UltraTech Cement trades firm on strong operational performance in Q2

The company's consolidated net profit more than doubled at Rs 1,234 crore in Q2FY21, against Rs 579 crore in Q2FY20.

Shares of UltraTech Cement moved higher by 2 per cent to Rs 4,636 on the BSE on Wednesday, after the company reported robust operating margins at 27 per cent in July-September quarter (Q2FY21), driven by both revenue growth and cost management.

The stock has rebounded 4.4 per cent from its intra-day low of Rs 4,440 on the BSE. In comparison, the S&P BSE Sensex was trading flat at 40,553 points at 02:56 pm.

UltraTech’s consolidated net profit more than doubled at Rs 1,234 crore in Q2FY21, as against Rs 579 crore in Q2FY20. Net sales however, grew a modest 1 per cent to Rs 10,231 crore from Rs 9,486 crore in the corresponding quarter of the previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin improved to 27.7 per cent from 21.8 per cent.

EBITDA/tonne improved 30 per cent year on year due to benefit of cost rationalisation initiatives taken by the company in the previous quarter. Analysts expected EBITDA/tonne to improved 23.5 per cent YoY during the quarter.

“The Company’s strong quarterly performance is on the back of operational efficiencies and its ability to serve all India markets. For the second quarter in a row, the Company has reduced net debt substantially,” UltraTech Cement said in a press release.

"Going forward, the Company’s capital and financial resources remain entirely protected and its liquidity position is adequately covered. UltraTech expects demand for cement to grow on the back of Governments thrust on infrastructure and the expanding rural economy. The recent policy measures announced by the Reserve Bank of India to support the real estate sector will also aid demand," it said.