UltraTech Cement Q3 results: Net profit up 8% to Rs 1,708 cr on one-time gain

UltraTech Cement on Monday reported an 8 per cent year-on-year (YoY) rise in its consolidated net profit for October-December quarter at Rs 1,708 crore on the back of a one-time gain of Rs 535 crore in tax for earlier years. The cement company had posted a net profit of Rs 1,584 crore in the corresponding quarter of previous year.
 
The Aditya Birla Group company said it reversed accumulated provision for tax amounting to Rs 323.35 crore during the quarter under review, while it also accrued Minimum Alternate Tax credit entitlement of Rs 211.86 crore. Excluding the one-time gain, net profit stood at Rs 1,173 crore.
 
Net sales during the quarter grew 5 per cent to Rs 12,710 crore from Rs 12,144 crore during October-December 2020. The earnings before interest, tax, depreciation and amortisation (EBITDA) declined 26 per cent to Rs 2,490 crore.
 
Its volume grew 13 per cent during the nine-month period from April-December. However, it declined 3 per cent to 23.13 million tonnes during December quarter.
 
"After gaining pace in October 2021, demand slowed down substantially in November, 2021 as a result of the construction ban in the NCR, extended monsoons in the south and a few states in the north, sand issues in the eastern region as well as in parts of Uttar Pradesh, and the Diwali holiday season," the company said in a statement.
 
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On the cost front, UltraTech Cement said that while pet coke and international coal prices have started softening during this quarter, the prevailing rates are still at elevated levels YoY. Besides, despite the recent reduction in duty and other levies by the Centre and state governments, diesel prices are up 24 per cent YoY.
 
"During the quarter, the company repaid loans amounting to Rs 3,459 crore. The repayments were funded through internal accruals and have reduced the company's exposure to floating interest rate," it said.
 
The cement manufacturer's board has also approved capex of Rs 965 crore for modernisation and expansion of capacity at Birla White from the current 6.5 lakh tonnes per annum (LTPA) to 12.53 LTPA.
 
"The incremental capacity will be operational in a phased manner. The capacity expansion will help Birla White strengthen its presence in the growing white cement market, reducing its dependence on high-cost imports," the company said.
 
On the outlook, it said that with the onset of the peak season and rising construction activities, cement demand is expected to revive in the January-March quarter, driven by a pick-up in the government-led infrastructure and housing projects. "Rural and urban demand is also expected to pick up going forward. All of this augur well for the company."
 
Shares of UltraTech Cement were trading 1.59 per cent higher at Rs 7,777 on the BSE during the afternoon trade.

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