UltraTech’s Q1 net rises 6.6% as infra demand up

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MUMBAI : Despite rising raw material prices and energy costs, Aditya Birla Group-owned UltraTech Cement Ltd, on Friday, reported a 6.6% jump in consolidated net profit to ₹1,688.45 crore for the first quarter of FY24 as compared to ₹1,584.08 crore a year ago. The profit beats Bloomberg analysts’ estimate at ₹1,615.3 crore for the country’s largest cement-maker. During April-June, the company’s revenue from operations increased by 17% y-o-y to ₹17,737 crore against ₹15,163.98 crore in Q1 FY23.

The company said it has achieved a capacity utilisation of 89% as against 83% during the first quarter of last fiscal. Ultratech’s domestic sales volume rose 20% year-on-year, said the company. Cement businesses in India have been struggling for better margins due to several factors including rising energy costs, increasing raw material prices and fierce competition after the entry of Adani Group into the industry through acquisition of Ambuja Cements Ltd and ACC Ltd in a closely-fought battle last year.

Ultratech Cement said the energy cost was higher by 3% y-o-y, primarily due to currency devaluation during the June quarter. Besides, a 6% rise in raw material cost, mainly driven by the higher prices of fly-ash and slag, had a compounding effect on the operating margins. The company’s operating margin came down to ₹1,034 during June quarter from ₹1,248 in the same period of last year and ₹1,060 in the previous quarter.

However, the demand for cement across all sectors continues to remain strong, said the company. “Higher infrastructure spending ahead of the general elections in 2024 is expected to further propel cement demand during this fiscal," the company said. Ultratech has commissioned a cement capacity of 3 mtpa during the