UltraTech Cement, India’s largest cement producer, has posted a 6.98% fall in consolidated net profit at Rs 1,584 crore for the first quarter ended June, as overall expenses rose during the three-month period. The company had posted a net profit of Rs 1,703 crore for the same quarter of last financial year. However, the company’s earnings beat Bloomberg analysts’ consensus estimate, who were expecting the firm to post a net profit of Rs 1,369.1 crore for the reporting quarter.
During the quarter under review, the Aditya Birla group company’s net sales rose 28.28% to Rs 15,007 crore, compared with Rs 11,698 crore posted during the same quarter a year ago. However, its EBITDA fell 8.77% to Rs 3,204 crore from Rs 3,512 crore recorded during the same period a year ago. The company achieved capacity utilisation of 83% (73% in Q1FY22), while domestic sales volume grew 19% on a year-on-year basis.
UltraTech Cement’s total expenses were up 36.51% to Rs 12,980.06 crore (from Rs 9,508.26 crore), while cost of materials consumed rose to Rs 1,999.16 crore (from Rs 1,550.76 crore). The firm’s logistics costs rose 6% on a YoY basis to Rs 1,253 per tonne, while energy costs rose 54% to Rs 1,573 per tonne due to rise in fuel prices. Impacted by input cost and diesel prices, its raw material cost rose 13% to Rs 577 per tonne on a YoY basis.
After a strong FY22, the company’s cement demand was impacted by overall inflationary trends and lower labour availability in May. However, demand picked up in June on pre-monsoon construction activity, the company said in a statement. During the quarter, it achieved capacity utilisation of 83% as against 73% during Q1FY22, while domestic sales volume grew 19% on a year-on-year basis.
Work on additional capex announced during the quarter has commenced and commercial production from these new capacities is expected to go on stream in a phased manner by FY25. Upon completion of the latest round of expansion, the company’s capacity will grow to 159.25 MTPA, reinforcing its position as the third-largest cement company in the world, outside of China, the company added.
On the outlook, the company said the cement industry in India is set to see an upswing in demand in FY23 due to the strong momentum in housing and the government’s thrust on infrastructure and industrial development. However, headwinds arising out of rising cost pressure could put some pressure on the profitability of cement companies, it added.
Shares of Ultratech Cement closed up 5.03% at Rs 6,437 on the BSE.