InvestorQ : Do you see the stock of Heidelberg Cement gaining ground after the Sep-20 results?
vaishnavi mhatre made post

Do you see the stock of Heidelberg Cement gaining ground after the Sep-20 results?

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vidhya Laxmi answered.
1 month ago
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The new version of Mangalam Cements, Heidelberg Cements, reported a small fall of 1.61% in sales revenues for the Sep-20 quarter at Rs.514 crore due to muted demand in some quarters. For the quarter, the operating profit was up 175 bps at Rs.97.85 crore while bottom line stood at Rs.62.40 crore.

In terms of the margin impact, the OPM expanded by 60 basis points or 0.60% to 19.05% while the net profit margins for the quarter was down 101 bps at 12.15%. This was largely on account of the lower sales base during the quarter with cement making an effort at recovery post COVID tepidness.

Sequentially, the company has seen a sharp recovery as construction demand from the infrastructure sector has picked up sharply. The working capital cycle was favorable in the quarter and that was reflected in the improved net cash from operations.

For a cement company, what really matters is the pick-up in volumes. On a sequential basis, the volume picked up a whopping 29% at 1,108 KT or kilo tonnes, a signal of things getting back to normal. Infrastructure has been driving cement demand. However, the stock action would be more on diversified plays like Ultratech so be a tad cautious.

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