India: UltraTech’s profits rise to US$109m for 1Q16

UltraTech Cement’s quarterly earnings statement for 1Q2016 show consolidated net profit growth of 10 per cent reaching INR7.23bn (US$109m) for the year to March, according to a report in Mint. Capacity utilisation was also higher in 1Q2016, rising by five per cent to 84 per cent.

Volume sales rose by 15 per cent YoY, but revenues increased more slowly – by five per cent – due to declining prices. UltraTech’s EBITDA grew by just three per cent YoY despite improvements in cost efficiencies. Mint notes that energy costs and road freight rates are exerting downward pressure on profits, while prices are not rising in line with increased demand.

Mint quotes Motilal Oswal Securities as saying that while there was an increase in prices in parts of north and central India during the March quarter, prices declined in the south and the east.

UltraTech has said that it expected cement demand to grow 7-8 per cent in the current fiscal year.