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Business News/ Companies / Company Results/  UltraTech’s Q1 net rises 6.6% as infra demand up
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UltraTech’s Q1 net rises 6.6% as infra demand up

The profit beats Bloomberg analysts’ estimate at ₹1,615.3 crore for the country’s largest cement-maker.

 Representative image. (REUTERS)Premium
Representative image. (REUTERS)

MUMBAI : Despite rising raw material prices and energy costs, Aditya Birla Group-owned UltraTech Cement Ltd, on Friday, reported a 6.6% jump in consolidated net profit to 1,688.45 crore for the first quarter of FY24 as compared to 1,584.08 crore a year ago.

The profit beats Bloomberg analysts’ estimate at 1,615.3 crore for the country’s largest cement-maker.

During April-June, the company’s revenue from operations increased by 17% y-o-y to 17,737 crore against 15,163.98 crore in Q1 FY23.

The company said it has achieved a capacity utilisation of 89% as against 83% during the first quarter of last fiscal.

Ultratech’s domestic sales volume rose 20% year-on-year, said the company.

Cement businesses in India have been struggling for better margins due to several factors including rising energy costs, increasing raw material prices and fierce competition after the entry of Adani Group into the industry through acquisition of Ambuja Cements Ltd and ACC Ltd in a closely-fought battle last year.

Ultratech Cement said the energy cost was higher by 3% y-o-y, primarily due to currency devaluation during the June quarter.

Besides, a 6% rise in raw material cost, mainly driven by the higher prices of fly-ash and slag, had a compounding effect on the operating margins.

The company’s operating margin came down to 1,034 during June quarter from 1,248 in the same period of last year and 1,060 in the previous quarter.

However, the demand for cement across all sectors continues to remain strong, said the company.

“Higher infrastructure spending ahead of the general elections in 2024 is expected to further propel cement demand during this fiscal," the company said.

Ultratech has commissioned a cement capacity of 3 mtpa during the quarter, taking the company’s total grey cement capacity to 129.95 mtpa in India.

The revenues from grey cement (domestic) stood at 15,247 crore, a 17% growth y-o-y, white cement revenues rose 18% y-o-y to 590 crore, and earnings from readymix concrete grew 37% y-o-y to 1,233 crore in the June quarter of FY2024.

Ultratech’stock, with a market capitalization of 2.35 trillion, over the past year, has yielded a 32% return, outperforming the broader market index Nifty 50’s 19% returns.

Shares of Ultratech Cement closed 1.28% lower at 8,119.20 apiece on the NSE on Friday as Indian markets logged off the week with a 1.31% loss.

UltraTech’s expansion program is progressing as per schedule. Following the successful commissioning of 12.4 mtpa capacity of grey cement in FY23, the company has further commissioned 4.3 mtpa capacity so far in this financial year. These include 2.2 mtpa brownfield cement capacity at Patliputra in April 2023, 0.8 mtpa brownfield cement capacity at Neem ka Thana, Rajasthan in May 2023 and 1.3 mtpa brownfield cement capacity at Sonar Bangla, West Bengal in July 2023.Work on its next phase of growth of 22.6 mtpa is in full swing. Commercial production from these new capacities is expected to go on stream in a phased manner by FY25/FY26.

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Published: 21 Jul 2023, 10:41 PM IST
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