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UltraTech Cement, an Aditya Birla Group company, reported 63 per cent increase in September quarter consolidated net profit at Rs 579 crore against Rs 356 crore logged in the corresponding period last year on the back of lower cost and higher realisation.
Net sales were up four per cent at Rs 9,491 crore (Rs 9088 crore).
The company’s board plans to invest Rs 940 crore in increasing grinding capacities at its plants in Bihar and West Bengal by six lakh tonnes per annum each and putting up a new grinding unit of 2.2 million tonnes per annum in Odisha. These projects are expected to be completed between January and March 2021.
Overall expenses were flat at Rs 8,878 crore (Rs 8,868 crore) with lower power and fuel cost of Rs 1,966 crore (Rs 2,265 crore) and flattish freight expense of Rs 2,115 crore (Rs 2,281 crore).
The company has completed acquisition of the cement business of Century Textiles and Industries through a scheme of demerger with effective date of October 1.
Following this, UltraTech has allotted 1.39 crore equity shares to Century Textiles' shareholders as on October 14.
While clearing the company's proposal, NCLT has fixed May 20, 2018 as the applicable date for the acquisition. The company has consolidated Century's accounts with itself from May, 2018.
Overall capacity after the acquisition crossed 100 mtpa per annum to 109 mtpa and UltraTech has emerged world's third largest (excluding China) cement company.
Demand slow down
Extended monsoon and heavy flooding across the country resulted in depressed demand. The situation was more aggravated in eastern and Central parts of India where Century Textiles has manufacturing units. These plants had undertaken annual shut downs impacting operation at these plants.
Annual maintenance undertaken during the quarter pushed up variable cost by three per cent.
The company has completed upgradation and integration of its subsidiary Nathdwara Cement after a major shut down during the quarter. This resulted in higher cost and lower capacity utilisation at the plant. UltraTech Nathdwara generated free cash outflow of Rs 100 crore in the first half of this fiscal. The company expects disposal of non-core assets to further improve its returns.
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