UltraTech Cement's consolidated net profit more than doubled to Rs 1,234 crore on a year-on-year (y-o-y) basis for the quarter ended September 30, on the back of operational efficiencies and lower finance cost.
Upon completion of the latest round of expansion, UltraTech’s capacity will grow to 136.25 MTPA, reinforcing its position as the third-largest cement company in the world, outside of China.
UltraTech Cement’s consolidated net profit more than doubled to Rs 1,234 crore on a year-on-year (y-o-y) basis for the quarter ended September 30, on the back of operational efficiencies and lower finance cost.
The company’s consolidated net sales rose 7.8% y-o-y to Rs 10,231 crore. The consolidated Ebitda was aided by higher volumes, competitive cement prices, lower energy costs and stable logistics. Expenses increased by 37% y-o-y to Rs 2,830 crore.
Ebitda/tonne of the company registered a strong growth of 30% to Rs 1,387 per tonne. Consequently, the operating margins came in at 28%, a sharp 600-basis point rise.
The volumes during the quarter surged a good 20% y-o-y to 19.21 million tonne from 16 million tonne in the corresponding quarter last year, led by strong rural demand and government spends on infrastructure. The company reported volume growth in the north, central, Gujarat and East regions, whereas volume contracted in south and Maharashtra.
Going forward, UltraTech expects demand for cement to grow on the back of the government’s thrust on infrastructure and the expanding rural economy. The recent policy measures announced by the Reserve Bank of India to support the real estate sector will also aid demand.
For the second quarter in a row, UltraTech reduced net debt substantially. With prudent working capital management and overall efficient operations, the company shaved off Rs 4,728 crore of net debt in the first half of this financial year. In the September quarter, the company reduced the net debt by Rs 2,519 crore.
The company’s consolidated net debt to Ebitda reduced substantially to 1.22x versus 1.70x in March 2020. The company’s consolidated net debt at the end of September quarter stood at Rs 12,132 crore against Rs 14,651 crore in the June 2020 quarter, and Rs 16,860 crore in the March 2020 quarter.
The company said work on the company’s 3.4 MTPA cement capacity addition in Odisha, Bihar and West Bengal has picked up pace and it is expected to get commissioned during FY22 in a phased manner.
The 14.6 MTPA cement plants acquired during the previous fiscal have been integrated and now the company is investing in further improving operations.