UltraTech Cement, part of Aditya Birla group, has posted a decline of 13.5% in its net profit for the quarter ended June at Rs 673 crore compared with Rs 778 crore in the previous corresponding quarter. The cement giant's net sales for the period dipped too to Rs 4, 958 crore against Rs 5, 072 crore - a decline of 2.25%.
The quarter witnessed an increasing trend in logistics and raw material cost, linked to increase in railway freight and diesel prices. The benefit of softening in prices of imported coal was partly offset by the depreciation in rupee, company said in a statement.
The outlook continues to remain challenging.Demand growth in FY14 is likely to be around 6%, though over the long run it is likely to be over 8%, it added.
On the NSE, sharea of UltraTech closed at Rs 1885, up a percentage point.
With continuous poor growth of India's cement sector, Kumar Mangalam Birla, chairman of conglomerate Aditya Birla group has said that the sector would do better if the government meets its request for a reduction of the heavy tax burden that is currently imposed on the sector.
Addressing UltraTech's shareholders at company's 13th annual general meeting (AGM) in Mumbai, Birla said, "Your company's performance has been impacted by the prevailing economic environment characterised by rising inflation, high interest rates and soaring input costs. Though the first quarter if FY14 has been a tad subdued, I view the future with optimism, given that the long term drivers for cement remain intact."
No benefits through coal linkages have been a concern for the industry for long. Industry officials have long been asking for the required coal availability via linkages.
Birla said, "Coal linkage is critical to the cement sector.We are sure that the government is seized of these legitimate concerns."
Further, he added that government's focus on infrastructure development should bolster the demand for cement.
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