UltraTech posts lower-than-expected fall in profit, shares surge
UltraTech Cement posted a lower-than-expected drop in profit for the December quarter, with the consolidated bottomline of Rs 1,470 crore down 17% on year, as against an expected drop of 20-30%.
The country’s largest producer of cement announced earnings during market hours, and its shares surged to end nearly 7% higher at Rs 11,420.90 rupees on the NSE. While shares of Kesoram Industries ended 6.5% higher at 218.63 rupees, those of India Cements, a subsidiary of the company, ended in the red.
The market leader saw its sales volume grow 10.5% on year in the domestic market, and 9% as compared to the September quarter, which is a seasonally weak quarter for cement-makers. Its consolidated revenue from operations for the quarter stood at Rs 17,193 crore, up less than 3% from Rs 16,740 crore a year ago.
“The government’s focus on infrastructure and housing projects together with increased rural and urban demand, is expected to generate a sustainable volume growth of 7- 8%, going forward,” the company said in a statement.
Weak cement prices through most of 2024 has weighed on the earnings of cement-makers, and the December quarter, too, was seen bearing the brunt of this. A relief in the form of lower costs of logistics, fuel, power and raw materials, though, helped cement producers. For UltraTech, the cost of these four factors was flat to as much as 16% lower compared to the previous year.
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