UltraTech Cement's Q2 profit dips 42% to ₹760 cr on lower demand

UltraTech Cement has reported a 42% year-on-year decline in its net profit at ₹759.70 crore in the July-September quarter as compared to ₹1,310 crore profit in the same period last year. However, the cement major's revenue surged 16% at ₹13,892.69 crore in the September quarter vs ₹12,016 crore in the year-ago period, the company said in a stock exchange filing today. 

Following this, the company’s stock surged 1.89% to hit an intra-day high of ₹6,445. “The second quarter is traditionally a weak one for the cement sector, with lower demand as construction activity slows down due to monsoons. Demand was low during July and August 2022, showing some sign of revival in September 2022,” the company said in a statement. “Demand revival is imminent, especially during the festive season and the January-March peak construction period,” it added. 

On a sequential basis, the company’s profit plunged 52% from ₹1,584.08 crore in the April to June quarter, whereas the company’s revenue declined by 8% from ₹15,164 crore during the previous quarter. 

Its consolidated EBITDA (earnings before interest, taxes, depreciation and amortisation) declined 29% at ₹2,013 crore in the September quarter, compared to ₹2,855 crore in the same period last year. The cement major’s consolidated sales in Q2 FY23 surged over 15.8% to ₹13,956 crore vs ₹11,743 crore during the year-ago period. The company’s India sales stood at ₹13,176 crore in Q2 FY23, as compared to ₹11,242 crore in the year-ago period.

In the September quarter, UltraTech's expenses advanced by 29.2% to ₹12,595 crore as compared to ₹9,743 crore in the year-ago period. Of this, the fuel cost increased by 58% at ₹3,902 crore YoY, whereas the cost of raw materials surged by 18% YoY.