UltraTech Cement Q1 Results: Profit falls 7% YoY to Rs 1,582 crore but beats estimates.
UltraTech Cement reported net profit of Rs 1,582 crore for Q1FY23, 7.45% YoY lower than Rs 1,700 crores. However, the net profit managed to beat analyst expectations of Rs 1,214 crore. The bottom line fell by 35.6% QoQ from Rs. 2460.5 crores.
UltraTech’s revenue was higher by 28.2% YoY in the June quarter at Rs 15,163.98 crore as against Rs 11,829.84 crore reported in Q1 FY22. Revenue figure also managed to beat the Street as an ET NOW poll had estimated the figure at Rs 14,238 crores. The top line was down by 3.8% on a QoQ basis.
The company achieved capacity utilisation of 83% as compared to 73% during the quarter. Domestic sales volume increased by 19% YoY basis. The demand for cement was affected due to overall inflationary trends and lower labour availability in May 2022. However, the demand for cement grew in June 2022 on pre-monsoon construction activity.
The June quarter witnessed volume growth of 17% YoY and revenue growth of 34% YoY. The raw material cost increased 13% YoY. Domestic sales volume improved by 19% on a year-on-year basis.
The volumes saw strong traction over the low base of last year and the price hikes taken by the company enabled improvement in realizations which increased revenue growth. The profitability is affected by the rise in power and fuel costs.
Ultratech’s consolidated cement sales volume grew by 16.3% YoY to 25.04 MT in Q1FY23 led by healthy demand across segments like road infrastructure, realty and metro projects. Capacity utilization stood at 83% in Q1FY23 against 90% in Q4FY22. Blended realisations grew 10.2% YoY/6.4% QoQ to INR 6,056/ton as company took price hikes in key markets. Prices in Q1FY23 has gone up in double digits in Central/North, 5-6% in East/West and was flat in South.
The other income for the quarter slipped by 47% at Rs 108.7 crores as compared to Rs 205 crores in Q1 FY22. The other income during the March quarter was lower at Rs 92.4 crore.
The rise in the pet coke and crude prices resulted in a significant surge in the power & fuel cost for the company which jumped 595 bps compared to 26.5% as percentage of revenue in Q1 FY22. Compared to the March quarter, the cost of power & fuel is higher by 130 bps.
Other expenses increased by 24 bps to 12.2 percent of total revenue. The company saved on the costs of employees and freight & forwarding costs which decreased 74 bps and 69 bps respectively in Q1 FY22. The employee cost as percent of revenue increased by 22 bps while freight fell by 36 bps OoQ.
EBITDA declined by 6.4% YoY to Rs. 30,94.9 crores due to higher input cost. Though on QoQ basis EBITDA saw a marginal growth of 0.7%. EBITDA margin contracted by 755 bps YoY to 20.4%, though on QoQ basis margin expanded by 92 bps. Margin contraction on YoY basis was mainly due to 65.3% YoY rise in Power & Fuel costs along with 57.4% YoY higher raw material costs and 24.3% YoY higher logistics costs.
EBITDA margin contracted by 755 bps YoY to 20.4%, though on QoQ basis margin expanded by 92 bps. Margin contraction on YoY basis was mainly due to 65.3% YoY rise in Power & Fuel costs along with 57.4% YoY higher raw material costs and 24.3% YoY higher logistics costs. EBITDA/ton saw a decline of 19.6% YoY to INR 1,236, though on QoQ basis it grew by 11.4% as pet coke and fuel prices started softening from their peak.
The shares of the company are currently trading at Rs. 6539.90, up by 141.20 points or by 2.27% as compared to the previous closed at Rs. 6399.35. The stock opened at Rs. 6390.30. The market cap of the company is Rs. 189,000 crores.
