UltraTech Cement Q2 profit at Rs 825 Crore

UltraTech Cement Ltd on Monday reported a consolidated net profit of Rs 825.18 crore for September quarter 2024-25.

It had posted a net profit of Rs 1,280.38 crore in July-September FY24, according to a regulatory filing from the Aditya Birla group flagship firm.

Revenue from operations was at Rs 15,634.73 crore in the quarter. It was at Rs 16,012.13 crore in the corresponding period a year ago.

Total expenses were at Rs 14,837.44 crore in September quarter FY25.

According to UltraTech, its consolidated results are "not comparable" due to the acquisition of an additional stake, increasing its holding to 54.79 per cent in the UAE-based Ras Al Khaimah Co. for White Cement & Construction Materials PSC (RAKW).

“Consequently, RAKW has become a subsidiary of UCMEIL with effect from 10/07/2024. The above results include the financial results for RAKW w.e.f. 10/07/2024 and hence the figures for the three months and six months ended 30109/2024 are not comparable with the previous corresponding periods,” it said.

UltraTech Cement's total income, which includes other income was at Rs 15,855.46 crore.

On standalone basis, UltraTech Cement's profit from the domestic market was down 34.71 per cent to Rs 796.89 crore in the September quarter.

Similarly, its revenue from the domestic market was down 3.68 per cent to Rs 14,905.23 crore in the September quarter despite an increase in sales volume. This was at Rs 15,475.99 crore in the second quarter of FY 2023-24.

"UltraTech achieved capacity utilisation of 68 per cent during the quarter," said an earning statement from the company adding domestic sales volume of Grey Cement grew 3 per cent YoY to 25.75 Million Tonnes (MT) despite incessant rains throughout the country this season.

Despite this growth, UltraTech's sales "realisation declined 8.4 per cent yoy and 2.9 per cent qoq," as the cement industry is facing a decline in prices.

During the quarter, "UltraTech's energy costs were lower by 14 per cent YoY, while raw material costs rose 1 per cent on account of an increase in the cost of flyash and slag."

On a consolidated basis, UltraTech's sales volume was at 27.84 MT, which included 26.42 MT from India business and 1.66 MT from overseas units. Its exports were at 0.22 MT and 0.45 MT from white cement in the September quarter.

UltraTech Cement, which is on an expansion drive, has added a capacity 9.9 MT of grey cement till October in the current fiscal, in its total installed capacity which was at 146.2 MT by the end of FY24.

This excludes Kesoram’s Cement capacity of 10.75 MTPA and India's cement capacity of 14.45 MTPA, for which UltraTech is awaiting regulatory approvals.

UltraTech is expanding the capacity of its existing units and going for acquisitions as it faces competition from billionaire Gautam Adani-led Ambuja Cements, which is also pacing up capacity with acquisition and brownfield expansions.

"The capacity expansion drive is on a scale that is globally unprecedented in the cement sector. With the completion of the ongoing expansion projects across India by FY27, and receipt of statutory approvals for the acquisitions of Kesoram Cement (10.75 MTPA) and The India Cements (14.45 MTPA), UltraTech’s total cement capacity will surpass 200 MTPA," it said.

In July, UltraTech had announced acquisition of a 32.72 per cent stake from promoters and their associates in Tamil Nadu-based India Cements Ltd (ICL) for Rs 3,954 crore. It had also announced a Rs 3,142 crore open offer for acquiring 26 per cent share.

The Aditya Birla group firm also informed its expansion program is "progressing as per schedule", which will help reduce operational costs and help it to leverage its strong nationwide presence and distribution network.

Over the outlook, UltraTech said its growth trajectory aligns closely with India’s broader growth story.

"By increasing its scale, the company will meet the rising demand for cement nationwide. Increase in Government spending on infrastructure sector and rising demand from the urban housing sector is expected to generate a sustainable volume growth of 7-8 per cent in future years," it said.

Shares of UltraTech Cement were trading at Rs 10,840 apiece on BSE, down 2 per cent from the previous close.