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UltraTech Cement, India’s largest cement maker, fell short of Street expectations for the quarter ended September, with poor demand and low prices taking a toll on the company.
The company recorded a net profit of just Rs 264 crore, 52 per cent lower than the Rs 550 crore in the corresponding quarter last year. Analysts had estimated net profit at Rs 350-400 crore.
The company’s net sales declined to Rs 4,502 crore, against Rs 4,699 crore in the year-ago period, a fall of 4.2 per cent.
“The results for the quarter have been impacted mainly on account of lower selling prices and subdued demand. Cement demand remained sluggish on account of the prolonged monsoon and low off-take from the infrastructure and housing sectors,” UltraTech said in a statement on Saturday.
It added the benefit of the softening prices of imported coal was negated by the devaluation of the rupee. “Logistics and raw material costs continued to rise, given the high diesel prices,” it said.
The company’s outlook, too, was grim. “In FY14, demand growth is likely to be about five per cent, though in the long term, growth is likely to be about eight per cent,” the company said.
On Friday, the UltraTech stock closed at Rs 1,963.50 on the BSE exchange, after touching a high of Rs 1,984.
UltraTech’s rivals ACC and Ambuja Cements are scheduled to announce their September quarter results on October 23.
