The country’s largest producer of cement saw its consolidated bottom line grow by more than 17% year-on-year to 2,604 crore as revenue grew by more than 16% YoY to 24,648 crore.
“Capacity utilisation of 81% in a seasonally transitioning quarter on an enlarged 200 million tonnes base speaks to the depth of our demand pipeline,” Daga said on a post-earnings call.
The Aditya Birla Group company saw a YoY volume growth of 13.1% in the June quarter; this compares to an expected volume growth of 7-8% for the industry.
Despite a flare-up in costs on account of the West Asian crisis, profit before interest, tax, depreciation and amortisation (Ebitda) rose by 12% on year to 5,146 crore, while the Ebitda made per tonne of cement increased to 1,214 from 1,198 a year ago. “I want you to appreciate the stability that it represents,” Daga said. “We have absorbed and are absorbing the sharpest imported fuel cost shock in recent memory during the quarter, on a volume base enlarged by acquired assets that are still ramping up to system profitability,” he said. “We absorbed the shock better than any peer, and we will harvest a relief faster than any peer.”
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Sales and capacities include those from India Cements and Kesoram Industries, which have now been fully converted to the UltraTech brand. “Our team has been successful in converting the customers who were buying a ‘B’ or ‘C’ category brand of cement into an ‘A’ category brand of cement, willing to pay a price premium,” Daga said. “I believe we will be well ahead of the industry’s growth, translating directly into market share gains.”
With an annual production capacity of over 200 million tonnes, UltraTech commands about 28% market share in the world’s second-largest market for the building material. Additional capacities will help the company scale to more than 212 million tonnes of annual production capacity this fiscal and more than 242 million tonnes by the end of FY28.The expansion plan includes a balanced combination of greenfield projects, brownfield expansion and debottlenecking opportunities, the company said in a statement.
Daga guided for costs increasing by Rs 130–140 per tonne in the current quarter, which is typically the weakest on account of monsoon rains. The higher costs will include those for maintenance and higher fuel costs, he said.
“Industry expects prices to hold broadly steady through the monsoon quarter due to the impact of an increase in costs, which frankly is a constructive outcome for this time of year,” he said.
UltraTech announced its earnings during market hours. Its shares closed 1.5% higher on the BSE at Rs 11,897.80.