 3,661 4,426 20.9%
Operating Profit (EBDIT) 1,501 1,757 17.1%
Operating Profit Margin (%) 29.1% 28.4%  
Interest 611 654 7.1%
Depreciation 464 527 13.6%
Profit before Tax 455 600 32.1%
Other Adjustments - -  
Tax 53 116  
Profit after Tax/(Loss) 402 484 20.5%
Net profit margin (%) 7.8% 7.8%  
No. of Shares (eoy) (m) 1.2 1.2  
Diluted Earnings per share#* 332.7 401.0 20.5%

The company has recorded a sharp growth in raw materials consumed. This is probably responsible for the decline in OPM. However, a more accurate picture will emerge only after the company makes available the detailed results.The decline in OPM is likely to surprise many as cement companies have generally posted sharp rises in margins on the back of firm cement prices.

We will be putting up a detailed note once more details are made available.

The stock currently trades at Rs 4,410, implying a P/e ratio 11x based on FY01 earnings.

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