On Thursday during market hours, UltraTech Cement reported a steep 114% jump in its consolidated net profit for the quarter ended June 2021.
Owing to this, shares of the company rose 2% yesterday to Rs 7,545 on the BSE, scaling fresh 52-week high.
Today, shares further extended gains and opened 1.5% higher to surpass yesterday's highs.
Net profit came in at Rs 17 bn as compared to Rs 7.9 bn reported in the year-ago period. The net profit figures beat estimates of Rs 14.3 bn.
If compared sequentially, Ultratech's profit declined 4% on lower revenue and higher costs.
The company's consolidated revenue in the June quarter rose 54.2% to Rs 118.3 bn as against Rs 76.7 bn, YoY. Sales volumes grew 47.3% YoY to 20.53 MT.
EBITDA increased 59.2% to Rs 33.1 bn from Rs 20.8 bn. EBITDA margin improved to 28% from 27.1%, YoY.
UltraTech's operational profit was impacted by a sequential rise in power and fuel expenses at 20.5% of net sales compared with 18.8% in the preceding quarter.
In a regulatory filing, the company said,
Here's a table comparing UltraTech's financials on key parameters.
(Rs bn) | 31-Jun-21 | 31-Jun-20 | YoY (%) |
---|---|---|---|
Revenue | 118.3 | 76.7 | 54% |
Raw Materials Consumed | 15.5 | 8.4 | 85% |
Power and Fuel | 24.3 | 13.8 | 76% |
Total Expenses | 95.1 | 117.9 | -19% |
EBITDA | 33.1 | 20.8 | 59% |
PAT | 17.0 | 7.9 | 114% |
Ultratech's 19.5 m tonnes per year capacity expansion programme is on track and is estimated to be completed by the end of fiscal 2023. That will take its total capacity to 136.25 MTPA.
Disruptions due to covid have caused some delays due to labour shortages and lockdowns.
Sales volume stood at 21.5 m tonnes, rising 46.9% YoY on a low base, but declining 22.5% if compared sequentially.
Net debt stood at Rs 59.8 bn as of June 2021 against Rs 67.2 bn as of March 2021.
The company said it paid long-term loans amounting to Rs 50 bn in advance, adding the repayments were made through free cash flows.
In the past one year, UltraTech has reduced more than half of its debt which stood at Rs 146.5 bn in June 2020.
We reached out to Brijesh Bhatia, Research Analyst at Equitymaster, and editor of the premium monthly recommendation service Fast Profits Report, for his technical view on the cement sector.
Here's what he has to say...
UltraTech Cement share price opened the day at Rs 7,590, up 1.5% on the BSE.
It further extended gains as the session progressed and touched a 52-week high of Rs 7,630.
Cement stocks are trading on a mixed note today with shares of Birla Corp and ACC leading with gains.
Shares of UltraTech Cement have been on an uptrend in the year gone by, gaining a whopping 93%.
At the current price of Rs 7,540, UltraTech Cement commands a marketcap of Rs 2,176.5 bn.
Note that cement stocks have made considerable gains in recent months on expectation of the profitability remaining intact despite the cost rise.
Demand has recovered on the back of gradual relaxations in lockdowns, expectations of construction activities gaining momentum post-monsoon, the low base of the last two years, government's focus on infrastructure spends, and a strong June 2021 quarter.
Cement production demand and growth was primarily driven by the housing sector during the first two months of the financial year 2022.
During the months of April and May, the cement production was recorded at 54 m tonnes, which is almost a 100% increase in the production of cement during April-May 2020.
UltraTech Cement is the cement flagship company of the Aditya Birla group.
A US$5.9 bn building solutions powerhouse, UltraTech is the largest manufacturer of grey cement, ready mix concrete (RMC) and white cement in India.
It's the third largest cement producer in the world, excluding China. UltraTech is the only cement company globally (outside of China) to have 100+ MTPA of cement manufacturing capacity in a single country.
The company's business operations span in UAE, Bahrain, Sri Lanka, and India.
It has 23 integrated plants and grinding units, 6 bulk terminals, 2 white cement and putty plants, and over 100 ready mix concrete plants spread across the country.
To know more about the company, check out Ultratech Cement company fact sheet and UltraTech Cement quarterly results.
For a sector overview, read our cement sector report.
You can also compare UltraTech Cement with its peers.
UltraTech Cement vs Ambuja Cement
UltraTech Cement vs Shree Cement
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Yash Vora is a financial writer with the Microcap Millionaires team at Equitymaster. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.
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