Result Analysis:  UltraTech Cement Limited

(CMP: Rs.6891)

Result Update: Q3FY23

UltraTech Cement Limited (“UltraTech”) is the cement flagship company of the Aditya Birla Group. A USD 7.1 billion building solutions powerhouse, the company is the largest manufacturer of grey cement, ready mix concrete (RMC) and white cement in India. It is the third largest cement producer in the world, excluding China. UltraTech is the only cement company globally (outside of China) to have 100+ MTPA of cement manufacturing capacity in a single country. The Company’s business operations span UAE, Bahrain, Sri Lanka and India. UltraTech reaches out to more than 1.6 million beneficiaries in over 500 villages in 16 states across India.


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    Stock Details

    Market Cap. (Cr.) 207221
    Equity (Cr.) 288.68
    Face Value 10
    52 Wk. high/low 7576/ 5158
    BSE Code 532538
    Book Value (Rs.) 1783.5
    Sector Cement

    Key Ratios

    ROE (%): 15.50
    ROCE (%): 14.62
    TTM EPS: 230.98
    P/BV: 3.86
    TTM P/E: 31

    Result Highlights:

    • Revenue of UltraTech has grown on both QoQ and YoY basis by 11.72%, and 19.53% respectively to Rs.15,520.93 cr. in Q3FY23. Company has clocked PAT of Rs.1,062.58 in the Dec. quarter, growth of 40.05% QoQ and a de-growth of 37.87% YoY.
    • EBITDA margin of the company has increased sequentially by 138bps and showed a decline of 331bps on YoY basis to 15.87%.
    • Domestic sales volume of the company grew 13% with capacity utilization of 83% as against 75% during Q3FY22, due to high demand generated from housing and infrastructure segment.
    • UltraTech was able to reduce Consolidated Net Debt to Rs.7,722 crs in Dec-22 from Rs.8,357 crs in Sep-22.
    • UltraTech Commissioned cement capacity of 5.5 mtpa, taking the total grey cement capacity of the Company to 121.35 mtpa in India.
    • UltraTech’s domestic grey cement sales volume rose by 13% YoY and 12% QoQ, respectively. Energy and raw material costs were up by 33% and 13% YoY, while they remained flat on a sequential basis.
    • The Company commissioned 18 MW of WHRS and 7 MW of solar power during the quarter. With these expansions, UltraTech’s green energy share has gone up to 19.8% which includes 208 MW of WHRS and 325 MW of solar power.
    • Company’s 9MFY23 Consolidated Sales increased by 21.72 % to Rs.43,205.48 crores from Rs.35,495.95 crores. Whereas Net profit declined by 29.18 % to Rs.3,266.62 crores from Rs.4,612.65 crores.


    Financial Performance:


    Shareholding Pattern:

    Particulars %
    Promoters & Promoter Group 59.96%
    FIIs 14.99%
    DIIs 18.02%
    Public 6.31%
    Others 0.72%



    UltraTech has reported overall tepid performance in the December’22 quarter with a decline of 37.87% in PAT and growth of 19.53% in Revenue compared to December’21 quarter. High energy, logistics and raw material (fly ash, slag and gypsum) costs are the main reasons for the decline in the profits of the company, reimposition of busy season surcharge on rail freight also adversely affected costs. The composite PMI surging to an 11-year high of 59.4 in Dec-22, at the same time CPI is at 5.72% and is Seeming to head towards 5% on the back of improvement in domestic food supply and fall in global commodity prices. Given the government’s focus on infrastructure growth and the consequent rising demand for urban housing, the cement sector is poised for strong growth in the coming years. The company reported EPS of Rs.113.29 for 9MFY23, and we expect the company to clock in the EPS for FY23 at Rs.151.05


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22      QoQ %          YoY% 9MFY23 9MFY22          YoY%
    Revenue from Operations 15,520.93 13,892.69 12,984.93 11.72% 19.53% 44,577.60 36,831.55 21.03%
    Other Income 126.59 146.26 70.50 -13.45% 79.56% 381.57 415.42 -8.15%
    Total Income 15,647.52 14,038.95 13,055.43 11.46% 19.85% 44,959.17 37,246.97 20.71%
    Costs of Materials 2,262.73 2,004.28 1,715.11 12.89% 31.93% 6,266.17 4,997.23 25.39%
    Purchase of stock-in trade 381.12 325.33 331.41 17.15% 15.00% 1,070.16 790.30 35.41%
    Change in inventory -400.20 -311.95 14.03 28.29% -2952% -792.46 -546.53 45.00%
    Employee expense 694.24 691.21 642.94 0.44% 7.98% 2,022.54 1,907.35 6.04%
    Other Expense 1,894.65 1,977.35 1,728.72 -4.18% 9.60% 5,717.70 4,839.35 18.15%
    Power and Fuel Expense 4,873.13 4,296.13 3,221.43 13.43% 51.27% 13,182.40 8,168.85 61.37%
    Freight and Forwarding Expense 3,479.41 3,043.70 2,911.91 14.32% 19.49% 9,813.73 8,233.40 19.19%
    EBITDA 2,462.44 2,012.90 2,489.88 22.33% -1.10% 7,678.93 8,857.02 -13.30%
    EBITDA Margin (%) 15.87% 14.49% 19.18% 138 bps -331 bps 17.23% 24.05% -682 bps
    Finance Cost 215.25 200.31 182.31 7.46% 18.07% 631.32 738.40 -14.50%
    Depreciation & Amortisation 723.23 707.91 674.19 2.16% 7.27% 2,126.33 2,011.39 5.71%
    Profit /Loss of Associates and JV 3.28 -1.49 0.76 -320.13% 331.58% 2.57 1.33 93.23%
    Profit Before Tax 1,527.24 1,103.19 1,634.14 38.44% -6.54% 4,923.85 6,108.56 -19.39%
    Tax 464.66 344.49 -76.00 34.88% -711.39% 1,520.55 1,388.05 9.55%
    Profit After Tax 1,062.58 758.70 1,710.14 40.05% -37.87% 3,403.30 4,720.51 -27.90%
    PAT Margin (%) 6.85% 5.46% 13.17% 139 bps -632 bps 7.63% 12.82% -519 bps
    EPS (in Rs.) 36.70 26.21 59.22 40.02% -38.03% 117.85 163.81 -28.06%

    Source: Company website, EWL Research

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