UltraTech Q4 Preview: Profit Likely To Be Strong Despite Sequential Price Weakness
Brokerages expect UltraTech Cement to post a 9–10% volume growth on a year-on-year basis.
UltraTech Cement Ltd. may post strong fourth-quarter results despite sequential price weakness that will impact the company's realisations and Ebitda per tonne. Net profit of the Aditya Birla Group's cement manufacturing company may jump 27% year-on-year to Rs 2,122.7 crore in the January–March period of financial year 2024, while volumes are expected to grow in high single-digit numbers on an annual basis, according to the consensus estimates of analysts tracked by Bloomberg.
UltraTech Q4 FY24 Bloomberg Earnings Estimates (YoY)
Revenue may rise 7.6% to Rs 20,084.3 crore vs Rs 18,662.4 crore.
Ebitda may rise 15% to Rs 3,815.2 crore vs Rs 3,322.5 crore.
Margin may expand to 19% vs 17.8%.
Net profit may rise 27% to Rs 2,122.7 crore vs Rs 1,666 crore.
Volumes
Brokerages expect UltraTech to post a 9–10% volume growth on a year- on-year basis.
Emkay Global Financial Services Ltd. expects UltraTech to post a 9% YoY and 26% quarter-on-quarter increase in volumes, which would be broadly in line with the industry growth rate.
Prabhudas Lilladher Pvt. expects volume to grow 10% YoY to 34 million tonnes due to the uptick in volumes since mid-quarter. The brokerage said the cement maker is well-placed to capitalise on the strong volume growth in the domestic markets, given the company's brownfield expansions that are expected to take total grey cement producing capacity to 192 MT per annum by fiscal 2026.
Rising focus on green energy to reduce power and fuel costs. UltraTech's strong balance sheet with Rs 700-crore net cash by fiscal 2026 will help keep avenues of inorganic growth open for the company, according to Prabhudas Lilladher.
Dip In Realisations
All-India average cement prices fell 4% quarter-on-quarter. The east and south regions saw the highest price dips of 11% and 5.4% respectively, according to cement price checks with dealers.
This sequential price weakness is expected to impact realisations. Prabhudas Lilladher expects UltraTech's realisations to fall 5% quarter-on- quarter.
Lower Ebitda Per Tonne
On an annual basis, UltraTech's earnings before interest, taxes, depreciation and amortisation is expected to increase 16% in the fourth quarter, while the company may see a dip in Ebitda per tonne on a sequential basis.
Prabhudas Lilladher expects the company's Ebitda per tonne to fall by Rs 101 per tonne sequentially to Rs 1,007 per tonne.
Emkay anticipates the average Ebitda per tonne to decline by Rs 150 per tonne quarter-on-quarter to Rs 1,045 per share, mainly due to subdued prices. However, it does expect players like UltraTech to maintain an Ebitda per tonne of over Rs 1,000.