UltraTech Cement Q3 Results: Profit sinks 38% to Rs 1,058 crore and margin hurt amid higher costs

UltraTech Cement on Saturday reported its earnings for the October to December 2022 quarter in which its profit slipped 38 percent on a year-on-year basis  to Rs 1,058 crore, lower than a CNBC-TV18 poll projection of Rs 1,110 crore.

While the cement maker registered an annual revenue growth of 19.5 percent at Rs 15,520.9 crore. However, its margin shrunk 350 basis points to 15.1 percent compared to 18.6 percent in the December ended quarter last fiscal.

UltraTech's total expenses were at Rs 14,123.56 crore, up 23.65 percent in Q3 FY23. According to the company its operation cost was higher. Cost of raw materials such as fly ash, slag and gypsum witnessed an increase of 13 percent.

During the October-December quarter "energy and raw material costs were up 33 percent and 13 percent YoY, while they remained flat on a sequential basis," said the Aditya Birla Group firm in its earning statement.

UltraTech achieved capacity utilisation of 83 percent compared to 75 percent during Q3FY22.

In Q3FY23 UltraTech's consolidated sales volume was 25.86 million metric tonnes during the quarter, registering a 12 percent annual growth.

Updating the capital expenditure, UltraTech said under its first phase of growth launched in December 2020, it has commissioned 5.5 mtpa new capacity during Q3FY23.

"Work on the second phase of growth of 22.6 mtpa announced during Q1FY23 has already commenced. Main plant orders have been placed and civil work started at most sites. Commercial production from these new capacities is expected to go on stream in a phased manner by FY25," it said.

On the outlook, UltraTech said that the cement sector is poised for strong growth in the coming years.

"Given the government's focus on infrastructure growth and the consequent rising demand for urban housing, the cement sector is poised for strong growth in the coming years," the company said.