Dolat Capital: UltraTech Cement Delivers Multi-Quarter High Ebitda/Tonne
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Dolat Capital Report
UltraTech Cement Ltd.’s first quarter revenue was in line, however Ebitda, Ebitda/tonne and adjusted profit after tax were above estimates.
UltraTech posted 33.1% YoY de-growth in revenue to Rs 76.3 billion due to 31.4% YoY volume decline to 14.7 metric tonne coupled with 2.4% YoY decline (up 4.0% QoQ) in realisation to Rs 5,211/tonne.
Ebitda, adjusted profit after tax down 29.7%, 25.5% YoY to Rs 20.7 billion, Rs 9.5 billion respectively.
UltraTech is positive on rural market driven by good monsoon and good kharif harvesting. Prices can decline 4-5% in Q2 FY21E due to monsoon. UltraTech expects Rs 5 billion per year savings in fixed overheads.
It increased capex guidance to Rs 15 billion to Rs 10 billion and expects net debt/Ebitda of 1 time.
Don’t expect much savings in power and fuel cost. Impact of 15% rise in diesel prices (May-June 2020) will be felt from Q2 FY21E.
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