Shares of the cement major surged 6.16% to Rs 4096.80 after the company's consolidated EBITDA margin rose 400 bps to 31% in Q1 FY21 from 27% in Q1 FY20.The firm reported 38% drop in its consolidated net profit in the June quarter to Rs 797 crore in Q1 June 2020 as against Rs 1281 crore reported in the same period last year. Revenues (net of taxes) declined 33% year-on-year (YoY) to Rs 7563 crore in in the first quarter of the financial year 2020-21 (FY21).
EBITDA fell 24% to Rs 2353 crore in Q1 June 2020 from Rs 3084 crore in Q1 June 2019. Profit before tax in Q1 FY21 stood at Rs 1314 crore, down by 31% from Rs 1893 crore in Q1 FY20.
Ultratech Cement recorded an exceptional expenditure of Rs 108 crore (net of tax) consequent to an order passed by the Supreme Court of India against the company's claim of capital investment incentive, relating to past periods.
The company managed the COVID-19 crisis with a sharp focus on operational efficiencies. In the available 68 operating days during this quarter, the company kept a tight control on costs and cash flow, and achieved an effective capacity utilisation of 60% across its network of 54 plants around the country.
"General disruption as a result of the lockdown did impact business performance, But with the Government of India and the State Governments taking measured steps towards opening up the economy, some encouraging trends were seen during the latter part of May, 2020, driven largely by better than expected pick-up in cement consumption in the rural markets", Ultratech Cement said in a statement.
The company's focus on conserving cash continued unabated. The "overheads control programme" initiated by the management cut fixed costs by 21% YoY. Prudent working capital management and control on cash flows are reflected in a reduction of net debt by Rs. 2,209 crores during Q1FY21.
The company is closely monitoring the impact of COVID-19 on its operations. Its capital and financial resources remain entirely protected and its liquidity position is adequately covered. Most importantly, the company continues to remain committed to all its business associates.
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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