UltraTech: Operating performance disappoints

Better cement demand, turnaround of acquired assets should help the firm

UltraTech’s December 2017 quarter (Q3) performance bore the brunt of rising costs, lower realisations and integration of cement capacities acquired from Jaypee group, thereby leading to disappointments on the profitability front.
 
Even though cement sales volumes at 15.1 million tonnes (mt), up 37 per cent year-on-year (y-o-y) and 22 per cent sequentially (helped by market share gains and acquisition of Jaypee assets), look impressive and drove revenues by 33.3 per cent y-o-y, average realisations were short of the Street’s expectations.
 
Analysts peg average realisations at Rs 4,161 a tonne, up just a per cent y-o-y, and lower by