UltraTech Cement Ltd is the largest manufacturer of grey cement, ready mix concrete (RMC) and white cement in India. With a consolidated capacity* of 116.75 MTPA, it is the third largest cement producer in the world, excluding China.

Installed capacity in India – 111.35 MTPA

Capacity Utilisation – 69%

Realisations per tonne June, 2020 – Rs. 5211

Stock Details

Market Cap. (Cr.) 118482.61
Face Value 10.00
Equity (Cr.) 288.63
52 Wk. high/low 4753.35/2913.15
BSE Code 532538
Book Value (Rs) 1355.23
Industry Cement


Share Holding Pattern %


FIIs 17.49
Institutions 14.59
Non Promoter Corp. 2.09
Public & Others




Total 100.00

Ultratech-Cement-Ltd-Price-ChartKey Highlights of Q1FY1 Result:

  • Ultratech Cement’s Revenue declined 33% over the year-ago period to Rs 7,633 crore. Beats the street estimates of Rs 7,279 crore. Volumes declined 22% to 13.94 MT. This is marginally lower than the 14.2 MT estimated. EBITDA fell 29.7% year-on-year to Rs 2,074.6 crore, compared with the estimated Rs 1,495 crore.

  • Domestic sales volume down was 21% to 13.56 million tonnes. Export sales volume flat at 0.38 million tonnes.

  • In the available 68 operating days during this quarter, the Company kept a tight control on costs and cash flow, and achieved an effective capacity utilisation of 60% across its network of 54 plants around the country.

  • In Q1FY21, the company sold its 92.5% stake in the Chinese subsidiary Krishna Holdings Pte. Ltd, for an enterprise value of US$120mn (Rs9bn). Sales proceeds of Rs7bn (net of taxes and debt) are expected to be received in August 2020. These proceeds will be used to bring down the debt going ahead.

  • The 14.6 MTPA cement plants acquired during the previous financial year have been making good progress on integration, achieving an Operating EBITDA margin of 21% as compared to the all India average of 28%. Once the markets open up, the performance will improve further in line with the existing operations.

  • The company has reduced net debt by Rs 2,209 crore to Rs 14,651 This has resulted in a Net Debt/EBITDA of 1.44x, which the company intends to bring it down to 1.0x in the near future.

Cost per tonne declined in Q1FY21

  • Logistics cost per tonne declined 5% to Rs 1,116.

  • Power, Oil & Fuel per tonne fell 11% to Rs 913.

  • Raw material cost per tonne down 2% to Rs 477.

Q1FY21 Performance

Particulars Q1FY21 Q4FY20 Q1FY20 QoQ ( %) YoY (%)
Net Sales 7633.8 10744.7 11419.7 -29.0% -33.2%
Operating Expenses 5559.2 8302.1 8470.5 -33.0% -34.4%
EBITDA 2074.6 2442.6 2949.2 -15.1% -29.7%
EBITDA Margin (%) 27.18% 22.73% 25.83% 445 bps 135 bps
Other Income 278.8 197.9 135.0 40.9% 106.5%
Finance Costs 393.02 504.83 502.89 -22.1% -21.8%
Depreciation 646.18 672.36 688.38 -3.9% -6.1%
PBT 1314.2 1463.4 1893.0 -10.2% -30.6%
Tax 360.3 -1777.4 611.79 -120.3% -41.1%
Profit After Tax 953.9 3240.8 1281.2 -70.6% -25.5%
Exceptional Items -157.37
Adjusted PAT 796.5 1131.3 1281.2 -29.6% -37.8%
PATM (%) 10.43% 10.53% 11.22% (10) bps (79) bps
EPS (Rs.) 27.65 112.43 44.42 -75.4% -37.8%

Highlights from Conference Call

  • A total of Rs 6,000 crore has been released in last nine months from free cash flows.

  • Don’t expect working capital to further shrink.

  • Will have to infuse some more working capital to push sales.

  • Don’t expect further benefits from power & fuel price correction.

  • Cement industry usually witnesses 60% utilization during monsoon quarter.

  • Average utilization for June quarter stood at 46%.

  • A total of Rs 6,000 crore has been released in last nine months from free cash flows.

  • Further deleveraging to take place by sale by Dubai unit and down selling outstanding loan to Binani 3B—The Fibreglass Company. To take a call on Dubai unit after a quarter.

  • Capex for FY21 would now increase to Rs. 1500 crore with resumption of economic activities against earlier guidance of RS. 1000 crore

  • Overall, the company managed to reduce the cost reduction of Rs. 105/t vs. Q4FY20. As a result, the company achieved EBITDA/t of RS. 900/t for the quarter.


UltraTech Cement reported a better than estimated Q1FY21 performance. Cement demand improved and remained increasing since lifting of lockdown. Rural demand in FY21E could be robust on the back of expectations of normal monsoon and pick-up in individual housing building (IHB). The company is targeting a reduction of fixed overheads by 10% leading to annual saving of Rs. 500 crore. Currently, plants are running at 60-65% utilisation on companywide capacity. UltraTech’s key focus will continue to remain on debt deleveraging. All proceeds from divestment of non-core assets will help accelerate this journey. We value Ultratech Cement at 13x FY22 EV/EBITDA considering further debt reduction. Therefore we initiate buy at CMP for the target price of Rs.4900.


Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more

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