Mumbai: UltraTech Cement Ltd, India’s biggest cement firm, reported a 19.33% increase in net profit for the quarter ended 31 March even as it faces surplus supply scenario and rising input costs in the coming quarters.
The Aditya Birla Group company’s net profit rose to Rs 867.32 crore from Rs 726.77 crore in the quarter ended 31 March. Sales rose to Rs 5,336.59 crore from Rs 4,490.14 crore. Traditionally, the March quarter is strong for cement firms.
During the quarter, variable costs rose 10%, mainly on account of an increase in energy costs.
“The price of coal, both domestic and imported, continued to mount in FY12. The impact of the increase in domestic coal prices by 30-150% by Coal India Ltd in Q4FY11 was felt during the year. Further, logistics cost also rose on account of the increase in railway freight,” the firm said in a note.
The cement industry is likely to grow over 8%, linked to the government’s focus on infrastructure development, UltraTech said. “The surplus scenario is likely to continue for the next three years. Moreover, continuing rise in input costs will adversely impact margins,” it added.
The shares of UltraTech Cement rose 0.37% to close at Rs 1,466.6 on Monday on BSE. The benchmark Sensex lost 1.6%.
The results for the year ended 31 March 2011 were recast to include Samruddhi Cement Ltd’s performance for the period 1 April 2010 to 30 June 2010. UltraTech’s results are not strictly comparable with the corresponding period of the previous year.
Despite the government’s focus on infrastructure investment, demand is yet to pick up, said a senior UltraTech Cement executive.
“The slowing of economy is reflected in the results. Otherwise, the demand projection would be in double digits instead of 8%,” he added, requesting anonymity.
The board recommended a dividend of Rs 8 per share, aggregating to Rs 219 crore. The firm will absorb the corporate tax on the dividend amounting to Rs 36 crore, resulting in a total payout of Rs 255 crore, it said in the statement.
pr.sanjai@livemint.com
