EconomyResults
UltraTech Cement's profit rises 21% on new plants, but shares slip from the day's high
India's largest cement maker sold 13.8% more cement in a monsoon quarter and earned ₹1,494 crore. Higher fuel and raw material bills kept margins flat.
Key points
- UltraTech's consolidated net profit rose 21.3% to ₹1,493.77 crore in the September quarter.
- Domestic grey cement sales grew 13.8% to 35.94 million tonnes, with plants running at 71% of capacity.
- The shares fell about 5% from the day's high after the numbers came out.
UltraTech Cement, the country’s largest cement maker, reported a 21.3% rise in September-quarter profit on Monday as new plants helped it sell more cement through the monsoon months. Investors were less impressed, and the shares gave up their morning gains.
Consolidated net profit attributable to shareholders rose to ₹1,493.77 crore from ₹1,231.58 crore a year earlier. Revenue from operations grew 18.8% to ₹23,295.07 crore. Earnings per share rose to ₹50.78 from ₹41.87.
Volumes carry the quarter
The growth came mainly from volume. UltraTech sold 35.94 million tonnes of grey cement in India, 13.8% more than a year ago, and its plants ran at 71% of capacity against 66%.
“This came from new plants, a wider market reach and more sales of premium products,” said Akshay Shetty, research analyst at Mirae Asset Sharekhan, who described the quarter as steady despite disruption from the monsoon.
Costs rose almost as fast as sales. Power and fuel spending went up 24% to ₹5,511 crore and raw materials 24.4% to ₹4,208 crore, while freight rose 16.5%. As a result operating margins were roughly unchanged from a year earlier. Profit was also 42.5% lower than in the April-June quarter, which is usually the strongest of the year for cement.
More capacity, and a new business
During the quarter UltraTech commissioned a 3.6 million tonne a year integrated plant at Petnikota in Andhra Pradesh and added 1 million tonnes through debottlenecking at Visakhapatnam, Patratu and Nathdwara. Its domestic capacity now stands at 204.7 million tonnes a year, and 210.1 million tonnes including overseas plants. The company said it remains on track to cross 240 million tonnes by March 2028.
It has also started its Ultravolt wires and cables business, with a factory at Jhagadia in Gujarat. On the energy side, a 116.55 MW wind project in Barmer, Rajasthan, took its captive green power capacity past 2 GW, which the company says now meets about 48% of its power needs.
How the stock reacted
UltraTech had been one of the Sensex’s best performers in the morning, rising more than 2%. After the results it reversed sharply, falling from a high of ₹11,219 to as low as ₹10,626 on the NSE, and was trading 1.9% lower at ₹10,702 at 2:20 pm. The stock is close to its 52-week low of ₹10,325.