UltraTech Cement doubles standalone profit in April-June

Earnings before interest, tax, depreciation and amortisation (Ebitda) grew 59% to Rs 2,704 crore, while the margins for the quarter stood at 28% compared to 20% in the corresponding quarter. The firm indicated that the industry Q1 volume growth was muted following a seven-month rally.

UltraTech’s consolidated net profit grew 91% year-on-year (YoY) to Rs 1,208.03 crore. Revenue from operations increased by 14.35% to Rs 10,177.63 crore. Volume growth, however, remained muted at 2% with the volumes for Q1FY20 at 17.86 million tonne (mt). Of this, domestic volumes stood at 17.26 mt, having seen a growth of 3% compared to the same period last year while the ‘exports and other’ segment saw a degrowth of 7% to 0.6 mt.

The firm’s management is believed to have told analysts that they expect infrastructure growth will come back with gradual stabilisation in the economy. Roughly Rs 2,000 crore will be spent on capex in this fiscal year on big ongoing projects, the management told analysts on Thursday.

UltraTech saw improvement in operational efficiencies.The firm’s raw materials cost declined 2% year-on-year (y-o-y) to Rs 489/tonne while its logistics cost reduced by 5% y-o-y to Rs 1,140/tonne. The energy cost also saw a decline of 2% y-o-y to Rs 1,011/tonne.

Going forward, the firm is looking to commission and ramp up the Bara grinding unit, operationalise the Dalla Super clinker plant, and invest in waste heat recovery systems and other cost savings capex, according to its presentation.

The company also pointed out that with major overhauling of the plants and completion of quality upgradation, UltraTech Nathdwara Cement has been fully integrated with UltraTech systems and processes. The plants have achieved optimal efficiencies.

The firm also indicated that its consolidated net-debt has shrunk over Rs 1,000 crore in Q1FY20 to Rs 18,565 crore, compared to the previous quarter. Shares of UltraTech ended Thursday’s session down 2.57% at Rs 4,231.70 on BSE.