India: UltraTech cement profits up 25%

UltraTech Cement reported that for the quarter ending 30 September its profits rose 25.27 per cent YoY. A consolidated net profit of INR6.14bn (US$92.1m) was announced for the July-September 2016 quarter, compared to INR4.9bn in the same period last year. However, net sales fell 2.53 per cent to INR57bn from INR58.5bn.

Despite an increase in net profit, the results were not as positive as expected. According to a Bloomberg poll, analysts estimated consolidated net profit to be reported at INR63.2bn and net profit at INR7bn.

Earnings before interest, depreciation, taxation and amortisation for the period under review were up 16 per cent YoY to INR13.7bn from INR11.8bn. On a stand-alone basis net sales fell 2.33 per cent to INR53.9bn while net profit rose 31.51 per cent in the quarter, from INR4.5bn to INR6bn.

Total sales volume rose by just one per cent to 11.18Mt, a disappointing performance considering industry volume growth was nearly 2-3 per cent in the quarter. UltraTech management explained the minimal volume growth was a result of a prolonged monsoon.

UltraTech said its outlook is "cautiously optimistic". It expects continued government spending on infrastructure, steady cement prices and new capacity additions to be slow.