Rising input costs and lower realisation have dented profits of UltraTech Cement, the country’s largest cement maker. The company, which saw merger of Grasim’s cement assets into it, reported a decline of 36 per cent in its net profit on a like-for-like (LFL) basis.
On a LFL basis, taking into consideration the performance of Samruddhi Cement, the results were weak as net profit dipped 36 per cent to Rs 319 crore compared to Rs 499 crore last year. The net sales was marginally up by 0.9 per cent at Rs 3,715 crore against Rs 3,682 crore last year in the same quarter.
However, without taking into account Samruddhi’s merger in the third quarter last financial year, UltraTech, part of the Aditya Birla Group, posted a rise of 62.8 per cent in its net profit for the quarter ended December 31 at Rs 319 crore compared to Rs 196 crore in the corresponding period last year. The company’s net sales during the period rose 124.9 per cent to Rs 3,715 crore against Rs 1,652 crore. But this result is not comparable since during the current financial year, Grasim's cement assets were amalgamated with UltraTech.
"During the third quarter this year, industry demand growth was significantly lower than the expected growth of over 8 per cent. This was mainly on account of prolonged monsoon, non-availability of resources, lower realty and infrastructure spending and de-growth in the markets of southern India," said UltraTech in a statement.
The company also faced pressure on input costs as prices of imported coal were up 36 per cent to $125 a tonne against $92 a tonne last year. The company's overall realisation, too, dipped 3 per cent on year-on-year basis in the December quarter.
In its outlook, company said that pricing environment was likely to remain challenging coupled up with rising energy costs due to greater reliance on imports which will continue to squeeze margins.
On the Bombay Stock Exchange, shares of UltraTech closed on Tuesday at Rs 1,019.30, up 0.22 per cent.
