Financial Results: Q2FY23

(Rs. in crores)

19th October 2022: UltraTech Cement Limited, an Aditya Birla Group company today announced its financial results for the quarter ended 30th September, 2022.

FINANCIALS

The second quarter is traditionally a weak one for the cement sector, with lower demand as construction activity slows down on account of the monsoons.

Demand was low during July and August 2022, showing some sign of revival in September, 2022. Pick-up in retail demand was on the back of pent-up demand accumulation during the monsoons, pre-Diwali construction and repair work gaining momentum, and pre-election tailwinds. Institutional demand was led by increased construction activity after the receding monsoons.

Consolidated Net Sales was Rs.13,596 crores vis-à-vis Rs.11,743 crores over the corresponding period of the previous year. Profit before interest, depreciation and tax was Rs.2,013 crores compared to Rs.2,855 crores. Profit before tax was Rs.1,103 crores and Profit after tax was Rs. 756 crores compared to Rs. 1,947 crores and Rs.1,314 crores, respectively.

OPERATIONS

Energy cost increased 58% and raw material cost rose 18%, YoY.

UltraTech achieved capacity utilisation of 76% as against 71% during Q2FY22. Domestic sales volume grew 9.6% on year-on-year basis, despite heavy monsoons through the quarter.

SUSTAINABILITY

UltraTech is committed to reduce carbon emissions. In line with its continuing endeavour towards enhancing environment conservation measures, it commenced 5 MW of WHRS capacity during the quarter. Green power now contributes 19% of the total power requirement. This is expected to increase to 36% by the end of FY25.

UltraTech has been granted Environmental Product Declaration (EPD) certificates for four of its cement products – Ordinary Portland cement (OPC), Portland pozzolana cement (PPC), Portland slag cement (PSC) and Portland composite cement (PCC). An EPD is a clear and objective report that explains the materials used to make a product and how that product impacts the environment throughout its entire life cycle. Real facts and measurements are provided, enabling consumers to understand a product's environmental impact and sustainable features.

UltraTech's green products portfolio currently includes more than 70 GreenPro certified products. Around 70 per cent of the Company’s cement production is blended cement, contributing to lower carbon emissions and reduced usage of raw materials such as limestone in the cement manufacturing process. This also makes UltraTech the largest consumer of industrial waste generated by the power and steel sectors.

CAPITAL EXPENDITURE

The Company’s first phase of growth launched in December, 2020 is on track and estimated to be completed by the end of FY23. During the quarter, the Company commissioned 1.3 mtpa brownfield capacity at Dalla, Uttar Pradesh, taking the total capacity in India to 115.85 mtpa and 121.25 mtpa globally. In the second half of this year, the Company will commission another 15.4 mtpa of greenfield / brownfield expansion and start the next financial year with a capacity of 131.25 mtpa in India.

Work on the second phase of growth of 22.6 mtpa announced during the first quarter has already commenced. Main plant orders have been placed and civil work started at some sites. Commercial production from these new capacities is expected to go on stream in a phased manner, by FY25.

Upon completion of the latest round of expansion, the Company’s capacity will grow to 159.25 mtpa, reinforcing its position as the third largest cement company in the world, outside of China.

GOING FORWARD

Given the government’s focus on infrastructure spending and affordable housing, the cement sector’s long-term growth potential continues to remain healthy. Demand revival is imminent, especially during the festive season and the January-March peak construction period.