Heidelberg Cement Q3 Results Review - Parent Company Evaluating Plans For Exit: Nirmal Bang

Nirmal Bang Report

Heidelberg Cement India Ltd.'s reported revenue of Rs 6.1billion, up 12.4% YoY while cement volume stood at 1.2 metric tonne, up 10.3% YoY. Cement realisation/tonne stood at Rs 5,026, indicating a YoY uptick of 1.9%. The company reported absolute Ebitda of Rs 655 million, up 76.5% YoY. Total operating cost/tonne stood at Rs 4,484, down 2.4% YoY, primarily driven by a significant 16.7% YoY reduction in power and fuel costs due to lower coal and pet coke prices. However, there was a 16.7% YoY increase in employee costs. Ebitda/tonne came in at Rs 542, up 60% YoY. Profit after tax for Q3 FY24 stood at Rs 315 million, up 464% YoY on a low base.

Heidelberg Cement had earlier guided for a capex of Rs 700 million for FY24, with Rs 400 million for maintenance and remaining for debottlenecking of the plant in Gujarat. The Board had also approved debottlenecking of the clinker plant at Narsingarh at an investment of Rs 700 million.

Heidelberg Materials, the parent company of Heidelberg Cements India, is exploring the possibility of exiting its operations in India. The exit strategy for Heidelberg's presence in India involves undergoing a comprehensive bidding process. Several prominent groups have expressed interest in acquiring Heidelberg’s cement business in India.

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