UltraTech Cement Q1 Preview: Ebitda To Taper Despite Healthy Revenue Growth

UltraTech Cement Ltd. is expected to face muted Ebitda growth despite robust revenue growth estimates for the first quarter.

Revenue from the Aditya Birla group's flagship cement manufacturer is likely to fall 12.9% to Rs 17,118 crore, while the Ebitda is expected to decline 5% to Rs 2,940 crore in the June quarter, according to Bloomberg consensus estimates.

• Revenue expected may fall 12.9% to Rs 17,118 crore.

• Net profit expected may grow 2.1% to Rs 1,615 crore.

• Ebitda may drop 5% to Rs 2,940 crore.

• Margin may fall to 17.2% vs 20.4%.

UltraTech has already reported a consolidated volume growth of 20% for the April–June quarter. However, brokerages expect a dip in Ebitda and margin due to weaker realisation.

Net-sales realisation is expected to decline by 3.7% as all-India average cement prices declined in the past year, according to YES Securities (India) Ltd. Lower costs and heightened competition, as seen from a lack of pre-monsoon price hikes, "gives them (cement companies) much more support to maintain (lower) prices", Hetal Gandhi, head of research at Crisil Ltd. said in a report.

Muted cement prices are weighing down on Ebitda, with partial respite from lower fuel costs, according to ICICI Securities Ltd. The brokerage expects an Ebitda decline of 2.7% for UltraTech. The majority of benefits of lower costs are expected to kick in only by the second or third quarters of the current fiscal due an inventory lag.

• Consolidated sales grew 19.6% YoY to 29.96 million tonnes.

• Grey-cement sales in India grew 20% to 28.6 MT.

• Grey-cement sales overseas grew 11% to 1.04 MT.

• Capacity utilisation at 90%.

UltraTech's total capacity of grey cement in India increased to 131.25 MT after the company commissioned a 1.3-MT brownfield expansion in its West Bengal unit. It expects this capacity to increase to 155.05 MT by financial year 2025 after completion of its Phase-2 expansion.