Madras Cements' woes eased on higher realization
The stock price of Madras Cements is hovering not too far from its recent 52-week high. This comes at a time when cement prices in the company's key markets such as Chennai have firmed up over the past few weeks, considering it is the peak construction season. The company is a leading cement manufacturer in south India.
Apart from that, the production discipline that has been followed by players operating in the southern region has also helped keep prices firm. For instance, total cement despatches in the southern region grew barely 0.6 per cent year-on-year during the period April-January of the current fiscal, which was much slower than the all-India growth in despatches during the period.
As a result, cement prices in Chennai are currently at Rs 290-300 a bag, a rise of nearly Rs 10 per bag since the start of the calendar year, according to analysts tracking the sector. Investors were also bullish on other leading players in this region like India Cements, and its stock is also fairly close to its recent 52-week high.
Earlier, Madras Cements' operating profit margin improved 240 basis points to 28.3 per cent in the third quarter of FY12, while net sales grew 27.8 per cent year-on-year to Rs 744.1 crore. In its key cement division, realisations improved an estimated 12.6 per cent on a per tonne basis in the quarter under review.