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UltraTech Cement Q1 Results FY22- 2023

22 July 2022

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. 

More on UltraTech Cement Q1 Results 2023

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. 

Hits of UltraTech Cement Results in Q1 2023

  • Net sales witnessed a healthy growth of 28% on a YoY basis from Rs.11,689 crore to Rs. 15,007 crore.
  • UltraTech’s capital utilisation grew from 73% to 83%.
  • Domestic sales volume registered a 19% growth on a yearly basis.

Misses Observed in UltraTech Results for Q1 22-2023

  • UltraTech’s profit was down 7% on a yearly basis, falling to Rs. 1,584 crores.
  • The company’s PBT also fell on a yearly basis to Rs. 2,293 crores from Rs. 2,526.
  • There was a 46.93% YoY decline in the other income.
  • There was an 8.8% YoY decline in EBITDA, which stood at Rs. 3,204 crore in Q1 FY23.

What the management says About UltraTech Quarterly Result

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.

Other things to know about the Q1 Results of UltraTech Cement 

  • In line with its continuing endeavour towards enhancing environment conservation measures, UltraTech commenced 18 MW of WHRS capacity during the quarter. With this, the total WHRS capacity stands augmented to 185 MW covering nearly -16% of its current power needs. This is expected to increase to 250 MW by the end of FY23. Moreover, the company remains committed to reducing carbon emissions. 
  • The company's existing expansion program is on track and estimated to be completed by the end of FY23. 
  • Work on further capex announced during the quarter has already been commenced, and 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), UltraTech's capacity will grow to 159.25 mtpa, reinforcing its position as the third largest cement company in the world, outside of China.
  • The RoCE (return on capital employed) and RoE (return on investment) were recorded at 15% and 15.5%, respectively.
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