UltraTech - January 2019

UltraTech has posted a 19 per cent YoY increase in its net sales in 3QFY19 with consolidated sales coming in at INR92,580m (US$1.29bn), compared to INR77,790m in 3QFY18. Over the same period, profits before interest, depreciation and tax advanced by almost four per cent from INR14,940m to INR15,480m. Meanwhile, net profit came in at INR3940m, versus INR4560m in 3QFY18.

Over the 3QFY19, the company saw its domestic sales volume advance by 15 per cent YoY. However, higher fuel and energy costs, along with rupee depreciation, resulted in an 11 per cent YoY jump in overall costs. Interest expenses were also higher due to the loans raised to acquire Binani Cement Ltd in November 2018, which has now been renamed UltraTech Nathswara Cement Ltd (UNCL). This acquisition has not only given UltraTech access to high-quality limestone reserves in the north and west of India, it has also enhanced the company’s cement capacity in the northern region to 24Mta.

The company is already seeing an uptick in cement demand as the Indian government steps up its investment in infrastructure and affordable housing prior to a general election this year. According to Mumbai-based brokerage Motilal Oswal, Indian cement producers could see demand grow by four per cent with housing completions forecast to hit 4.3m each year in 2019-23. Housing currently accounts for up to 65 per cent of cement demand in the country, while infrastructure contributes a further 30 per cent.