Cement major UltraTech Cement is all set to release its fiscal third quarter earnings report today (January 23). According to brokerage firms and analysts, the company is expected to post around 20 per cent drop in profit during the quarter due to lower realization and higher depreciation. UltraTech Cement’s profit after tax during Q3 is estimated at Rs 1,413 crore. Revenue from operations, meanwhile, is projected to record a rise of 2 per cent YoY to Rs 17,075 crore, said Axis Securities.
Volumes, YES Securities said, are expected to grow 9 per cent YoY to 29.76 million tones per annum on a strong demand from institutional players and sustained momentum in the housing sector attributed to the growth in volumes.
Earlier in a regulatory filing on January 13, the company had said, “UltraTech Cement Limited is pleased to invite you for its Earnings Call to be held on Thursday, 23rd January 2025. The call will be initiated with a brief management discussion on the Q3 FY25 performance, followed by an interactive Question & Answer session.”
According to a CNBC TV18 poll, Ultratech Cement is expected to post Q3 profit at Rs 1,295 crore and revenue for the period is estimated at Rs 17,025 crore. EBITDA for the period is projected at Rs 2,782 crore. Per the poll, volumes by the company are expected to grow by 8-10 per cent.
An analysis report by Nuvama stated that the company’s Q3 revenue is expected to decline by 1 per cent YoY to Rs 16,536.6 crore. Further, it maintained that PAT will drop by 29 per cent YoY to Rs 1,265.3 crore. The brokerage firm said that Ultratech Cement’s volumes will rise by approximately 6 per cent.
Axis Securities stated that the volumes are expected to grow on-year on demand improvement and gain in market share. Revenue, it added, will remain flattish YoY due to lower realization, and EBITDA margin will contract YoY owing to lower realization but it will improve QoQ
Furthermore, JM Financial, in a report, said that UltraTech Cement aims to add around 68mt to India’s grey cement capacity by FY27E (14 per cent CAGR). “This will enable it to post industry leading volume growth, going forward, despite large scale. Directionally, it plans to achieve >200mt by FY27E through organic/ inorganic expansion as it intends to gain capacity market share which will be supported by the balance sheet. It has enough levers for structural cost improvement of Rs 200-300/tn over the next 3 years. This will help it to either increase market share further or achieve industry leading profitability.”
Here are things to watch out for as UltraTech Cement will announce its Q3 earnings report on January 23:
– Investors and market participants will keep an eye on management commentary on volume growth. According to brokerage firms, the company is expected to record 8-10 per cent volume increase.
– Another monitorable will be on demand outlook. After a subdued H1FY25, cement demand exhibited improvement in Q3FY25. The demand during H1FY25 was impacted by seasonality, prolonged rainfall, delays in budgetary allocations for infrastructure projects, and labour shortages. However, the demand began to pick up in Oct’24 and remained strong through November and December 2024. Despite this improvement, delays in infrastructure fund allocation, extended monsoons, and region-specific challenges continued to weigh on both trade and non-trade segments. JM Financial said, “The overall demand for cement within the coverage universe in Q3FY25 is estimated to conclude on a higher note on a YoY basis, with an expected growth of 7 per cent.”
– Investors will also keep an eye on pricing trends. Following subdued pricing trends in H2FY25, JM Financial said that cement prices experienced an upward trend in Q3FY25 across regions. “During the quarter, the overall pricing trend remained elevated, with the highest price increases observed in the North, followed by the West Central, East, and South regions. It is believed that cement prices have bottomed out,” the brokerage firm said.
– Another key monitorable will be commentary on turnaround of India Cement acquisition. The Aditya Birla Group firm had, on December 24, announced that it has completed the acquisition of 32.72 per cent stake in India Cements. The acquisition adds 14.5 million tonnes of production capacity to UltraTech’s portfolio.