UltraTech Cement, an Aditya Birla Group company, reported a 47 per cent increase in net profit increased in the September quarter to ₹416 crore (₹283 crore) on higher demand, additional volume from the recently acquired five million tonne plant of Jaypee Cement in Gujarat and a lower base in the corresponding period last year. The net sales of company improved 18 per cent to ₹5,723 crore (₹4,849 crore).
The company’s cement production was up at 10.35 million tonnes (mt) against 9.22 mt while white cement and wall care putty output increased to 3.02 lakh tonnes (2.94 lakh tonnes).
Despite higher production, high cost impacted profitability of the company. Power and fuel bill went up by 19 per cent to ₹1,247 crore against ₹1,049 crore in the same period last year. Freight cost was up 30 per cent to ₹1,298 crore (₹1,000 crore).
In a sign of relief, major production costs have come down when compared on a sequential basis due to fall in the international commodity prices. UltraTech Cement meets a major portion of its coal demand through imports. Power and freight cost was down three per cent each when compared to ₹1,291 crore and ₹1,333 crore incurred in the June quarter.
The finance cost was up 54 per cent at ₹153 crore (₹99 crore) as the company is planning to increase in installed capacity to 70 million tonnes per annum from 62 mtpa by 2016-end. The company has appointed Atul Daga as Chief Financial Officer in place of KC Birla from December.
During the quarter, the company has commissioned 1.4 million tonne of cement mill at Rajashree Cement in Karnataka and 25 MW thermal power plant at Tadipatri in Andhra Pradesh. With the new addition, UltraTech Cement’s production capacity in India stands at 60.2 million tonnes. The total power capacity is 733 MW, which caters to about 80 per cent of its power requirement.
The company expects the government to focus on housing and infrastructure spending to drive cement demand to eight per cent this fiscal.