Aditya Birla Group UltraTech Cement

Aditya Birla Group company, UltraTech Cement, has reported a 38% YoY drop in its consolidated net profit at Rs 1,058.20 crore in the December quarter. Despite the decline in net profit, the company's revenue from operations rose by 19.5% YoY to Rs 15,520.93 crore. The company's operating margin dropped to 15% in Q3 from 19% in the year-ago period, but it was up 100 bps sequentially. Volume growth was strong during the quarter, but cost pressures resulted in subdued margins.

The company has also announced plans to expand its capacity in the near future. Main plant orders have been placed and civil work has started at most sites. Commercial production from these new capacities is expected to go on stream in a phased manner by FY25. Upon completion of these expansions, the company's capacity will grow to 159.25 MTPA, solidifying its position as the third largest cement company in the world, outside of China and the largest in India by far. The company believes that 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.

Some of the key highlights of the company's performance during the quarter include domestic grey cement sales volume growing 13% YoY and 12% QoQ. Energy and raw material costs were up 33% and 13% YoY, respectively, while they remained flat on a sequential basis. UltraTech achieved a capacity utilization of 83% as against 75% during Q3FY22. In addition to cement, the company also commissioned 18 MW of WHRS and 7 MW of solar power during the quarter. With these expansions, UltraTech's green energy share has gone up to 19.8%.

Under the first phase of capacity expansion announced in December 2020, UltraTech commissioned 5.5 mtpa new capacity during the quarter. Work on the second phase of growth of 22.6 mtpa, announced during Q1FY23, has already begun. Upon completion of these expansions, the company's capacity will grow to 159.25 mtpa, solidifying its position as the third largest cement company in the world, outside of China.

It is worth noting that the company's net profit excludes extraordinary items such as the reversal of accumulated provision for tax amounting to Rs. 323.35 crores and accrued minimum alternate tax credit entitlement of Rs. 211.86 crores. Despite the challenges faced during the quarter, UltraTech remains optimistic about the future of the cement sector in India and is actively working to expand its capacity to meet the growing demand.