UltraTech 3Q hurt by subdued demand, higher freight costs
India’s largest cement manufacturer UltraTech Cement reported a 2.6 per cent fall in net profit for the third quarter of the current fiscal as a slowdown in construction activity continued and the company was hit by higher freight costs.
For the October-December period of FY12-13, UltraTech reported a net profit of INR6.01bn (US$111.7m), down from INR6.17bn a year ago. The company said domestic sales of grey and white cement were subdued at 9.62Mt and 2.62Mt, respectively.
Freight and forwarding expenses rose 12.3 per cent to INR10.59bn. The company said higher railway freight and the recent hike in diesel prices impacted its raw material and logistic costs.
UltraTech is currently in the process of raising capacity with plans including additional clinker plants in the central state of Chhattisgarh and southern state of Karnataka together with additional grinding units. These are expected to be operational from early FY14 and consequently, the company’s cement capacity will be enhanced by 9.2Mta.