UltraTech Cement Limited, the world’s third-largest cement manufacturer ( banning China) and largest in India, has reported consolidated profit after duty (PAT) of Rs crore for the quarter ended September 2021, dwindling by about 23 percent from Rs crore reported in the former quarter on account of advanced costs. On a time-on- time (YOY) base, there was an increase of 13 percent from the acclimated net profit of Rs crore.
Consolidated profit came in at Rs crore, advanced by1.6 percent compared to Rs crore in June 2021 quarter. On a YOY base, the profit was advanced by15.7 percent fromRs. crore.
The total consolidated volumes for the company stood at21.64 million tonnes, a growth of 8 percent. Volumes for slate cement have grown on a YOY base by 8 percent to19.9 million tonnes. The company added 43 new Ready- blend concrete (RMC) shops during the quarter, taking the aggregate of RMC shops to 148. White cement volumes grew by 17 percent YOY to0.34 million tonnes. There was a reduction in exports and others due to COVID restrictions of about 45 percent which came in at0.21 million tonnes. Overseas slate cement volumes were stagnant at1.21 million tonnes.
Overall, the company witnessed a growth in volumes across regions except central India where demand was more or less stagnant, and eastern India where the volumes went down due to rains and COVID restrictions. Strong demand growth was witnessed in Western India, especially Maharashtra & Gujarat where demand was pushed both by civic and pastoral demand as well as casing and structure member.
Costs
Raw material, logistics, and energy costs for the company witnessed an upward line during the quarter. Raw accoutrements costs ( sediment, gypsum, and HSD) which constitute 13 percent of total costs, were advanced by 3 percent on a YOY/ 2 percent on a QOQ base and clocked Rs 518/ tonne. The rise in diesel prices also impacted the input costs.
Energy costs which constitute 28 percent of the total costs were largely impacted due to rising coal and petcoke prices. Energy costs were advanced by 17 percent YOY/ 8 percent on a successional base and touched Rs 1099/ tonne. This was despite the fact that the company consumed 4 percent lower power and erected-in functional edge. Green power fulfilled13.7 percent of the total power demand.
To reduce dependence on advanced-priced coal purchases, the company expects to commence mining operations at its Bicharpur coal block in Madhya Pradesh during Q3FY22.
Logistics costs ( contributing 31 percent to total costs) were advanced by 7 percent YOY/ 3 percent QOQ to Rs/ tonne due to rising canvas prices which increased by 21 percent YOY. The company was suitable to incompletely alleviate the exaggerated energy prices with bettered edge.
Quilting cost was also advanced by 25 percent YOY and 20 percent from the former quarter.
As a result, the company’s total costs as a chance of total profit witnessed an increase of 3 percent on a YOY base and of 5 percent from the former quarter.
Advanced costs negatively impacted the operating and net perimeters. Operating perimeters were down 370 bps on a successional base and by 130 bps on a YOY base. Also, net perimeters were down 350 bps successionally and by 30 bps on a YOY base.
The company commissioned a new capacity of1.2 mtpa in the month of Oct’21.0.6 mtpa was commissioned at Patliputra Cement Works in Bihar and0.6 mtpa at Dankuni Cement Works in West Bengal, which is the first phase of its capacity expansion plans of19.5 mtpa that were blazoned in December of last time. These additions will help meet the growing demand in the eastern region.
The total cement manufacturing capacity in India for the company now stands at112.55 mtpa.
In the last two times, the company has gauged up its renewable energy capacity by2.5 times and expects it to fulfill 34 percent of its power demand by 2024 from the current situations of 13 percent. The company has set a target to move to fully (100 percent) switch to renewable energy by 2050.
Recovery in pastoral and civic demand in both casing and structure sectors across regions is anticipated to be challenged by the increase in input and energy costs. Still, the company hopes to alleviate the same by erecting sustainable edge across the chain and bypassing some costs to the consumers by adding the prices.
