CK Birla Group flagship Orient Cement posts volume growth of 40% for quarter; progress in stabilization of new Greenfield plant



New Delhi, May 04, 2016 – Orient Cement Limited, a part of the USD 1.6 billion diversified CK Birla Group, announced its financial results for the quarter and year ended March 31, 2016. The company has reported volume growth 40% over the corresponding quarter last year on account of increasing volumes from both old operations and the newly commissioned plant at Chittapur in Gulbarga district, Karnataka. For the full financial year, the company has posted an 8.3% increase in sales volumes.

Financials – Q4FY16

  • Net sales at Rs. 447.3 crores as compared to Rs. 387.4 crores in the corresponding period of the previous year
  • EBITDA is Rs. 64.7 crores (versus Rs. 102.8 crores in Q4FY15) and net profit (PAT) is Rs. 19.4 crores (versus Rs. 85.5 crores in Q4FY15), impacted by the finance costs and depreciation that is now booked on the new Greenfield plant in Karnataka


Financials – FY16

  • Net sales at Rs. 1501.8 crores compared to Rs. 1535.3 crores in the previous year despite higher volumes
  • EBITDA is Rs. 190.9 crores (versus Rs. 312.8 crores in FY15) and net profit (PAT) is Rs. 62.2 crores (versus Rs. 194.8 crores in FY15)


The new capacity has made good progress in terms of stabilization over the last two quarters and is giving the company access to new markets in Karnataka besides strengthening its position in Telangana, Andhra Pradesh and Maharashtra. As the new capacity stabilizes, it is expected to contribute to the company’s rapid growth and market reach in the quarters ahead.

Deepak Khetrapal, Managing Director and Chief Executive Officer, Orient Cement said, The quarter ended March 31 has seen a good recovery in volumes across our core areas, especially AP and Telangana, which is reflected in our utilization levels this quarter. The old operations achieved a capacity utilization of 86% in Q4FY16 while the new plant at Chittapur is now generating a positive EBITDA.

However the low price environment in our core markets continues to persist, with prices dropping lower in AP/Telangana in the recent few weeks. On average, cement net sale realisations have been 3% lower than the last quarter and more than 15% lower than the same period last year.

Amidst these difficult external developments, we continue to focus on our operating efficiencies and costs in our existing operations continue to get better, a result of our “best in class” operating practices. The costs related to the commissioning/stabilization of our new integrated unit at Chittapur have affected our operating and net profit numbers in the last two quarters. However, we are already seeing some mitigation from the positive impact of higher volumes from this unit and expect higher volumes and increased operating efficiencies to compensate further in the quarters ahead.

The Company expects demand to pick up in a few quarters on the back of housing and construction activity, especially so if predictions of a favourable monsoon season are met.  Various government projects for low cost housing, roads, irrigation, metros as well as new initiatives like “Smart Cities” & “Swachh Bharat” are still expected to result in improved demand for cement in Telangana, AP and Maharashtra.  The construction of the new capital of AP at Amravathi is also expected to contribute to higher cement appetite in Southern India.


About the CK Birla Group

The CK Birla Group is a US$1.6 billion diversified conglomerate that over the years has developed a strong footprint in manufacturing, engineering, technology, hospitals and education. With over 20,000 employees, 27 manufacturing facilities and a customer base that includes some of the world’s best-known companies, CK Birla Group’s businesses are present across five continents.

The Group’s companies operate in the sectors of Technology and Automotive, Home and Building, and Healthcare and Education.  Companies in the Technology and Automotive cluster comprise AVTEC, Birlasoft, GMMCO, NEI and Neosym. These companies are leaders in manufacturing products for the automotive and related industries globally. The Group’s manufacturing capability is further strengthened through its Home and Building solutions companies: HIL, Orient Cement, Orient Electric and Orient Paper. These companies manufacture everyday usage products like paper, fans, kitchen and home appliances, building materials like cement, low weight blocks and panels, pipes and fibre roofing sheets.

CK Birla Group also has two hospitals in Kolkata: CMRI, a multi-specialty hospital with and BM Birla Heart Research Centre, the first NABH-accredited research and treatment centre for heart disease. The CK Birla Group has a presence in the Education sector through the Birla Institute of Technology, Mesra, Ranchi, Modern High School for Girls, Kolkata and Rukmani Birla Modern High School, Jaipur.

The CK Birla Group is deeply committed to creating sustainable positive impact. The Group allocates significant resources to philanthropic initiatives; including those in science and technology, art and culture, and heritage preservation. The Group also works to improve the livelihoods of rural and underprivileged communities.

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About Orient Cement

Orient Cement Limited is part of the USD 1.6 billion diversified CK Birla Group. Earlier a division of the multi-product, multi-unit Orient Paper and Industries Limited, Orient Cement was de-merged with effect from April 1st, 2012 and became a public limited company. The company produces 5 MTPA cement annually from its two plants in Andhra Pradesh and Maharashtra. Its first Greenfield project at Devapur in Adilabad District, Andhra Pradesh began cement production in the year 1982. In the year 1997, a split-grinding unit (also a Greenfield project) at Nashirabad, in Jalgaon, Maharashtra was added. With the new plant at Chittarpur in Gulbarga district, Karnataka having been commissioned in September 2015, Orient Cement Limited now has a total installed capacity of 8 million tons.

Orient Cement is certified for both ISO 9001:2008, and ISO 14001:2004 and also OHSAS 18001:2007 from Det Norske Veritas, Netherlands. The company sells cement under its popular brand Birla A1 Premium Cement in Maharashtra, Telangana, Andhra Pradesh, Karnataka and parts of Tamil Nadu, Chattisgarh, Gujarat and MP.


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