Ultratech Cement Q3 Results: Profit More Than Doubles As Demand Recovers
Net profit jumped 122.7% year-on-year to Rs 1,584.3 crore in the three months ended December
Ultratech Cement Ltd.’s third quarter profit more than doubled as pent-up demand aided recovery from the disruption caused by the Covid-19 pandemic.
Net profit jumped 122.7% year-on-year to Rs 1,584.3 crore in the three months ended December, the cement maker said in an exchange filing. That compares with the Rs 1,274.7-crore consensus estimate of analysts tracked by Bloomberg.
Revenue for the cement maker rose 17.4% over last year to Rs 12,254.12 crore.
The cement maker’s operational performance, too, surpassed analyst expectations, helped by lower costs and better revenue.
Earnings before interest, tax, depreciation and amortisation rose 56% over last year to Rs 3,094.3 crore. That was the highest operating profit Ultratech has posted since the first quarter of the financial year 2014-15. The consensus of analyst estimates compiled by Bloomberg had pegged Ebitda at Rs 2,708 crore.
Pent up demand, supply restoration and improving cost efficiencies worked in the favour of the cement maker, it said in its exchange filing. Sales volume for Ultratech rose 14% year-on-year to 23.8 million tonne.
“While rural and semi-urban housing continues to drive growth, pick-up in government-led infrastructure aided cement demand. Pent-up demand is expected to improve with the gradual return of the migrant workforce.”
Operational Efficiency
Significant reduction in other expenses, lower employee cost and stable power and freight expenses underpinned operational efficiency.
Other expenses as share of the revenue declined to 12% compared to 15.2% in the corresponding quarter of the previous year. Power expenses and freight expenses remained stable at 19% and 23% of the revenue, respectively.
Other Highlights
- Net debt reduction during Q3 FY21 stood at at Rs 2,696 crore.
- Net debt reduction for the nine months ended December was at Rs 7,424 crore.
- Capex approval of Rs 5,477 crore was granted during the quarter towards increasing capacity by 12.8 million tonne per annum with a mix of brownfield and greenfield expansion.
- Capacity being created in east, central and north India.
- Expansion is in addition to Uttar Pradesh, Odisha, Bihar and West Bengal.
Shares of Ultratech Cement had closed 0.88% higher in Friday's trade, compared with a 1.5% decline in the benchmark BSE Sensext