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UltraTech Q3 Preview: Analysts eye QoQ rise in sales, profit on rising vol

Cement major, UltraTech Cement is scheduled to deliver its December 2024 quarter results (Q3FY25) on Thursday, January 23, 2025

UltraTech

Pranay Prakash New Delhi

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UltraTech Cement Q3 results: Brokerage firms expect earnings for cement companies to improve sequentially, but remain muted on an annual basis, in the quarter ended Decemer 31, 2024, on the back of higher cement prices and increasing volumes. According to a research note by Elara Capital, "The cement industry is poised for a sequential earnings recovery in Q3FY25, bolstered by the increase in cement prices and the positive impact of operating leverage. However, Y-o-Y, earnings may be subdued as cement prices are still ~8 per cent (approximately 8 per cent) lower than those previously".
  Separately, Nuvama Institutional Equities, says that while soft power and fuel prices are positives for the industry, an earnings downgrade for FY25E–26E is likely on the cards considering the volatile pricing environment and lower-than-expected volume growth in 9mFY25, amid aggressive capacity expansion in the industry. 
 
  In that backdrop, UltraTech Cement, one of the largest cement manufacturers in the country, is scheduled to release its December quarter results on Thursday, January 23, 2025. 
  
According to average estimates of four brokerage firms compiled by Business Standard, UltraTech Cement's revenues may rise 1.09 per cent year-on-year (Y-o-Y) to Rs 16,922.93 crore in Q3FY25, from Rs 16,740 crore in the year-ago period, and rise 8.24 per cent sequentially from Rs 15,634.7 crore in the previous quarter. 
  Brokerage firms expect the company to report profit after tax (PAT) at Rs 1,289.6 crore, down 27.34 per cent Y-o-Y, but rising 56.3 per cent quarter on quarter (Q-o-Q).
  The company's earnings before interest, tax, depreciation, and amortisation (Ebitda) is expected to come in at Rs 2,761.4 crore, falling 15.2 per cent Y-o-Y, and climbing 36.8 per cent Q-o-Q, according to an average of their estimates.
 
UltraTech Cement shares had climbed 2.42 per cent to touch an intra-day high of 10,881.20, ahead of the company reporting its results on December 23. 
  Here's what some key brokerages anticipate for UltraTech Cement's Q3FY25 results:
   Nuvama Institutional Equities
  Nuvama has forecasted the company's Q3FY25 revenues to decline 1 per cent Y-o-Y and rise 6 per cent Q-o-Q to Rs 16,536.6 crore, while it pegs PAT to decline 29 per cent Y-o-Y and rise 53 per cent sequentially to Rs 1,265.3 crore.
  The brokerage firm expects UltraTech Cement's volumes to rise by approximately 6 per cent Y-o-Y, and grey cement realisations to rise approximately 2.5 per cent sequentially. Overall, Ebitda per ton may fall to Rs 926 as against Rs 1,191 in the same quarter previous year. 
  The company's Ebitda is expected to decline 18 per cent Y-o-Y and rise 33 per cent Q-o-Q, to Rs 2,682.2 crore in Q3FY25, per the brokearage firm. 
  Deven Choksey
 UltraTech Cement is likely to report revenue growth of 2 per cent Y-o-Y and 9.2 per cent Q-o-Q, at Rs 17,075 crore in Q3FY25, primarily driven by volume growth, as per the brokerage firm. "The Y-o-Y growth is moderate due to weaker realisation while Q-o-Q growth can be attributed to seasonally weak Q2," it stated in a note.
  Deven Choksey expects the company's volume to grow 10 per cent Y-o-Y, with estimated realisation per tonne coming in at Rs 5,588 (-8.8 per cent Y-o-Y).
  It has projected Ebitda to decline by 14.2 per cent Y-o-Y, primarily driven by lower realisation though partially offset by a better fuel mix. The company's Ebitda per ton is expected to decline 22 per cent Y-o-Y to Rs 929 per ton.
  According to it, the key monitorables for the company include updates on the open offer post-CCI’s approval for its India Cements stake, the sector's outlook, and the lead distance trajectory.  Also Read: Dr Reddy's Labs Q3 Preview: Revlimid to dent US sales, profits may rise 12% 
  Systematix Institutional Equities
  Brokerage firm Systematix Institutional Equities, expects Ultratech to report double digit growth at 10.2 per cent. "We factor in volume/ revenue/ EBITDA/ PAT growth of 8.4 per cent/ -0.6 per cent/ -22.5 per cent/ -36.6 per cent for 3QFY25," it stated in a research note.
  Further, the brokerage firm expects UltraTech to report an Ebitda per ton of Rs 913 led by price discipline, established brand reputation and superior cost initiatives while other companies are expected to remain sub Rs 800 per ton.
Also Read: HDFC Bank Q3 Preview: Analysts estimate weak profit growth; NIM, NPA eyed

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First Published: Jan 21 2025 | 12:36 PM IST

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