NCL Industries - Resumption of growth?

Hi Nikhil @NikhilJain ,

Could you please tell me where did you get the news about 22 days of quarterly maintenance shutdown from?


Hey Haresh,

I have read about the maintenance in an interview transcript somewhere. I’ll try and find it out when I’m free.

BTW, the maintenance is not a quarterly event

Yes I do know that it is not a quarterly event :smile: Maybe should have framed the question properly :smile:

I think the interview you are referring to was after Q1 results where the mgmt. said that Q1 numbers were impacted due to maintenance activities carried out in Q1.

Please do update if you find the source where it says that maintenance was carried out in Q2.


Check this out -

This interview happened in August which falls in second quarter. The MD mentions that they had taken up the repairs during the quarter. But they may have managed around it, so that the stoppages didn’t affect a lot.

Yeah he did mention about maintenance works but he was referring to Q1 and not Q2. That was in relation Q1. That is how I would interpret and that is how I guess the channel had interpreted as well. Also he didn’t mention 22 days of shutdown.


Please re-read. He is talking about the current quarter. Also, the 22 days were mentioned on mmb.

I heard the interview. He didn’t categorically say current quarter at any point of time. Also he talked about repairs etc twice during the interview. 2nd time while answering the question on capacity utilisation in the 1st quarter and the capacity utilsation going ahead. He said that capacity utilsation was impacted by stoppages 'coz of repairs. Also capacity utilisation was 62% in 1st quarter. I would therefore read it as stoppages were there in the 1st quarter. I normally discount mmb and don’t take it seriously. Anyways another few days and we would know if there were any stoppages for plant maintenance. Fingers crossed.


NCL numbers are out.

Cursory glance tells me that -
YOY in Crs.
Sales- 187 to 247,
OP- 11 to 26,
NP- 1.9 to 15.14 &
EPS- 0.55 to 4.12

However I was expecting better QOQ numbers.
QOQ in Crs.
Sales- 232 to 247,
OP- 33 to 26,
NP- 20 to 15.14 &
EPS- 5.54 to 4.12

Cement Division Nos. QOQ. in Crs.
Sales- 199.3 to 207.7,
PBIT- 29 to 18,

I was expecting better QOQ numbers in the Cement division. OP Expns. have risen and have had impact. I was expecting better capacity utilisation in this quarter or maybe I read it wrong and what @NikhilJain was stating above is right that there may have been plant closures for maintenance activity. We may know after mgmt. speak.

Any initial views @varadharajanr and others who are tracking?


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I think we still are not sure if there was any shutdown in Q2. We need to wait for the confirmation. Atleast to me it was not enitirely clear from the mgmt. interview as to when was the shutdown. But if that might be the case then this would be good set of nos.

In the meanwhile: The Board approved the proposal for issue of Secured Non Convertible Redeemable Debentures (NCDs) for an amount up to Rs. 320 Crores on a private placement basis to be deployed for the following:

(i) Repayment of the dues for the existing Term Lenders.
(ii) to finance augmentation of the capacity of Cement & Boards Divisions.

NCL #s looked decent on the first look. I am waiting for MD’s comments on plant maintenance shutdown. My understanding is that the maintenance happened in Q1. On the contrary, if it had happened in Q2, these are excellent #s. Need clarity here.

  1. Boards division has performed very nicely. EBIT : 7cr vs 5cr last quarter. This is operating at ~35% EBITDA margins. This is a positive development though minor.

  2. Raising 320cr through NCDs could be looked upon as positive depending on the borrowing cost. Their current borrowing cost stands @ 12%.

  3. I believe the utilization levels were fairly decent this quarter(assuming plant maintenance happened this quarter). If the company was going through sub-60% levels for the 2nd quarter, the management wouldn’t have confidently come out asking for capital for expansion.

Waiting for MD’s comments on maintenance shutdown.

Ravi S
Disc - Invested from lower levels.


My understanding was also the same that shutdown was in Q1 and hence was expecting betr nos. from cement biz.

Anyways lets wait for the mgmt. commentary.

There seems to be confusion between two statements in the moneycontrol interview link. The summary makes the following statement

Ravi expects the second half of the year to be better with nearly 75 percent of capacity utilisation. The company had repair works that impacted capacity utilisation in the quarter gone by.

Read more at:

Where as the Q&A this was said

Latha: You were telling me that you expect cement demand to grow, how much volume of cement you will be able to sell? A: My case more or less I am utilising the capacity but in between we have stopped for a while for repairs and all that. Last two years was a bad period and because of our financial problems we have not taken up the repairs. So, in this quarter, we have stopped. Otherwise, whatever we produce we are able to sell.

I take the Q&A answered by Ravi as final. It mentions that repairs was taken in Q2.

Recent results of NCL Industries and Keerthi Industries were not that good. The reason is that cement demand has gone down in South as well in past 3-4 months.

The sale of cement in general has come down in the last three months.
There is also some volatility in the production and dispatches.
Consequently, the prices have headed south to hover around ₹250-280
depending on the regional markets.

The article is dated 30th October. Today, 17 days after the article is published, the prices have only came down somewhat for most south cement companies.

Nagarjuna cement is still being sold at Rs 325/bag by online retailer in Hyderabad. In October it was being sold for Rs. 340/bag. The realizations are definitely lower than before.

So one shall be watchful but no need to panic yet. Things may improve if historical trends hold true and demand improves post Diwali till June.

Disclosure : - I hold NCL

NCL Homes (Pvt.) Limited, also a NCL group company, looks after construction of residential complexes & townships.

It has completed a number of projects in the twin cities of Hyderabad & Secunderabad in India & is expanding its activity in the Indian state of Karnataka.
I feel being a group company it should fulfill its demand for cement from NCL industries itself. So we already are having a customer within home.

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Hi Sri,

Can you please answer following question about NCL homes?

Q.1 How many projects are underway in current quarter?

Q.2 What is the total demand from all those projects?

Q.3 What price are the bags being sold at, to NCL homes by NCL industries?

Q.4 How much cement was bought by NCL homes in last two quarters?

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I will try to find out.

More pledge released

Checking the price online shows this data. One need to track this only biweekly basis to see the trend. Since this is the first time this site is checked lets take the current rate as base rate

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Few pointers from my talk with the CS of NCL Industries

  1. Last quarter capacity utilisation was 72%
  2. Demand is picking up and they are having good traction
  3. NCL Homes is a company owned by one of the directors of the company.
  4. As such no business pact with NCL homes
  5. NCL Homes can buy cement from any company it wants to.
  6. NCDs are likely to be issued soon.
    7.Capacity expansion is needed
  7. Last 3 years company wasn’t doing well but now things have improved and performance is going to get better.

He was resistant to divulge any info for current quarter.

Sri Krishna Bhutra