‘Demand growth was largely supported by government spending and an improved outlook for the real estate industry’
‘Demand growth was largely supported by government spending and an improved outlook for the real estate industry’
Aditya Birla group firm UltraTech Cement Ltd. on Friday reported a decline of 6.94% in its consolidated net profit to ₹ 1,582.02 crore in the June, impacted by inflationary trends.
The company had posted a net profit of ₹1,700.03 crore in the April-June period a year ago, UltraTech Cement said in a BSE filing.
Its revenue from operations was up 28.18% to ₹15,163.98 crore during the quarter under review as against ₹11,829.84 crore in the corresponding period of the last fiscal.
“After a strong end to FY22, cement demand was impacted by overall inflationary trends and lower labour availability in May 2022. However, cement demand picked up in June 2022 on pre-monsoon construction activity,” said UltraTech Cement in its earnings statement.
In Q1 FY23 UltraTech’s consolidated sales volume was 25.04 million metric tonnes during the quarter, registering a 16% growth year-on-year.
“The company achieved capacity utilisation of 83% as against 73% during Q1 FY22. Domestic sales volume grew 19 per cent on a year-on-year basis,” said UltraTech.
According to the company, all segments indicated a positive demand environment.
“Demand growth was largely supported by government spending and an improved outlook for the real estate industry,” said UltraTech in its investors’ presentation.
UltraTech Cement’s total expenses were at ₹12,980.06 crore, up 36.51% in Q1 FY23 as against ₹9,508.26 crore.
Discussing about key cost indicators in Q1 FY23, UltraTech said its logistics cost during the quarter “increased 6% YoY to ₹1,253 per tonne”, while energy cost increased by 54% YoY to ₹1,573 per tonne due to an “increase in fuel prices”.
Raw material cost “increased 13% YoY to ₹577 per tonne” due to an increase in input cost and diesel prices, UltraTech added.
About its capital expenditure, UltraTech said its existing expansion programme is on track and estimated to be completed by the end of FY23.
“Work on further capex announced during the quarter has already commenced and commercial production from these new capacities is expected to go on stream in a phased manner by FY25,” it said.
Upon completion of the latest round of expansion, the company’s capacity will grow to 159.25 MTPA, reinforcing its position as the third largest cement company in the world, outside of China, the earnings statement added.
Over the outllook, UltraTech said it expects an upswing in demand for the cement industry in FY23 despite inflationary pressures.
“While headwinds arising out of rising cost pressure could put some pressure on the profitability of cement companies, the strong momentum in housing and given the governments thrust on infrastructure and industrial development, the cement industry in India is set to see an upswing in demand in FY23,” the Aditya Birla group firm said.
