UltraTech Q2 Results: Net profit rises 7.6% YoY, misses estimate

MUMBAI: UltraTech Cement today reported a 7.6 per cent year-on-year rise in its net profit for the quarter ended September to Rs 1,300.1 crore. The figure fell below analysts’ expectations.

The company reported a 15.3 per cent year-on-year growth in revenue from operations for the reported quarter to Rs 11,548.4 crore, largely in-line with expectations.

During the quarter, the company’s profit before interest, tax, depreciation and amortization rose merely 1.6 per cent on-year as the company was unable to take as many price hikes as seen in the previous quarters.

The reported quarter is considered to be seasonally weak for cement companies as most construction work around the country slows down due to monsoons.

The biggest hit was taken by UltraTech’s margin which slid 340 basis points on-year to 22.6 per cent as the company was battered by increase in costs and an inability to pass it on to consumers. The company said that prices of petcoke and coal nearly doubled in the reported quarter, causing energy costs to rise 17 per cent year-on-year.

UltraTech said that it expects to resume coal mining operations at Bicharpur in December quarter to reduce dependence on external sources for coal, which is currently in short supply across the country.

“UltraTech is confident of weathering the storm of increase in price of coal, diesel and other inputs, with its sustainable efficiency improvement programs and increasing selling prices to absorb higher costs,” the company said in an exchange filing.

The company is optimistic that a third consecutive normal monsoon and pick-up in infrastructure-led construction activity will drive cement offtake going ahead.

Shares of UltraTech were up 2.6 per cent at Rs. 7,591 on the National Stock Exchange.