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Business News/ Companies / Company-results/  UltraTech Cement profit rises 10% to Rs723 crore
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UltraTech Cement profit rises 10% to Rs723 crore

UltraTech reported a consolidated net profit of Rs723 crore, against Rs657 crore in the same period a year ago; net sales rose 5% to Rs6,850 crore from Rs6,517 crore

In the fiscal year 2015-16, Ultratech Cement reported net sales of Rs25,281 crore, up from Rs24,056 crore in the previous fiscal year. Photo: Pradeep Guar/MintPremium
In the fiscal year 2015-16, Ultratech Cement reported net sales of Rs25,281 crore, up from Rs24,056 crore in the previous fiscal year. Photo: Pradeep Guar/Mint

Mumbai: UltraTech Cement Ltd, India’s largest cement maker, on Monday said net profit for the quarter ended 31 March rose 10% due to a better operational performance.

The company reported a consolidated net profit of 723 crore, against 657 crore in the same period a year ago. Net sales rose 5% to 6,850 crore from 6,517 crore.

The company had been expected to post a net profit of 686.2 crore on net sales of 6,933.1 crore, according to Bloomberg analyst estimates.

Total expenses for the January-March 2016 period were higher by 6%, year-on-year (y-o-y), at 5,857.01 crore.

The company reported a 15% y-o-y growth in cement sales at 13.20 million tonnes (mt) for the January-March 2016 quarter. The average realization, however, was 9% lower at 4,609 per tonne.

Atul Daga, chief financial officer, UltraTech, said over the phone, “Price realization in the March quarter declined both sequentially and on a y-o-y basis. Cost reduction and volume growth have helped (numbers)." According to the company’s results presentation put up on Monday, operational costs for its grey cement business were lower by 10% y-o-y.

Infrastructure contributed significantly to overall cement demand, Daga said.

UltraTech also reported a 5% y-o-y rise in capacity utilization at 84% for fiscal 2016. In its outlook for the next fiscal, the firm expects cement demand to grow 7-8%.

Siddharth Purohit, an analyst with Angel Broking Pvt. Ltd, expects the firm to gain from better cement prices in the coming quarters. “We believe the company has the potential to deliver 10% volume compounded annual growth rate over financial years 2016-18. Though cement prices started picking up in March 2016, the real impact of the same will be visible in the coming quarters, and we believe earnings could improve further in financial year 2016-17," he said in an email note.

In the full fiscal year to 31 March, net profit rose to 2,287 crore from 2,098 crore in the previous year. Net sales increased to 25,281 crore from 24,056 crore. In its presentation, the company said, it reduced its net debt by 1,569 crore in the past fiscal which, as on 31 March, was at 3,626 crore.

The annual financial performance is not comparable with the previous year due to its acquisition of Jaiprakash Associates Ltd’s Gujarat cement assets which was completed in June 2014.

On 31 March, UltraTech signed a second deal with Jaiprakash Associates to purchase its 21.2 mt cement assets for 15,900 crore. As part of the deal, the firm is also expected to pay an additional 470 crore on the completion of its under-construction assets. In its results presentation, UltraTech said the acquisition will be financed through 20-year rupee term loans and a five-year moratorium on the principal amount.

In a separate note, UltraTech said its board had recommended a dividend of 9.5 per equity share of 10 for 2015-16. The board has also approved the issuance of redeemable non-convertible debentures (NCDs) on a private placement basis. Daga added the NCDs may be used to fund the acquisition. The acquisition is likely to be completed in 12-13 months.

UltraTech closed 0.21% higher at 3,277.60 on BSE, while the benchmark Sensex shed 0.62% to 25,678.93 points.

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Published: 25 Apr 2016, 03:53 PM IST
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