UltraTech Cement Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from UltraTech Cement Ltd (ULTRACEMCO) Q1 FY23 Earnings Concall

Q&A Highlights:

• Sumangal Nevatia from Kotak Securities asked about the inventory and lag in pet coke. Atul Daga CFO replied that it has 50 plus days of inventory at the close of June for pet coke and thermal coke combined.

• Amit Murarka of Axis Capital asked about the revised FY23 capex guidance and trade mix in 1Q23. Atul Daga CFO replied that the capex will go up, plus minus INR6,000 crore. On the trade mix, it’s 67% for 1Q23 and blended ratio 70%.

• Indrajit Agarwal with CLSA enquired about replacement cost for the industry. Atul Daga CFO answered that if one has to start from scratch today, on the current prevailing prices, the company would peg it anywhere between plus minus $110-120

• Indrajit Agarwal with CLSA asked if the company is seeing a bump up in demand, which is generally seen in the pre-election year. Atul Daga CFO answered that there is 20 month left pre-election and there is huge amount of tailwinds for demand.

• Prateek Kumar of Jefferies asked about overall utilization of 83% and its split region-wise and realizations. Atul Daga CFO replied that north and central would have gone up in double digits, west and east might be 5-6% and south was flat.

• Prateek Kumar of Jefferies asked about the 15% IRR on expansions post FY26, what unit EBITDA the company is assuming for the expansions. Atul Daga CFO answered that doing a rough calculation INR12,866 crores delivering a ROCE of 15% plus would generate a INR1,400-1,500 crore EBITDA.

• Prateek Kumar of Jefferies also asked about the exit realizations of June quarter vs. avg. Atul Daga CFO replied that June exit was slightly less. When monsoon starts kicking in, realizations start dropping; about 3-5% lower was the exit from the start.

• Ashish Jain with Macquarie enquired about the energy cost for June month or first few weeks of July and also the net debt numbers. Atul Daga CFO said that daily it is going up and it’s very volatile. On net debt, it has gone up slightly to INR5,561 crore on a consolidated basis and India is INR4,670 crore.

• Kamlesh Bagmar from Prabhudas Lilladher asked about Phase 2 expansion, how much blended ration can be expected. Atul Daga CFO answered that the company is currently reaching 70%. On a consolidated basis, the company might see a percentage improvement further.