UltraTech Q3 net up 7.8% YoY at Rs 1,708 cr on tax credits, better sales

UltraTech Cement reported a consolidated net profit of Rs 1,708 crore in the December quarter, up 7.8 percent from corresponding period last year on the back of tax credits and marginal increase in net sales.

Net sales of the Aditya Birla Group company stood at Rs 12,985 crore in the period under review, up 5.8 percent from last year.

As per Bloomberg estimates, the company’s top line was seen at Rs 12,985 crore, while the bottom line was expected to be at Rs 1,494 crore in quarter ended December.

The company’s profit before interest, depreciation and taxes stood at Rs 2,490 crore in the period under review, down 26 percent from same period last year high input material cost and fuel prices ate into the earnings of the company.

A credit of deferred and current taxes, however, cushioned the bottomline to some extent leading to a year-on-year rise for the same. There is a one-time gain of Rs 535 crores in tax for earlier years, said the company release.

During the quarter the company repaid loans amounting to Rs 3,459 crore. The repayments were funded through internal accruals and have reduced the company’s exposure to floating interest rate, it said.

The company has, yet been able to maintain a strong growth trajectory, recording a 13.2 percent growth in its domestic cement sales volumes in the nine months ended December, 2021, despite a marginal de-growth in the reported quarter.

On the cost front, pet coke and international coal prices have started softening during this quarter, though the prevailing rates are still at elevated levels year-on-year. Diesel prices are up 24 percent per cent year-on-year, despite the recent reduction in duty/other levies by the Central/State Governments, said the release.

The board has approved capex of Rs 965 crore towards modernisation and expansion of capacity at Birla White from the current 6.5 lakh tonne per annum (LTPA) to 12.53 LTPA, in a phased manner.

The capacity expansion will help Birla White strengthen its presence in the growing white cement market, reducing its dependence on high-cost imports, said UltraTech.

With the onset of the peak season and rising construction activities, cement demand is expected to revive in Q4FY22, driven by a pick-up in the government-led infrastructure and housing projects. Rural and urban demand is also expected to pick up going forward. All of this augur well for the company, it said.