UltraTech Cement Limited, India’s largest cement business, reported a 42% decrease in consolidated net profit to Rs 759 crore for the fiscal quarter ending September 30, 2022, from Rs 1,310 crore the previous year.

Profit at UltraTech plummeted 52% year on year to Rs 1,582 crore in April-June. The total income for the quarter was Rs 13,893 crore, a 16 percent increase over the previous year’s sales of Rs 12,017 crore. At Rs 15,164 crore, revenue is 8% lower than in the preceding quarter.

According to brokerages polled by Moneycontrol, revenue was greater than projected, while profit was lower than planned. The cement industry had a dismal second quarter in general, with weaker demand due to a halt in construction activity caused by the monsoon.


According to the company’s earnings report, demand was low in July and August but began to recover in September. The monsoons’ pent-up demand, pre-Diwali building, and repair activities, and pre-election tailwinds all contributed to the surge in retail demand. Following the rainy season, increased construction activity fueled institutional demand.

The principal source of the earnings decrease was a lower realization and higher energy costs, both of which impacted operational performance.

Energy prices, which account for 37% of total operating expenses, increased 58% year on year to Rs 1,731 per tonne. The price of mixed fuel rose by $200 per tonne, compared to $120 per tonne during the same period last year.

During the third quarter, pet coke consumption increased to 40%, up from 19% the previous year. Raw material costs rose 18% year on year to Rs 610 per tonne, accounting for 13% of total operating expenses. Because of a 1% decrease in diesel prices and increased efficiency, the year-on-year increase in logistics expenses (27 percent of operating costs) was just 2%.

Other operational costs increased by 7% year over year and 16% quarter over quarter as a result of an inflationary increase in plant maintenance costs, weaker operating leverage due to lower production (compared to the previous quarter), and an increase in labor costs.

Volume growth for the quarter was 23.1 million tonnes, a 7% increase year over year. Domestic sales volume climbed by 10% year on year, with 76% of available capacity being used.

EBITDA/tonne for Indian operations was Rs 812, a 38.6 percent decrease from the previous year, while consolidated EBITDA/tonne was Rs 819, a 34.6 percent decrease. UltraTech installed 1.3 million tons per annum (mtpa) of brownfield capacity in Dalla, Uttar Pradesh, during the third quarter, bringing the company’s total capacity in India to 115.85 mtpa and 121.25 mtpa worldwide.

In the second half of this year and the beginning of the next fiscal year, the company will commission another 15.4 mtpa of greenfield/brownfield growth in India, increasing the total capacity to 131.25 mtpa. Work on the 22.6 mtpa expansion announced in the first quarter has already commenced, and the enhanced capacity will be operational in stages by FY25.

Net debt increased to Rs 8,357 crore in the quarter ended June 20, 2022, up from Rs 5,561 crore in the previous quarter ended June 20, 2022, attributable mostly to an increase in working capital and growth expenditure.

The stock closed a percent higher on the National Stock Exchange, at Rs 6,410. Year to year, the stock is down 11% and down 2.6 percent month to date.

UltraTech Cement Limited is a cement company situated in Mumbai that is a subsidiary of the Aditya Birla Group. UltraTech is India’s largest maker of grey cement, ready-mix concrete (RMC), and white cement, with a capacity of 116.75 million tonnes per year. Outside of China, it is the only company in the world with a single-country capacity of more than 100 million tonnes.

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