Shares of Sagar Cements Ltd rose more than 6% on May 11 after the company reported a profit for the March quarter, compared with a year earlier loss.

At 10 am, the stock was trading at Rs 213 on the BSE, up 5% from its previous close, while India’s benchmark Sensex was down 0.03% at 61,920.

The company posted a net profit of Rs 98 crore in the March quarter, compared with a net loss of Rs 19.15 crore last year. Net consolidated gross revenue was Rs 802.58 crore, up 59% to Rs 5-6 crore.

“We ended FY23 positively with strong volume growth and moderating raw material prices. Also, the year marked the milestone of our 10 MnT production capacity following the acquisition of Andhra Cements. This acquisition helps us further strengthen our position in our core markets and helps us better cost-effectively serve our customers,” said Sreekanth Reddy, joint managing director of the company.

Sales in the quarter rose 20% to 1.35 million tonnes from 1.13 tonnes last year. Operating EBITDA fell 36% to Rs 8.86 crore.

As on March 31, 2023, the company has net assets of Rs 1,688.93 crore and net debt of Rs 1,261.64 crore.

“Good demand from infrastructure projects and the IHB sector helped maintain high volumes. Volumes would have been higher were it not for labour shortages due to the festive season and unseasonal rains at the end of the fourth quarter. The prices of inputs such as coal and petroleum coke were moderated during “this quarter. A favourable pricing environment offsets the dual benefits of high operating leverage and lower raw material prices. Our efforts in cost rationalisation and efficiency optimisation have helped us limit the overall impact of the soft pricing environment,” Reddy said.

Some key initiatives we have taken in recent years to contain costs include the construction of rail spurs, captive power plants and waste heat recovery systems. We hope to see the full benefits of these products in the coming years,” added Reddy.