UltraTech Cement Q3 Results: Profit Beats Estimates But Margin Contracts
The cement maker’s net profit rose 8% year-on-year to Rs 1,707.72 crore in the three months ended December.
UltraTech Cement Ltd.’s third-quarter profit rose, beating estimates, but margin contracted.
The cement maker’s net profit rose 8% year-on-year to Rs 1,707.72 crore in the three months ended December, according to its exchange filing. That compares with the Rs 1,493.3-crore consensus estimate of analysts tracked by Bloomberg.
The earnings increased 30% over the preceding quarter.
A 54% decline in finance costs aided the bottom line even as other income slumped during the reported period. But, basic jump came on account of tax credit of Rs 76 crore reported in the quarter.
Key Highlights: Q3 FY22 (YoY)
Revenue rose 5.9% to Rs 12,984.9 crore, against the Rs 12,904.5-crore forecast. Sequentially, it was up 8.1%.
Operating profit declined 23% to Rs 2,419.4 crore, compared with the estimated Rs 2,731.8 crore. It fell 10.9% over the previous quarter.
Ebitda margin contracted to 18.6% from 25.6% a year ago and 22.6% as of September. Analysts had pegged the metric at 21.2%.
Other income declined 73% to Rs 70.5 crore.
Volumes declined 3% to 23.13 million tonnes.
An increase in coal/petcoke and diesel prices weighed on the operating income. Diesel prices rose as much as 4%per tonnes, while raw material costs jumped 7%.
Other Highlights
The board announced a capex of Rs 965 crore towards modernisation and expansion of capacity at Birla White from 6.5 lakh tonnes per annum to 12.53 LTPA, in a phased manner.
The capacity expansion will help Birla White strengthen its presence in the growing white cement market, reducing its dependence on high-cost imports.
The company commissioned line-II of the Uttar Pradesh-based Bara grinding unit, having a cement capacity of 2 million tonnes per annum.
This additional capacity will help UltraTech to service the fast-growing cement demand in the central region of India.
With this expansion, the company has commissioned 3.2 MTPA new cement capacity during 2021-22, taking its total cement manufacturing capacity in India to 114.55 MTPA.
Concall Highlights
Cost Pressure Outlook
Don’t expect fuel cost to surprise in Q4; but remain at elevated levels.
Receding fuel cost pressures to start reflecting on books from Q1 FY23.
Fuel cost softened from peak in December quarter; but still remains high.
Prices to soften post winter Olympics in China.
Higher crude prices could keep the cost pressures elevated for the industry.
Price Hike Outlook
Undertaken price hike for January.
East, south zone and select parts of Maharashtra and Kerala have seen price hikes.
Price hike undertaken in October were rolled back.
More Highlights
The company has prepaid loans worth Rs 3,459 crore in the December quarter.
Capacity utilization at 75% for December quarter.
Capacity addition taking place in the eastern Zone.
Shares of UltraTech Cement were trading 2.86% higher after the results were announced compared with a 0.31% gain in the benchmark Nifty 50.
