UltraTech Cement’s Net Profit Drops 14%
DSIJ Intelligence / 29 Jul 2013
Revenues of the company have declined by 2.25% to Rs 4957.54 crore in Q1FY14 as against Rs 5071.90 crore posted during Q1FY13. Net profit has declined by 14% to stand at Rs 672.6 crore against Rs 778.39 crore on a yearly basis (YoY).
The Aditya Birla Group Company UltraTech Cement, which is the largest single brand cement company in India and the largest exporter of clinker, has announced its quarterly results for Q1FY14.
Revenues of the company have declined by 2.25% to Rs 4957.54 crore in Q1FY14 as against Rs 5071.90 crore posted during Q1FY13. The net profit of the company has declined by 14% to stand at Rs 672.6 crore against Rs 778.39 crore on a yearly basis (YoY).
Realisations per tonne have remained at Rs 4893.92 in Q1FY14. The overall EBITDA margins of the company have declined to 21.16% as against 25.43% on a YoY basis. The EBITDA per tonne has remained at Rs 1035.63 in Q1FY14.
The company has recently acquired Bhagawati Limestone. Details regarding its valuation, revenues and capacity remain unavailable at this time. UltraTech has commissioned a clinkerisation plant of 3.30 MMT in Malkhed, Karnataka. Moreover, the company has sanctioned Rs 2100 crore for mordernisation and for setting up grinding mix and ready mix plants across India. The balance sheet of the company remains strong with a comfortable debt to equity ratio and a secure interest cover ratio. We thus do not see any funding pressure on the company due to this capex plan.
With these initiatives, the company is expecting its capacity to increase by 10 million tonnes by 2015 which would be 18% of its current annual capacity. This would take its total capacity to 64.45 million tonnes when the capex is completed.
The Competition Commission of India (CCI) has imposed a penalty of Rs 1175.49 crore on the company as per the complaint by Builders' Association Of India against cartelisation. UltraTech has filed an appeal against the order before the Competition Appellate Tribunal (COMPAT) wherein COMPACT has put a stay on the CCI order on a condition that the company deposits 10% of the penalty, amounting to Rs 117.55 crore.
UltraTech's result is in line with the sluggish results posted earlier last week by major cement companies. Considering the weak outlook, we would like readers to stay away from this stock.
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