UltraTech Cement today reported a profit after tax (PAT) of Rs 683 crore for the April-June quarter, against that of Rs 558 crore for the same period last year, on the back of increased sales.
The Aditya Birla Group company also said it would spend over Rs 11,000 crore in the next three years on expanding capacity. The proposed expansion, which would be over by the first quarter of FY14, will take its cement making capacity to over 61 million tonne per annum from 52 million tonne now.
Net sales of the company stood at Rs 4,365 crore during the April-June period compared to Rs 3,990 crore in the same period of last fiscal.
"The quarter was adversely impacted by the 30% increase in the domestic coal price in March 2011. Alongside, imported coal price rose by 30% Y-o-Y resulting in a substantial escalation in costs," it said.
The combined sales during the quarter stood at 9.46 million tonne compared to 9.61 million tonne a year ago.
UltraTech Cement said the current surplus scenario in the sector was likely to continue over the next two to three years resulting in the selling prices remaining under pressure.
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"With commodity prices rising, input costs will be affected, which will squeeze margins," it said.
The proposed Rs 11,000 crore capex, to be funded through a judicious mix of internal accruals and borrowings, would be used for brownfield expansion of the clinkerisation plants at Karnataka and Chhattisgarh, installing waste-heat recovery systems, instituting bulk packaging terminals and setting up of ready-mix concrete plants.
"Orders have been placed for major equipment for setting up of the projects," it added.
UltraTech Cement has an annual capacity of 52 mtpa now. It has 11 manufacturing plants, one white cement plant, one clinkerisation plant in UAE and 15 grinding units.