Ultratech Cement net profit drops by 38% in Q3FY23

UltraTech Cement today reported 38% on-year drop in its consolidated net profit at INR 1,058.20 crore in the December quarter. Its revenue from operations, however, rose 19.5% YoY to INR 15,520.93 crore. The company’s operating margin dropped to 15% in Q3 from 19% in the year-ago period but was up 100 bps sequentially. Volume growth was strong during the quarter but cost pressures resulted in subdued margins.

UltraTech said its domestic grey cement sales volume rose 13% YoY and 12% QoQ, respectively. Energy and raw material costs were up 33% and 13% YoY, while they remained flat on a sequential basis.

The cement major achieved capacity utilisation of 83% last quarter as against 75% during Q3 FY22. “Given the government’s focus on infrastructure growth and the consequent rising demand for urban housing, the cement sector is poised for strong growth in the coming years,” the management said in an exchange filing.

In the second phase of capacity expansion plan of 22.6 MTPA announced during Q1, the company said work has already commenced.

“Main plant orders have been placed and civil work started at most sites. Commercial production from these new capacities is expected to go on stream in a phased manner by FY25. Upon completion of these expansions, the company’s capacity will grow to 159.25 MTPA, reinforcing its position as the third largest cement company in the world, outside of China and the largest in India by far,” it said.

During the quarter, ready mix concrete (RMC) revenue grew by 50% YoY and premium products contributed to 18.8% of trade sales volume. The company’s consolidated net debt reduced to INR 7,722 crore in Q3 from INR 8,357 crore sequentially.