UltraTech Cement, an Aditya Birla Group company, has reported 38 per cent fall in the third quarter net profit to Rs 370 crore (Rs 601 crore) on weak demand and fall in realisation.
Sales were down marginally at Rs 4,786 crore (Rs 4,857 crore).
The company’s cement and clinker sales were flat at 9.7 million tonnes (9.62 mt), while that of white cement and wall care putty’s were up 10 per cent at 289,000 tonnes (262,000 tonnes).
Despite a flattish cement production, the company’s total expenses were up 5 per cent to Rs 4,286 crore (Rs 4,071 crore) due to higher freight cost, which increased 6 per cent to Rs 1,119 crore.
Terming last year as tough period for the entire industry, O.P. Puranmalka, Whole-Time Director, said the overall demand for cement was impacted on account of poor demand from the infrastructure and housing sectors.
“The subdued demand resulted in lower selling prices. The ongoing cost optimisation measures helped us contain the impact of higher input and logistics costs” he said.
As part of its effort to contain cost, UltraTech Cement commissioned a 25-MW thermal power plant at its cement plant in Andhra Pradesh during the December quarter.
Jaypee unit buy The company informed that the Competition Commission of India has approved the Rs 3,800-crore deal to buy the Gujarat unit of Jaypee Cement Corporation during the quarter under review. The company will now seek shareholders, creditors and High Court sanction to amalgamate the 4.8-million-tonne asset with itself, it said.
Rikesh Parikh, Vice-President, Motilal Oswal Securities, said demand failed to recoup, despite the fact that the December quarter is considered a strong period for the entire industry. The adverse impact on the cement sector may continue with the housing and infrastructure sectors facing issues over sand mining, he added.
“The outlook continues to remain challenging. However, in the long-term demand growth is expected at about 8 per cent with spends on infrastructure and housing driving the growth,” said the company.
The shares were up 0.27 per cent at Rs 1,721.
suresh.i@thehindu.co.in