UltraTech net profit goes up two-fold in the December quarter of 2020
Aditya Birla group firm UltraTech Cement on Saturday reported an over two-fold jump in consolidated net profit at Rs 1,584.58 crore in the December quarter of 2020.
The leading cement producer had posted a net profit of Rs 711.17 crore in the October-December quarter a year ago.
Its revenue from operations stood at Rs 12,254.12 crore, up 17.38 per cent, during the quarter under review from Rs 10,439.34 crore a year ago.
UltraTech Cement’s total expenses were at Rs 10,190.03 crore against Rs 9,611.08 crore, down 6.29 per cent.
During the quarter, its volumes rose 14 per cent to 22.82 million tonnes, it said.
“Recovery from Covid-19 led to the disruption of the economy. This has been fuelled by quicker demand stabilisation, supply-side restoration and greater cost efficiencies,” UltraTech Cement said in a post-earning statement.
While rural and semi-urban housing continues to drive growth, pick-up in government-led infrastructure aided incremental cement demand. “Pent-up urban demand is expected to improve with the gradual return of the migrant workforce,” it added.
Though fuel prices have increased in recent months, operational efficiencies and tight control over costs are reflected in the company’s 26 per cent operating margin. “Focus on reducing debt continues. Net debt reduction during Q3 of FY21 was Rs 2,696 crore and year-to-date, it was Rs 7,424 crore,” it said.
During the quarter, UltraTech’s board approved a capex of Rs 5,477 crore towards increasing capacity by 12.8 mtpa (million tonnes per annum) with a mix of - brownfield and greenfield expansion - in the fast-growing markets of the east, central and north regions of the country.
“This expansion is in addition to the company’s 6.7 mtpa capacity addition that is currently underway in Uttar Pradesh, Odisha, Bihar and Bengal, which has picked up the pace and is expected to get commissioned by financial year 2022, in a phased manner,” it said.
After completion, UltraTech’s capacity will grow to 136.25 mtpa, reinforcing its position as the third-largest cement company in the world, outside of China.
Over the outlook, the company said: “With strong rural growth, revival in manufacturing sentiment, buoyancy in GST and tax collections, UltraTech expects demand to grow on the back of the government's push on infrastructure projects.”