UltraTech Cement, an Aditya Birla Group company, has reported a drop of 42 per cent in September quarter net profit at ₹756 crore against ₹1,314 crore logged in the same period last year, on back of lower realisation and higher cost.

Revenue from operations increased 16 per cent to ₹13,893 crore (₹12,017 crore). Cement and value added product production increased seven per cent to 23 million tonne (mt).

Overall expenses increased 27 per cent to ₹12,934 crore (from ₹10,209 crore) on 58 per cent jump in energy cost at ₹1,731 per tonne, while raw material prices were up 18 per cent at ₹610 a tonne on higher fly ash, slag and gypsum prices. Elevated logistics expenses increased further by two per cent at ₹1,239 a tonne.

Ebitda dipped 29 per cent to ₹2,013 crore (₹2,855 crore) while Ebitda per tonne was down at ₹819 (₹1,253).

Net debt increased to ₹8,357 crore from ₹5,561 crore in June quarter, primarily on account of increase in working capital and growth capex.

Demand weak

Demand in the quarter under review was weak due to monsoon slowing down construction activity in most part of the country. Capacity utilisation at 76 per cent as against 71 per cent during Q2 FY22.

The company has commissioned 5 MW of waste heat recovery system in the quarter and green power contributes 19 per cent of the total power requirement.

UltraTech commissioned 1.3 mtpa brownfield expansion in September quarter and will add another 15.4 mtpa capacity in second half of this fiscal taking its overall capacity to 131 mtpa by March-end.

Work on the second phase of growth of 22.6 mtpa has already commenced and commercial production is expected to go on stream in a phased manner by FY25.

To grow further

Upon completion of the latest round of expansion, UltraTech capacity will grow to 159 mtpa, reinforcing its position as the world’s third largest cement company excluding China.

Given the government’s focus on infrastructure spending and affordable housing, the cement sector’s long-term growth potential continues to remain healthy. Demand revival is imminent, especially during the festive season and the peak construction period in March quarter, said the company.

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