UltraTech Cement Q2 net profit rises marginally to Rs 1,314 cr, revenue up 14%

UltraTech Cement Ltd on Monday reported a marginal 0.3 per cent year-on-year (YoY) rise in its consolidated net profit for July-September quarter at Rs 1,314 crore, hit by rising energy cost.   The cement maker's revenue rose 14 per cent to Rs 11,743 crore on the back of an 8 per cent increase in cement volume to 21.64 million tonnes.   While volume grew in north, west, and southern region of the country, it was flat in central India. Cement volume declined in the eastern region of the country during the quarter under review as housing segment witnessed degrowth due to rains and Covid-19-related restrictions, while Odisha was affected by cyclone.   The Aditya Birla Group company's earnings before interest, tax, depreciation and amortisation (EBITDA) grew by only 1 per cent to Rs 2,855 crore as energy cost increased 17 per cent YoY to Rs 1,099 per tonne, while logistics cost grew 7 per cent YoY to Rs 1,219 per tonne. Besides, raw material cost also grew 3 per YoY to Rs 518 per tonne.  Also Read: Now a mutual fund for crypto investors! Mudrex announces Coin Sets for retail investors

"Coal and pet coke prices nearly doubled in Q2 FY22 resulting in energy cost rising 17 per cent YoY. The resulting impact on the company's operations were partly offset by reduction in power consumption and continuing focus on operational efficiencies," UltraTech Cement said in a release.   The company said it expects to commence mining operations at its Bicharpur coal block in Madhya Pradesh during October-December quarter which will help in reducing the dependence on coal purchases.   UltraTech Cement said it commissioned additional cement capacity of 0.6 million tonnes per annum (mtpa) each at Patliputra Cement Works in Bihar and Dankuni Cement Works in West Bengal during October. With this expansion, the capacity of Patliputra Cement Works stands at 2.5 mtpa, while it is 2.2 mtpa for Dankuni Cement Works.   "This additional capacity will help UltraTech to service the fast-growing cement demand in the eastern markets. UltraTech's total cement manufacturing capacity in India has now increased to 112.55 mtpa," it said.   On outlook, the company said that recovery in rural housing, higher MSP (minimum support price) for kharif crop, improved food grain production in rabi harvest, a third consecutive normal monsoon, and pick-up in infrastructure-led construction activity are likely to drive cement demand offtake.   While increasing input costs of coal, pet coke and diesel are a challenge, the company said it is confident of "weathering the storm" with its sustainable efficiency improvement programs, accompanied by increase in selling prices to absorb the increase in costs.

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