UltraTech Cement, an Aditya Birla Group company, reported a 31 per cent drop in net profit in the September quarter to ₹423 crore against ₹614 crore due to one-time investment in 21 million tonne per annum (mtpa) newly acquired JP Cement plants and higher depreciation.

Net sales increased 20 per cent to ₹6,840 crore against ₹5,708 crore in the same period last year.

Depreciation increased 56 per cent to ₹522 crore against ₹334 crore. Interest cost during the quarter almost doubled to ₹388 crore (₹150 crore) due to cost involving new cement plant acquisition.

The company's production capacity has gone up to 93 mtpa with addition of fresh capacity.

The acquisition will enhance the company’s footprint into high growth markets such as central India, Himachal Pradesh, eastern UP and coastal Andhra Pradesh where it has been focussing to increase its presence, said UltraTech Cement in a statement.

This being the first quarter of operations post-acquisition, the company has injected the much-needed working capital to improve and stabilise the quality of cement being manufactured at these plants. Towards this, initial one-time expenses were undertaken for improving efficiencies and plant maintenance, it said.

In parallel, new dealers have been appointed to penetrate into new markets and completed transition of the acquired cement plants to the ‘UltraTech’ brand, it said.

The company plans to invest ₹194 crore to put up a wall care putty plant of 4 lakh tonne to cater to the rising demand. The plant is expected to be commissioned in the second-half of FY-20.

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