 "UltraTech Q1 net slips 6%")
UltraTech Cement, India's largest cement maker with a capacity of 63 million tonne (Mt), has posted a decline of 6% in its consolidated net profit at Rs 591 crore for the quarter ended June against Rs 628 crore in the previous corresponding quarter. The company's consolidated net sales improved to Rs 6,372 crore compared with Rs 5,926 crore, up 6.4%.
However, the decline was primarily led by increase in finance charges and depreciation costs post acquisition of Jaypee's Gujarat-based cement assets.
The quarterly performance is in line with what the street had been expecting. The average consensus net profit figures of seven brokerage houses stood at Rs 585 crore while the average consensus net sales were estimated at Rs 6,390 crore.
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On the BSE, stock prices of UltraTech Cement jumped 4.27% to close at Rs 3,353.95 before hitting an intra-day high of Rs 3,369.50. This was due to the company posting stronger than expected profitability led by cost controls. On standalone basis (excluding Star Cement UAE), the company reported an EBITDA of Rs 1151.9 crore versus Rs 1007.9 crore during 1QFY2015, up 14.3% year-on-year. The EBITDA margin came in at 18.9% versus 17.8% during 1QFY2015, a jump of 110 basis points.
Despite pressure on prices and sluggish demand for cement, UltraTech managed to put a reasonable good quarterly show. The company's sales volume of cement was 3.76% higher at 12.14 Mt against 11.7 Mt last year.
The energy costs for the company improved 7%, which, however, was partially offset by the increase in railway freight. The capacity utilisation for the company during the period was at 80%, better than the sector's overall average utilisation of around 72-74%.
In its outlook, UltraTech said, "With the government's focus on infrastructure development, housing sector, smart cities and roads, company is positioned across the country to meet the expected rise in demand and participate in the phase of growth in the country."