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Informist, Friday, Jul 19, 2024

 

--UltraTech: Do not expect much growth in Jul-Sep due to monsoon

--UltraTech: Expect normal growth from Oct-Dec

--UltraTech: Apr-Jun domestic capacity utilisation at 85%

--UltraTech: Capacity utilisation in south, west regions 85-86%

--UltraTech: Capacity utilisation in east 80%, north 82-85% 

--UltraTech: July remains soft in terms of pricing 

--UltraTech: India Cements remains pure non-controlling, fincl invest 

--UltraTech: Can't exceed 23% stake in India Cements at the moment 

--UltraTech: FY25 volume growth for co seen in double digits 

--UltraTech: FY25 volume growth for industry seen 7-8%

--UltraTech: Apr-Jun India grey cement sales realisation 5,045 rupee/tn

--UltraTech: Apr-Jun India grey cement realisation down 5.7% on yr

--UltraTech Apr-Jun consol EBITDA at 32.05 bln rupees vs 32.23 bln

--UltraTech: Consol net debt at 54.82 bln rupees as on Jun 30 

 

MUMBAI – UltraTech Cement Ltd today reported a meagre 0.5% year-on-year increase in consolidated net profit for the June quarter at 16.97 bln rupees, missing Street estimates. The net profit growth was muted as lower realisation offset the effect of a 6% growth in domestic sales volumes, and lower logistics and fuel costs during the quarter. The muted growth is expected to continue in Jul-Sep as well due to monsoons, the company said.

 

Analysts had expected the Aditya Birla Group company to earn a consolidated net profit of 17.83 bln rupees. The consolidated net profit for Apr-Jun was nearly 25% lower quarter-on-quarter. The company reported a consolidated topline of 180.70 bln rupees, up 1.9% on year and down 11.5% sequentially. Following the disappointing results, the stock fell, closing the session 3.3% lower at 11,258.30 rupees on the National Stock Exchange.

 

This muted growth is likely to extend to the next quarter as product prices were still soft so far in July, the company said in a post-earnings conference call. The company does not expect significant growth in Jul-Sep due to monsoons but expects things to be normal in Oct-Dec, the management said.

 

The company reported a consolidated sales volume of 31.95 mln tn for the quarter, an increase of 7% year-on-year. In value terms, UltraTech's India grey cement sales rose 0.2% on year to 152.84 bln rupees. The company is confident it will be able to do better in the second half of this financial year and targets a double-digit volume growth in 2024-25 (Apr-Mar). The cement industry is expected to grow its volumes by 7-8% this financial year, and UltraTech expects to grow faster, the management said.

 

Despite higher year-on-year volumes, price cuts during the quarter affected the company's realisation and overall earnings during the quarter. Its domestic grey cement sales realisation in Apr-Jun declined 5.7% on year and 2.4% on quarter to 5,045 rupees per tn.

 

UltraTech's operating margin was flat on year at 17%, but down from 20% a quarter ago. The consolidated earnings before interest, taxes, depreciation, and amortisation fell slightly on year to 32.05 bln rupees. The consolidated EBITDA per tn for the quarter declined to 951 rupees from 1,018 rupees a year ago.

 

Capacity utilisation in India fell on quarter but remained at the same levels as last year at 85%. The utilisation was the highest in the south and west regions at 85-86% and the lowest in the east at 80%, the company said. The utilisation in the north was 82-85%.

 

The company's key costs for grey cement, such as logistics and energy, fell 5% and 17% year-on-year respectively, while raw material costs declined 1%. Overall, the company's expenses rose 3.1% on year to 161.28 bln rupees in Apr-Jun.

 

The company intends to make its operations more efficient and bring down overall costs in the coming years, the management said. Its lead distance reduced to 385 km in Apr-Jun from 409 km a year ago and the company is confident to reduce it further in the coming quarters.

 

The company's consolidated net debt at the end of June quarter was 54.82 bln rupees as compared with 27.79 bln rupees at March-end. 

 

On the recent investments in India Cements, the company said it remains a pure non-controlling and financial investment. The company cannot increase the stake at the moment from the current 23%, it said.

 

End

 

Reported by Anshul Choudhary and Sunil Raghu

Edited by Saji George Titus

 

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