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UltraTech: Post-Acquisition Cement Capacity Augmented to 93 MTPA - Views on News from Equitymaster
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  • Aug 11, 2017 - UltraTech: Post-Acquisition Cement Capacity Augmented to 93 MTPA

UltraTech: Post-Acquisition Cement Capacity Augmented to 93 MTPA
Aug 11, 2017

UltraTech Cement has announced its results for the first quarter of the financial year 2017-18 (1QFY18). During the quarter, the company's consolidated gross sales increased by 6.4% YoY, while net profit increased by 15% YoY. Here is our analysis of the results:

Performance summary
  • On a consolidated basis, gross sales increased by 6.4% YoY during the quarter.
  • Total domestic cement and clinker sales volume decreased marginally 0.2% YoY to 13.19 million tonnes (mt) during the quarter.
  • Better operating efficiency resulted in operating profits rising by 10.6% YoY during the quarter. Operating profit margin increased from 19.8% in 1QFY17 to 20.6% in 1QFY18.
  • The biggest cost escalation during the quarter was seen in pet coke prices, which went up around 2x YoY. However, through reduced power consumption, improved captive power plant efficiency, and enhanced waste heat recovery share, the rise in the energy cost per tonne was restricted to 28% YoY.
  • Other income reported a jump of 9.9% YoY during the quarter.
  • While depreciation charges increased by 2.2% YoY, finance costs declined by 21.7% YoY.
  • At the bottomline level, the consolidated net profit increased by 15% YoY during the quarter.
  • Net profit margins during the quarter expanded from 10.5% in 1QFY17 to 11.3% in 1QFY18.

    Consolidated Financial Performance Snapshot
    (Rs m) 1QFY17 1QFY18 Change
    Gross Sales 74,524 79,285 6.4%
    Expenditure 59,770 62,963 5.3%
    Operating profit (EBITDA) 14,754 16,322 10.6%
    Operating profit margin (%) 19.8% 20.6%  
    Other income 1,510 1,660 9.9%
    Depreciation 3,228 3,297 2.2%
    Finance costs 1,798 1,409 -21.7%
    Profit before exceptional items, Share in Profit of Associate and JV (net of tax) 11,238 13,276 18.1%
    Exceptional items 0 -315  
    Share in Profit of Associate and JV (net of tax) 0.1 0.1  
    Profit before Tax 11,238 12,962  
    Tax 3,440 3,983 15.8%
    Effective tax rate 30.6% 30.7%  
    Profit after tax 7,798 8,979 15.1%
    Non-controlling Interest -3 9 -428.6%
    Net profit 7,801 8,970 15.0%
    Net profit margin (%) 10.5% 11.3%  
    No. of shares (m)   274.5  
    Diluted earnings per share (Rs)*   103.2  
    P/E ratio (x)*   38.1  

    *trailing twelve-month earnings

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