UltraTech Registers Domestic Volume Growth of 9.6% YoY

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UltraTech Cement Limited announced its Q2FY23 financial results. The company has reported robust earnings for Q2FY23 in a seasonally weak quarter for the cement industry. Consolidated Net Sales were at Rs. 13596 Cr. Profit before interest, depreciation and tax was at Rs. 2013 Cr.

Some of the key highlights are - Domestic sales volume grew 9.6% on a year-on-year basis.   Achieved capacity utilisation of 76% as against 71% during Q2 FY22. Energy costs increased 58% YoY and raw material costs rose 18%. Commenced 5 MW of WHRS capacity during the quarter. Green power now contributes 19% of the total power requirement.

UltraTech commissioned 1.3 mtpa brownfield capacity in the 2nd quarter. It is poised to add another 15.4 mtpa greenfield/brownfield capacity in H2FY23 and start the new financial year with a capacity of 131.25 mtpa in India. Work on the second phase of growth of 22.6 mtpa announced during the quarter has already commenced. Commercial production from these new capacities is expected to go on stream in a phased manner, by FY25.

Upon completion of the latest round of expansion, UltraTech’s capacity will grow to 159.25 mtpa, reinforcing its position as the third largest cement company in the world, outside of China. UltraTech believes demand revival is imminent, especially during the festive season and the peak construction period in January-March.

Demand was low during July and August 2022, showing some sign of revival in September 2022. Pick-up in retail demand was on the back of pent-up demand accumulation during the monsoons, pre-Diwali construction and repair work gaining momentum, and pre-election tailwinds. Institutional demand was led by increased construction activity after the receding monsoons.

Consolidated net sales were Rs.13,596 crores vis-à-vis Rs.11,743 crores over the corresponding period of the previous year. Profit before interest, depreciation, and tax was Rs.2,013 crores compared to Rs.2,855 crores. Profit before tax was Rs.1,103 crores and profit after tax was Rs. 756 crores compared to Rs. 1,947 crores and Rs.1,314 crores, respectively.

Energy costs increased 58% and the raw material cost rose 18%, YoY.  UltraTech achieved capacity utilisation of 76% as against 71% during Q2FY22. Domestic sales volume grew 9.6% on a year-on-year basis, despite heavy monsoons throughout the quarter.

In line with its continuing endeavor towards enhancing environment conservation measures, it commenced 5 MW of WHRS capacity during the quarter. Green power now contributes 19% of the total power requirement. This is expected to increase to 36% by the end of FY25. 

UltraTech has been granted Environmental Product Declaration (EPD) certificates for four of its cement products – Ordinary Portland cement (OPC), Portland pozzolana cement (PPC), Portland slag cement (PSC), and Portland composite cement (PCC). An EPD is a clear and objective report that explains the materials used to make a product and how that product impacts the environment throughout its entire life cycle. Real facts and measurements are provided, enabling consumers to understand a product's environmental impact and sustainable features. 

The Company’s first phase of growth launched in December 2020 is on track and estimated to be completed by the end of FY23. During the quarter, the Company commissioned 1.3 mtpa brownfield capacity at Dalla, Uttar Pradesh, taking the total capacity in India to 115.85 mtpa and 121.25 mtpa globally. In the second half of this year, the Company will commission another 15.4 mtpa of greenfield/brownfield expansion and start the next financial year with a capacity of 131.25 mtpa in India.

Work on the second phase of growth of 22.6 mtpa announced during the first quarter has already commenced. Main plant orders have been placed and civil work started at some sites. Commercial production from these new capacities is expected to go on stream in a phased manner, by FY25. 

Upon completion of the latest round of expansion, the Company’s capacity will grow to 159.25 mtpa, reinforcing its position as the third largest cement company in the world, outside of China. 

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