Earnings Outlook: UltraTech margin, PAT seen dn on input costs surge

 20 Jul 2022

UltraTech Cement ltd will likely have recorded a sharp growth in revenue in Apr-Jun due at a low base of the year ago quarter and an uptick in volumes, but sustained rise in operating costs will likely have hit the bottomline growth significantly.

The company's consolidated net profit is seen at 13.2 bln rupees in the June quarter, down 22% on the year and down 50% on the quarter, according to an average of estimates by four brokerages.

The consolidated net sales of UlltraTech Cement, which is a pivotal member of the Aditya Birla Group, is estimated to have been 143 bln rupees, up 21% on the year and down 9.3% on the quarter.

The company's operating profit is estimated to be 27.2 bln rupees.

UltraTech will declare its results for Apr-Jun on Friday.

For the cement sector, the June quarter is seen as having been mixed in terms of cement demand dynamics with April having seen a strong demand increase and June having been a demand decline.

UltraTech’s volume during the quarter is estimated to have fallen 11% on the quarter by brokerage Kotak Institutional Equities which the low base of previous year would the volume growth high at 14% on the year.

The brokerage said that higher prices of steel and demand had moderated cement demand during the June quarter as compared to the previous quarter.
Analysts also said that UltraTech had taken price hikes in April and May and that would have led to an increase in realisations.

Brokerage IDBI Capital Market Services said that the company’s EBITDA per tn to have risen on the quarter on account of price hike in April. EBITDA is the earnings before interest, tax, depreciation, and amortisation, and denotes the operating profit.

But higher pet coke prices and other input costs would have offset the benefits from volume uptick and better realisations.

According to brokerage Yes Securities the power and fuel cost per tn would have risen 10% on the quarter for UltraTech.

Analysts will be following the management commentary post earnings announcement to gauge the company’s outlook on demand and prices for the remainder of financial year 2022-23 (Apr-Mar).

IDBI Capital Market Services said it would “look out for capacity expansion plans, ramp up of expansions and price hikes.”