Ultratech Cement released the financial results for the April to June quarter of FY24. During the period under review, the company’s consolidated profit surged 6.7% year-on-year (YoY) at ₹1,688.45 crore as against ₹1,584.08 crore reported in the same period last year, owing to an increase in demand. The company's revenue from operations in Q1 of the current fiscal year stood at ₹17,737.10 crore, registering a growth of 16.9% year-on-year, as against ₹15,163.98 crore reported in the same period last year.
The company's EBITDA (earnings before income, tax, depreciation and amortisation) stood at ₹3,223 crore in Q1 of FY23. Meanwhile, the company's operating EBITDA/Mt stood at ₹1,034, as against ₹1,248 in the same period last year.
The company's domestic sales volume surged 20% year-on-year with capacity utilisation of 89%. The company's energy cost increased by 3% year-on-year (YoY) at ₹1,621 crore during the period under review as against ₹1,573 crore in the same period last year. In the April to June quarter, the company’s raw material cost grew by 6% year-on-year at ₹610 crore, as against ₹577 crore owing to an increase in the cost of raw materials such as fly ash, slag and gypsum, amongst others, as well as in the improvement of clinker conversion ratio. The company's logistics cost witnessed a growth of 1% year-on-year at ₹1,264 crore during the period under review as against ₹1,253 crore in the same period last year. The company says the logistics cost was impacted by the resumption of busy season surcharge, and partially mitigated by lead optimisation and operating efficiencies.
During the quarter under review, the company's other costs declined by 8% year-on-year at ₹683 crore, as against ₹740 crore in the same period last year owing to the operating leverage impact.
Shares of Ultratech Cement closed lower by 1.18% at ₹8,126.5, in tandem with the broader market. The BSE Sensex declined by 1.31% or 887.64 points before closing at 66,684. During the session, the company’s market capitalisation stood at ₹2.34 lakh crore, as more than 1.17 lakh shares exchanged hands on the BSE, as against the two-week average of 5,797 shares.
Rating agency Moody's expects the EBITDA margin for UltraTech Cement to fall to about 18% in FY 2023 and around the 20% mark in FY 2024.
The rating agency says that the country's cement production will climb by around 6% to 8% over fiscal years 2023 and 2024, following a 21% jump for FY22. A growing housing sector, which typically accounts for 60%-65% of India's cement consumption, will remain a key demand driver. Also, continued large investments in roads and infrastructure projects will fuel cement demand," Moody's says.
While cement demand remained solid in the world's second-largest cement market for most of fiscal 2023, profitability slid sharply, largely owing to elevated costs of pet coke, coal and diesel. A sequential, quarter-on-quarter, decline in these costs will prevent a further sharp decline in profitability, the ratings agency notes.