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Our Bureau UltraTech Cement, an Aditya Birla Group company, has reported a 30 per cent fall in June quarter net profit to ₹631 crore, against ₹898 crore in the previous year period, due to a sharp increase in costs and lower realisation.
Net sales were up 27 per cent at ₹8,841 crore (₹6,938 crore). Sales volume jumped 34 per cent 16.8 million tonnes (mt).
Logistics costs, which accounted for 34 per cent of overall expenses, were up 9 per cent at ₹1,199 a tonne while diesel price increased 20 per cent, eating into the company’s profit margin.
Energy cost was up 18 per cent at ₹1,028 a tonne as pet coke prices jumped 35 per cent. The depreciation of the rupee also pushed up the cost of imported pet coke.
Raw material costs
Raw material prices, which account for 14 per cent of overall costs, were up 8 per cent at ₹501 a tonne. Overall, expenses increased 21 per cent to ₹8,186 crore (₹6,767 crore).
Atul Daga, CFO, told BusinessLine the company is improving its overall operational efficiency to beat the cost push even as pet coke prices are expected to remain firm till October. “While we do not have control on crude prices, we have reduced the lead distance between the factory and the sale point by 6 per cent to trim logistics costs,” he said.
The recent government norm allowing trucks to carry 25 per cent more load than before will help bring down costs further, he added.
The recently-acquired 21.2 mtpa cement plants of JP Associates have achieved average capacity utilisation of 70 per cent and cash break-even, Daga further said.
The cement industry is on an uptrend and demand is expected to remain healthy with higher budgetary allocation by the Centre for infrastructure. Rural demand is expected to increase with higher MSP for kharif crop, said the company.
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