UltraTech profits rise 10% in 1Q16, operational costs cut

UltraTech Cement, India reported a 10 per cent YoY rise in consolidated profit after tax for the quarter ended March. The company reported a consolidated net profit of INR7230m (US$108.52m) against 6750m (US$98.63m) in the same period last year, due to a strong operational performance.

Net sales in the same period rose 5 per cent to INR68.5bn, from INR65.17bn a year earlier. Total cement demand for the quarter, the company said, grew by 15 per cent.

 "The operating costs reduced with operational efficiencies, a judicious fuel mix and fall in fuel prices," India's largest cement maker said in a press release.

The company said the annual financial performance is not comparable with the previous year due to its acquisition of Jaiparakash Associates' Gujarat cement assets completed in June 2014.

This acquisition of 21Mta cement capacity will take Ultratech’s cement capacity over 91Mta and would be funded by a 20-year rupee loan, which will have a five-year moratorium on the principal.

In its outlook for the next fiscal year, Ultratech Cement said it expects cement demand to grow 7-8 per cent on the back of infrastructure development, housing and smart cities.

Reliance Securities said in a note to clients that it continues to believe that the company is well poised to witness growth due to its leadership status, increasing market share and improving operating leverage.