Aditya Birla Group's cement subsidiary UltraTech Cement more than doubled its net profit during the quarter ended December 31, 2021. The recovery from COVID-19-led disruption came on the back of quicker demand stabilisation, supply-side restoration and greater cost efficiencies. The cement major reported consolidated net profit of Rs 1,584.34 crore during the quarter under review, rising 123 per cent as opposed to Rs 711.84 crore seen in the year-ago period.
Revenue from operations increased 17 per cent to Rs 12,254.12 crore during December quarter his month, against Rs 10,439.34 crore in the corresponding quarter last fiscal. Net sales increased 18 per cent during this period to Rs 12,144 crore from Rs 10,261 crore.
"Recovery from the COVID-19 led to the disruption of the economy. This has been fuelled by quicker demand stabilisation, supply-side restoration and greater cost efficiencies," UltraTech Cement said in a stock exchange filing.
"While rural and semi-urban housing continues to drive growth, pick-up in the government-led infrastructure aided incremental cement demand. Pent-up urban demand is expected to improve with the gradual return of the migrant workforce," it further added.
Despite fuel prices rising in recent months, the company reported an operating margin of 28 per cent because of operational efficacies and tight control over costs. Profit before interest, depreciation and tax (PBIDT) for the quarter under review was Rs 3,362 crore, up from Rs 2,147 crore in the same quarter last fiscal.
During the quarter, UltraTech's board approved capital expenditure of Rs 5,477 crore towards increasing capacity by 12.8 mtpa (million tonnes per annum) with a mix of brownfield and greenfield expansion in the east, central and north regions of the country.
"This expansion is in addition to company's 6.7 mtpa capacity addition that is currently underway in Uttar Pradesh, Odisha, Bihar and West Bengal, which has picked up the pace and is expected to get commissioned by financial year 2022, in a phased manner," it said.
Upon completion of this latest round of expansion, the company's capacity will grow to 136.25 mtpa, reinforcing its position as the third-largest cement company in the world, outside of China, the UltraTech Cement said.
Over the outlook, the company said, "With strong rural growth, revival in manufacturing sentiment, buoyancy in GST and tax collections, UltraTech expects demand to grow on the back of the government's push on infrastructure projects."