UltraTech Cement Q2FY25 results: Net profit dips 36% to Rs 820 crore

Cement sale volume slow down, growing at three percent YoY in Q2

India’s largest cement manufacturer UltraTech Cement reported a 36 per cent fall in net profit for the quarter ended September (Q2FY25) on account of lower revenue from operations.

For the quarter under review, UltraTech’s net profit attributable to owners of the company stood at Rs 820 crore, down 36 per cent from a year ago.

Earnings of the company fell, as revenue during the same period was down 2.4 per cent to Rs 15,634.73 crore.

In a Bloomberg poll, 16 analysts estimated a revenue of Rs 15,711 crore and 18 analysts estimated a net income adjusted of Rs 1,032 crore.

 

UltraTech met revenue expectations, but missed that for profits.

Sequentially, UltraTech’s net profit fell 52 per cent and revenue was down 13 per cent.

Profit before interest, depreciation and tax (PBIDT) was Rs 2,239 crore, down from Rs 2,718 crore a year ago, the company said. Ebitda per tonne for domestic sales, the company said was at Rs 732 per tonne, lower by Rs 224/ per tonne from a year ago. Ebitda is earnings before interest, taxation, depreciation and amortisation.

Capacity utilisation for the quarter was at 68 per cent, while domestic sales volume grew three per cent from a year ago. The volume growth was despite incessant rain throughout the country this season, the company said. According to the company presentation, cement demand fell or remained muted across all regions, except some segments of the north and west markets.

UltraTech saw a 14 per cent fall in energy costs from a year ago, while raw material cost was up one per cent. This was on account of an increase in the cost of fly ash and slag.

 Ronald Siyoni, associate vice president, Sharekhan by BNP Paribas, said, “UltraTech reported a marginal miss on standalone operational performance for Q2FY2025 owing to lower-than-expected volume growth of 3 percent y-o-y and higher other expenses. It targets double digit volume growth for H2FY25 along with improvement in profitability. Infra investments gathering pace, good rural demand and sustained momentum in urban housing remain growth drivers for H2 along with cost efficiency tailwinds.”

The company said with the completion of ongoing expansion projects across India by FY27, and receipt of statutory approvals for the acquisitions of Kesoram Cement (10.75 million tonnes per annum or MTPA) and India Cements (14.45 MTPA), UltraTech’s total cement capacity will surpass 200 MTPA.

In a call with analysts, the company’s management noted, they are “very confident that there is not going to be a slowdown.”

Atul Daga, chief financial officer for the company informed analysts, the company will commission another eight MTPA of capacity in H2FY25. “With respect to the acquisition that we had announced for India Cements, we are awaiting CCI approvals for the transaction, after which the open offer will be launched,” he added.