UltraTech Cement, an Aditya Birla Group company, announced its financial results for the quarter ended 30th June 2022 on 22nd July 2022.
The net profit of the cement giant was published at Rs. 1,584 crores, down 6.98% YoY (year on year). This is probably an effect of the expanded expenses the company had to undertake in view of rising commodity prices and inflation. Ultratech Cement saw its expenses increase 36.5% YoY to Rs. 12,980.06 from Rs. 9,508.26 in Q1 last year. The logistics costs increased 6% YoY and raw material costs increased 13% YoY. Energy costs also saw an increase of 54% YoY, mainly due to the rising coal prices.
Profit before tax (PBT) for the company was recorded at Rs. 2,293 crores, against Rs. 2,526 crores last year, declining ~9.2% YoY. The company also reported a 8.8% YoY decline in EBITDA, which stood at Rs. 3,204 crore in Q1 FY23.
With construction reviving post the covid-led pandemic, the revenue from operations, came in at Rs. 15,163.98 crores, up 28% YoY. The consolidated net sales for UltraTech Cement were reported at Rs. 15,007 crores in Q1 FY23 against Rs. 11,698 crores over the corresponding period of the previous year.
Other income, meanwhile, saw a jump on a quarterly basis, from Rs. 92.39 crores to Rs. 108.72 crores, rising ~16.3% QoQ (quarter on quarter). However, there was a 46.93% decline on a YoY basis.
UltraTech Cement achieved capacity utilisation of 83% during Q1 FY23 against 73% during Q1 FY22. Moreover, the domestic sales volume grew at a stable 19% on a YoY basis.
The company management stated that after a strong end to FY22, the cement demand was impacted heavily by overall inflationary trends and lower labour availability (in May 2022). However, the company witnessed cement demand pick up in June 2022 due to the pre-monsoon construction activity.
Keeping it short, the management of the company published in official documents that headwinds arising out of rising cost pressure could put some pressure on the profitability of the company. But given the strong momentum in housing and the government's thrust on infrastructure and industrial development, the overall cement industry in India should see an upswing in demand in FY23.