UltraTech Cement drops after poor Q2 results

UltraTech Cement lost 2.49% to Rs 1,914.70 at 9:16 IST on BSE after net profit fell 52% to Rs 264 crore on 4.19% decline in net sales to Rs 4502 crore in Q2 September 2013 over Q2 September 2012.

The Q2 result was announced on Saturday, 19 October 2013.

Meanwhile, the S&P BSE Sensex was up 57.56 points or 0.28% at 20,940.45.

On BSE, 5,937 shares were traded in the counter as against average daily volume of 8,667 shares in the past two weeks.

The stock hit a high of Rs 1,930 and a low of Rs 1,872 so far during the day.

UltraTech Cement's profit before interest, taxation, depreciation and amortization (PBITDA) fell 33.36% to Rs 717 crore in Q2 September 2013 over Q2 September 2012.

The combined domestic cement and clinker sales remained unchanged on year on year basis at 9.1 millon tonnes (MnT) in Q2 September 2013. Sales volume of white cement and wall care putty rose 15.06% to 2.75 lakh metric tonnes (LmT) in Q2 September 2013 over Q2 September 2012.

UltraTech Cement said that the results for the quarter were adversely impacted mainly due to lower selling prices and subdued demand. Cement demand remained sluggish on account of prolonged monsoon and low off take from the infrastructure and housing sectors, UltraTech Cement said in a statement. The benefit of softening in prices of imported coal was negated by the devaluation of the rupee. Logistics and raw material costs continued to rise given the high diesel prices, UltraTech Cement said. However, optimization of the fuel mix helped in curbing power and fuel cost to some extent, the company added.

The company's capital expenditure plans are progressing on schedule. During the quarter, the company commissioned a 25 megawatts (MW) thermal power plant (TPP) at Rajashree Cement in Karnataka. The company's 1.6 million tonne per annum (mtpa) cement mill at Jharsuguda in Odisha went on stream this month, the company said.

With regard to future business outlook, UltraTech Cement said the outlook continues to remain challenging. Cement demand growth in FY 2014 is likely to be around 5%, though in the long term growth is likely to be over 8%. The key demand drivers will continue be housing and infrastructure spends, UltraTech Cement said.

UltraTech Cement is a leading cement manufacturer in India.

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