Promoters cut their holding by 80 basis points in the company
UltraTech Cement, part of Aditya Birla group of companies and India's largest cement maker, has beaten street's expectations and posted better than expected profits for the quarter ended 31 December. Thanks to the softening of imported coal prices that the company didn't slip deep in the negative territory.
At a time when sector's analysts estimated net profits to decline by over 10%, Birla's firm witnessed a much lesser fall in profitability of 2.6% (year-on-year) basis at Rs 601 crore compared with Rs 617 crore in the previous corresponding quarter. Sector analysts had estimated UltraTech to report poor net profits at around Rs 500-530 crore.
The company's net sales during the quarter were up 6.4% at Rs 4,857 crore which was poorer than analysts' estimates. Experts' had estimated net sales to stand above Rs 5,000 crore mark. During the period, company's promoters pruned their holding by 80 basis points to 62.01% from 62.81% during the July-September quarter.
The quarter was a tough one for the cement industry in terms of poor demand and poor price realisation for significant part of the quarter. After hitting Rs 300 for a bag of 50 kg in third week of October post-monsoon, cement demand could not pick up on the back of festive season which resulted into low off-take of the building material; thereby putting pressure on prices which slipped 10% to Rs 270 on an average across the country.
UltraTech, which has 52 million tonne of capacity (among world's top ten cement giants), could not push its sales. According to the company, it remained flat at 9.62 million tonne against 9.61 million tonne in the previous year.
"On the cost front, year on year raw materials and logistics cost were mainly impacted due to increase in railway freight and hike in diesel prices. The benefit of softening in coal prices was partly offset by the depreciation in rupee," said company in a statement.
In its outlook, Birla firm maintain that with some positive economic sentiments, the long term demand is likely to see an 8% growth with housing, infrastructure and allied spending being the key value drivers.
But the company was quick to add that the surplus scenario is expected to continue over the next three years, input costs are likely to increase in line with general inflation with margins remaining range-bound.
On the Bombay Stock Exchange, shares of UltraTech closed flat on Friday at Rs 1,909.75.
After they together paid Rs 12 lakh to settle charges related to alleged delay in amending insider trading norms