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UltraTech Cement, an Aditya Birla Group company, reported that its net profit was down 16 per cent in the March quarter at Rs 726 crore, due to lower demand and high operational cost.
Cement production
The company’s cement production during the quarter was flat at 11.13 million tonne (11.54 mt), while white cement production was down four per cent at 1.56 lakh tonne (1.63 lt).
The Board has recommended a dividend of Rs 9, leading to an outgo of Rs 289 crore.
UltraTech will invest Rs 2,000 crore to expand production capacity by 2.9 mt in Rajasthan with two grinding units. With the commissioning of this project and other ongoing projects, the company expects production capacity to touch 61.45 mt by March 2015.
K.C. Birla, Senior Executive President and CFO, UltraTech Cement, said the company has managed to reduce the impact of higher imported coal cost by using more petcoke available in the domestic markets.
“The benefit of 20 per cent fall in the international coal prices was marginally eroded by a nine per cent rupee depreciation against the dollar in the quarter. The change in fuel mix helped us bring down the power and fuel cost to Rs 1,056 crore (Rs 1,184 crore) in the quarter,” he said. The freight and forwarding cost was up by 10 per cent at Rs 1,196 crore (Rs 1,091 crore). The company also incurred a cost of Rs 87 crore on additional deferred tax consequent to an increase in surcharge on income tax.
Though cement demand was up just four per cent in the March quarter, it is expected to recover with the Government rushing to complete pending projects in 13 States with elections round the corner, said Birla.
Mihir Jhaveri, Vice-President, Religare Institutional Research, said despite lower volumes, realisations have jumped five per cent to Rs 4,775 a tonne.
The company has increased its production capacity by about two million tonne to 50.90 million tonne (48.75 mt) with the completion of various projects at its existing facilities.
Clinker plant
It commissioned a clinker plant of 3.3 mt at Rawan in Chhattisgarh and a grinding unit of 1.55 mt at Hotgi in Maharashtra, besides increasing capacity by 0.06 mt in Gujarat.
A clinker plant of 3.30 mt will go on stream in the June quarter, it said.
Shares of the company was down three per cent at Rs 1,879 on Monday.
suresh.iyengar@thehindu.co.in
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