Ultratech Cement firms up after Q3 PAT jumps 79% to Rs 712 cr

Ultratech Cement rose 0.98% to Rs 4574 after the cement major reported Q3 December 2019 results during trading hours today, 24 January 2020.

On consolidated basis, Ultratech Cement's net profit jumped 79.80% to Rs 712 crore in Q3 December 2019 as against Rs 396 crore reported in Q3 December 2018. Net sales declined 1.15% to Rs 10,176 crore on YoY basis.

Under the Sabka Vishwas (Legacy dispute Resolution) Scheme 2019, announced by the Government of India, the company has provided a one-time expense of Rs 133.23 crore as part of other expenses, against various disputed liabilities.

Profit before tax (PBT) stood at Rs 997.43 crore in Q3 December 2019, up by 68.89% from Rs 590.59 crore in Q3 December 2018. Profit before Interest, Depreciation and Tax (PBIDT) stood at Rs 2141 crore in Q3 December 2019 as against Rs 1707 Q3 December 2018, rising by 25.42%.

In its outlook, the company said that signs of revival were visible in some markets during the latter part of Q3FY20. This, together with the government's firm commitment to revive the economy and the thrust on infrastructure spending augur well for the growth of cement demand. UltraTech, with its presence across all the zones in the country, is the best positioned to take advantage of the revival in cement demand, despite the anomalies that may get created in demand patterns in some parts of the country due to extraneous reasons.

The scheme of demerger for acquiring the cement business of Century Textiles and Industries became effective from 1 October 2019. The company's financials were restated from 20th May 2018, to include the financials of the acquired Century cement business, in terms of the National Company Law Tribunal, Mumbai Bench, sanctioning the Scheme of Demerger.

The plants have been ramping up production month on month touching a capacity utilisation of 79% in December 2019. The company has put in place a cost reduction plan to bring the operations in line with its existing standards. 55% of sales from the Century plants in December were under Ultra Tech brand. Brand integration is underway and is expected to reach 84% by Q2FY21. The overall integration s likely to be completed by end of Q2FY21. Given its vast experience in integrating acquired units and bringing them up to its operating standards, the company is confident on replicating the same at the acquired Century cement plants.

UltraTech Cement manufactures a range of products that cater to construction needs from foundation to finish, including Ordinary Portland Cement (OPC), Portland Blast Furnace Slag Cement (PSC), Portland Pozzolana Cement (PPC), white cement including white cement-based products and ready mix concrete.

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