UltraTech Cement's quarterly profit falls 52% YoY

UltraTech Cement, India’s largest cement maker, posted a 52 per cent decline in net profit for the July-September quarter, mainly due to lower selling prices and subdued demand.

The company reported a net profit of INR2.6bn (US$42m) for the quarter ended 30 September. Domestic cement and clinker sales stood at 9.1Mt.

It noted that cement demand remained “sluggish due to a prolonged monsoon and a “low-take off from the infrastructure and housing sectors.”

It further added that a softening of imported coal prices was negated by the devaluation of the Indian rupee. Logistics and raw material continued to rise due to high diesel prices. However, the optimisation of the company’s fuel mix helped curb power and fuel costs to some extent, it noted.

The company’s capex plans are progressing on schedule. During the quarter it commissioned a 25MW thermal power plant at Rajashree Cement in Karnataka while its 1.6Mta grinding mill at Jharsuguda in Odisha came on-stream in this month.

UltraTech expects the short-term outlook to remain challenging with FY14 demand growth at around five per cent. Long-term prospects appear brighter with the company forecasting growth of over eight per cent led by housing and infrastructure spend.