Mangalam Cement Ltd. has delivered a remarkable financial performance in the second quarter, showcasing substantial growth across key metrics. The company's net profit skyrocketed by 509%, reaching ₹201 million compared to ₹33 million in the same period last year.

Financial Highlights

The company's revenue grew to ₹3.94 billion, marking a 9.75% increase from ₹3.59 billion in the corresponding quarter of the previous year. This growth in revenue indicates strong demand for Mangalam Cement's products and effective sales strategies.

Profitability and Operational Efficiency

Mangalam Cement demonstrated significant improvement in its profitability metrics:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a substantial increase of 41.86%, rising to ₹427 million from ₹301 million year-over-year.
• The EBITDA margin expanded by 242 basis points, reaching 10.81% compared to 8.39% in the same quarter last year. This improvement suggests enhanced operational efficiency and better cost management.

Quarterly Performance Trend

Analyzing the company's recent quarterly performance:

• Net Profit: The current quarter's net profit of ₹201 million represents a significant improvement from the previous quarter's ₹169 million, indicating a positive growth trajectory.
• Revenue: While the quarterly revenue of ₹3.94 billion shows a slight decrease from the previous quarter's ₹4.62 billion, it still represents a year-over-year growth.

Outlook

The robust financial results reflect Mangalam Cement's resilience and adaptability in a challenging market environment. The substantial increase in net profit and improved EBITDA margin indicate the company's focus on operational excellence and cost optimization strategies.

As the construction and infrastructure sectors continue to recover, Mangalam Cement appears well-positioned to capitalize on growing demand. However, investors should monitor factors such as raw material costs and industry competition, which could impact future performance.

This strong quarterly performance sets a positive tone for Mangalam Cement, potentially boosting investor confidence in the company's growth prospects for the remainder of the fiscal year.

Mangalam Cement Limited, a prominent player in the Indian cement industry, has recently received an adjudication order from the Additional Commissioner, CGST, Office of Principal Commissioner, Jaipur, regarding violations related to Input Tax Credit (ITC). The order, which pertains to irregularities in ITC claims during the period from July 2018 to November 2019, has significant financial implications for the company.

Key Details of the Adjudication Order

The order confirms that Mangalam Cement wrongly availed irregular Input Tax Credit amounting to ₹56.86 lakh during the specified period. This action was found to be in contravention of multiple sections of the CGST Rules 2017, including Sections 16, 31, 38, 39, 41, and 42, read with Rule 36.

Breakdown of the Financial Impact

1. ITC Recovery: The company is required to repay ₹56.86 lakh (₹28,42,782 each under CGST and SGST).
2. Penalty: An equal amount of ₹56.86 lakh has been imposed as a penalty.
3. Interest: The order also mandates the recovery of interest on the inadmissible ITC amount, although the specific interest amount is not disclosed.

It's worth noting that ITC of ₹34.92 lakh claimed under IGST was dropped from the proceedings, slightly reducing the overall liability.

Company's Response

Mangalam Cement has expressed disagreement with the findings of the tax authorities. The company plans to file an appeal under Section 107 of the CGST Act, 2017, within the stipulated three-month period from the date of receiving the order.

Implications and Next Steps

While the total financial impact of ₹1.14 crore (excluding interest) is significant, it's important to consider this in the context of Mangalam Cement's overall financial position. The company's decision to appeal the order suggests confidence in its stance and a commitment to resolving the issue through proper legal channels.

Investors and stakeholders should monitor the progress of the appeal, as the outcome could have implications for the company's financial statements and cash flow in the coming quarters. It also underscores the importance of robust compliance mechanisms in navigating the complex landscape of Goods and Services Tax (GST) regulations in India.

As the situation develops, Mangalam Cement is expected to provide further updates to the stock exchanges in compliance with SEBI regulations.