UltraTech Cement, an Aditya Birla Group company, has reported a 22 per cent year-on-year increase in net profit in the first quarter of this fiscal on better realisations.
Sales were up 9 per cent. Cement and clinker sales were lower by 2 per cent at 9.46 million tonnes (9.61 mt), the company said in a press release on Wednesday.
The company's net profit was down 6 per cent when compared to the March quarter, while sales dipped 3 per cent.
Mr K.C. Birla, Chief Financial Officer, UltraTech, said imported coal has increased to $141 a tonne in the June quarter from $110 a tonne in the same period last year.
“Though people have talked about softening of coal prices, we have seen a fall of just $3-4 a tonne. Besides, the domestic coal prices have also gone up by 30 per cent, resulting in a substantial escalation in costs,” he said.
Cement demand has been hit in the quarter under review due to the onset of south-west monsoon.
“There is a huge uncertainty on the demand front. We do not see a revival unless and until the Government revives infrastructure spending in large scale,” he said.
The surplus situation is likely to continue over the next two to three years resulting in the selling prices remaining under pressure. With commodity prices rising, input costs will be affected, which will squeeze margins, he said.
The company plans to invest Rs 11,000 crore over the next three years in setting up clinker plants in Chhattisgarh and Karnataka together with additional grinding units, installing waste-heat recovery systems, instituting bulk packaging terminals and setting up of ready-mix concrete plants. These expansions to be funded through internal accruals are expected to be operational by the first quarter of FY'14 and will enhance the company's cement capacity by 9.2 mtpa to 61.2 mtpa.
The company's shares on BSE were up 3 per cent at Rs 1,028 on Wednesday.