Result Analysis:  Ultratech Cement Ltd. Result Update Q3FY22


Particulars (In Rs. Cr.) Q3FY22 Q2FY22 Q3FY21 QoQ % YoY%
Revenue from Operations 12985 12017 12262 8.06% 5.90%
Other Income 70.5 140 260 -49.69% -72.89%
Total Income 13055.4 12156.9 12522.0 7.39% 4.26%
Raw Material Consumed 1715.11 1731.36 1669.24 -0.94% 2.75%
Raw Material as % of Sales 13.21% 14.41% 13.61% (120) bps (40) bps
Stock Adjustment 14.9 -216.9 -125.0 -106.88% -111.95%
Purchase of finished Goods 331.4 215.5 250.2 53.82% 32.46%
Employee Benefit Expenses 642.9 679.5 610.2 -5.38% 5.36%
Power and fuel 3221.4 2520.0 2401.9 27.83% 34.12%
Power and fuel as % Sales 24.8% 21.0% 19.6% 384 bps 522 bps
Freight and forwarding Expenses 2904.8 2673.3 2848.5 8.66% 1.98%
Freight and for. Exp. As % of Sales 22.4% 22.2% 23.2% 12 bps (86) bps
Other Expenses 1735.8 1699.3 1504.8 2.15% 15.36%
EBITDA 2418 2715 3102 -10.91% -22.04%
Finance Cost 182.31 229.98 356.27 -20.73% -48.83%
Depreciation 674.19 677.4 673.91 -0.47% 0.04%
Tax -76 637.14 747.4 -111.93% -110.17%
Profit After Tax 1710.14 1310.34 1584.58 30.51% 7.92%
EBITDA Margin 18.63% 22.59% 25.30% (397) bps (667) bps
PAT Margin 13.10% 10.78% 12.65% 232 bps 44 bps

Result Highlights:


  • Recorded 13.2% growth in its domestic cement sales volumes in the nine months ended December.

  • Volume of the company are down 3% YoY in Q3F vs Estimates of 4-6% decline. On QoQ basis Volumes up 7% .

  • Consolidated revenue of Ultratech Cement grew 5.9% YoY and 8% QoQ to Rs. 12985 Crore beats the Estimates of Rs. 12625 Crore. Profit after Tax too beats the estimates on lower tax.

  • Tax was lower during the December quarter of FY22 as the company reversed accumulated provision for tax amounting to Rs. 323 Crore and accrued Minimum alternate tax credit entitlement of Rs. 212 Crore

  • EBITDA Margin declined from 22.59% in Q2FY22 to 18.6% in Q3FY22 mainly due to higher power and fuel cost.

  • Power and fuel cost per tonne increased 39% YoY to Rs. 1327

  • During the quarter the Company repaid loans amounting to Rs 3,459 crores. The repayments were funded through internal accruals and have reduced the Company’s exposure to floating interest rate.

  • Net Debt to EBITDA ratio improved from 0.55 at end of March, 2021 to 0.49 at the end December, 2021

  • Commissioned 19 MW of WHRS and 53 MW of solar power. With this expansion the Company’s green energy share has gone up to 16% which includes 156MW of WHRS and 221MW of solar power.

  • Approved capex of Rs. 965 crores towards modernisation and expansion of capacity at Birla White from the current 6.5 LTPA to 12.53 LTPA, in a phased manner. The incremental capacity will be operational in a phased manner. The capacity expansion will help Birla White strengthen its presence in the growing white cement market, reducing its dependence on high-cost imports.

  • The Company commissioned Line II of the Bara Grinding Unit in Uttar Pradesh, having cement capacity of 2 mtpa. Line I was earlier commissioned in January 2020 and is already operating at a capacity utilisation of more than 80%. This additional capacity will help UltraTech to service the fastgrowing cement demand in the Central region of India. With this expansion, during the financial year 2021-22, the Company has commissioned 3.2 mtpa new cement capacity, as planned, taking its total cement manufacturing capacity in India to 114.55 mtpa

Management Commentary

  • Don’t expect fuel cost to surprise in Q4; but remain at elevated levels.
  • Receding fuel cost pressures to start reflecting on books from Q1 FY23.
  • Higher crude prices could keep the cost pressures elevated for the industry.
  • Undertaken price hike for January.
  • Price hike undertaken in October were rolled back.
  • Capacity utilization was at 75% for December quarter.
  • East, south zone and select parts of Maharashtra and Kerala have seen price hikes.


Ultratech Cement has been able to maintain a strong growth trajectory in domestic market with the growth 13.2% growth in its domestic cement sales volumes in the nine months ended December, 2021, despite a marginal degrowth in the reported quarter. However, the company’s margins are under pressure due to the fuel cost and rollback prices in October.  With the onset of the peak season and rising construction activities, cement demand is expected to revive in Q4FY22, driven by a pick-up in the government-led infrastructure and housing projects. Rural and urban demand is also expected to pick up going forward. All of this augur well for the Company. Ultratech’s plan to add 20 MT capacities over the next 2-3 years in high-growth markets of East, Central and North would likely ensure faster ramp-up and higher volume growth. At the CMP of Rs. 7870, Ultratech Cement is trading at PE multiple of 34.9x.  Valuing the company at 32.2x FY23E EPS, we recommend buy on Ultratech at CMP of Rs. 7870 for the Target Price of Rs.8530.

Source: BSE, Bloomberg Quint, EW Research

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