Ultratech Cement Q1 Results: Profit Falls 4% But Beats Estimates

A view of Ultratech Cement ready mix concrete plant (Photographer: Adam Ferguson/Bloomberg)

Ultratech Cement Q1 Results: Profit Falls 4% But Beats Estimates

Ultratech Cement Ltd.’s first-quarter profit declined sequentially on lower revenue and higher costs, but surpassed estimates.

The cement maker’s net profit fell 4% quarter-on-quarter to Rs 1,703 crore in the three months ended June, it said in an exchange filing. That compares with the Rs 1,445-crore consensus estimate of analysts tracked by Bloomberg.

A sequential decline in revenue mainly reflected in the bottom line even as other income rose 3.4 times to Rs 204.8 crore.

  • Revenue declined 18% over the preceding quarter to Rs 11,829.8 crore. Analysts had projected Rs 11,676 crore.

  • Operating profit declined 10% sequentially to Rs 3,307.5 crore. Analysts had expected Rs 2,958 crore.

The operational profit was impacted by a sequential rise in power and fuel expenses at 20.5% of net sales compared with 18.8% in the preceding quarter.

Sales volume stood at 21.5 million tonnes, rose 46.9% year-on-year on a low base, but declined 22.5% sequentially.

Shares of Ultratech Cement rose as much as 1.6% on Wednesday after the earnings compared to nearly 1% gain in BSE Sensex.

Other Highlights

  • Net debt at Rs 5,984 crore as of June against Rs 6,720 crore as of March (FY21) and Rs 16,980 crore in FY20.

  • Net debt/Ebitda stood at 0.44x, down from 0.55x in FY21 and 1.72x in FY20.

  • Ultratech’s 19.5 million tonnes per year capacity expansion programme is on track, and is estimated to be completed by the end of FY23. That will take total capacity to 136.25 MTPA.

  • Covid caused some delays due to labour shortages and lockdowns. The company expects to commission all the projects as per original schedule.

  • With projections of a likely third wave, Ultratech is closely monitoring the situation and it remains "cautiously optimistic" given its financial and operational resources and the government's thrust on infrastructure and housing.

The company paid in advance long-term loans amounting to Rs 5,000 crore in July, it said, adding the repayments were made through free cash flows. Net debt fell by Rs 733 crore during the quarter ended June, it said.

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