UltraTech - April 2019

In the quarter ending 31 March 2019, on a standalone basis, UltraTech Cement saw its domestic net sales increase by 18 per cent YoY to INR103.34bn. The domestic sales volume jumped 16 per cent YoY with the clinker capacity at Manavar, Madhya Pradesh, now operating at 100 per cent utilisation. Profit before interest, depreciation and tax came in at INR23.53bn, compared to INR18.14bn in the same period a year earlier. Variable costs during the quarter advanced by three per cent YoY on the back of higher fuel prices and depreciation of the rupee. For the full year, net sales were up 21 per cent YoY to INR351.05bn. Profit before interest, depreciation and tax stood at INR69.92bn, up from INR64.82bn in the same period a year earlier. 

The acquisition of BCL in November last year, now renamed UltraTech Nathdwara Cement Ltd (UNCL), gave UltraTech access to large reserves of high-quality limestone. A major overhaul of plants was also undertaken in the fourth quarter to improve production efficiencies with a utilisation rate of 72 per cent reported in March this year. The company is now in the process of selling the non-core assets acquired in the UAE and China with the proceeds being used to deleverage the balance sheet.

Looking ahead, the government’s thrust on infrastructure development, the increase in pace of the low-cost housing programme and a pick-up in urban housing is expected to result in sustained growth in cement demand going forward.