UltraTech Cement’s Shares Dip 2% After Profits Drop 36% in Second Quarter

Aditya Birla Group-owned UltraTech Cement’s shares nosedived nearly 2 per cent after the cement manufacturer released its earnings for the second quarter of the financial year 2024-25 on Monday, October 21.  

UltraTech reported profit after tax (PAT) of Rs 820 for the second quarter of FY25, down 36 per cent from Rs 1,281 crore in the year-ago period.  

The consolidated net sales dipped 2.7 per cent from Rs 15,735 crore in Q2FY24 to Rs 15,308 crore in Q2FY25. Its earnings before interest, tax, depreciation and amortisation (EBITDA) decreased from Rs 2,550.89 crore in Q2FY24 to 2,018.27 crore in Q2FY25. 

The shares of the company rose by nearly 13 per cent in the past six months and around 30 per cent compared to the last financial year. 

The cement manufacturer achieved capacity utilisation of 68 per cent during the quarter ending on September 30. Domestic sales volume grew 3 per cent on a year-on-year basis despite heavy monsoons during Q2. The energy cost came down by 14 per cent on a YoY basis while raw material costs rose by nearly 1 per cent. 

UltraTech’s Efforts for Sustainable Cementing 

Earlier in August, the company raised $500 million through a sustainability-linked loan to enhance its environment conversation measures. The loan was raised with the participation of six banks, including the State Bank of India, Mizuho, BNP Paribas, DBS, MUFG and SMBC. 

“UltraTech successfully raised $500 million through a sustainability-linked with participation from six banks. The financing signifies the ongoing commitment to align the company’s funding strategy with its sustainability and ESG goals,” said the company in a statement. 

India’s growing housing demand makes the role of UltraTech, the largest cement manufacturer in the country more significant. Additionally, the increase in government spending on the infrastructure sector has resulted in rising demand from the urban housing sector, which is currently projected to grow at around 7-8 per cent in the coming years. To capitalise on this the company will expand its operation. 

“UltraTech’s ambitious capacity expansion capitalises on the substantial long term growth potential of India’s cement sector. Its growth trajectory aligns closely with India’s broadergrowth story. By increasing its scale, the Company will meet the rising demand for cement nationwide,” the company said in a statement.