The quarter ended December 2009 has seen UltraTech?s profits at Rs196 crore declined 18% over the same period of the previous year and 22% over the previous quarter of the same year. Higher than expected decline in realisations of about 9.8% was one of the causes. The operating profit per tonne of cement produced fell from Rs 943 per tonne to Rs 748 per tonne.However, its net sales during the period stood at Rs 1,652 crore, up 1.28% as compared to Rs 1,631 crore in third quarter of financial year 2008-09. UltraTech produced 4.40 million tonne of cement in said period, registering a growth of 10% over the against 3.98 million tonne in the same period of the previous year. Domestic sales volume stood at 4.34 million tonnes a growth grew 12% over the previous year. Realisations in the Southern markets were impacted the most as they were down by 23% in the third quarter as demand there grew by 9% and capacity grew by 27%. About 21 mt of capacity was added in southern India over a the past nine months, says the management. Analysts note that the profit decline could have been worse had the company not actively resorted to cost control measures. Operating expenses were lower by 6% than the previous year. The total operating expenses for the company dropped from Rs 2,636 per tonne for the previous year to Rs 2,472 per tonne in the current quarter in reckoning. Prime amongst them is almost halving of power costs which fell from Rs 1,154 per tonne for the quarter ended December 2008 to Rs 695 per tonne in the current quarter. Even the employee cost fell from Rs 139 per tonne in the previous year to Rs 121 per tonne in the current quarter. Only raw material costs grew substantially from Rs 382 per tonne to Rs 510 per tonne in the current quarter under reckoning. The cost control helped in the times of lower realisations, the December 2009 also witnessed a drop in clinker export realisations by about 40-42% due to reduced off-take in the West Asia due to slowdown. Overall, variable cost dropped by 8% thanks to the cost control measures. Analysts expect pricing pressure to continue ahead and the ability of the management to control costs will be critical.