UltraTech Cement has reported a 11 per cent drop in net profit in the September quarter at ₹376 crore against ₹424 crore logged in the same period last year, on the back of a sharp increase in operational cost.

Net sales were up 20 per cent at ₹8,111 crore (₹6,752 crore) over the previous year. Domestic sales volume jumped 21 per cent.

Rising energy and logistics cost coupled with rupee depreciation pushed up operational expenses by 14 per cent, pulling down profits despite higher sales volume, said the Aditya Birla Group company in a statement on Friday.

With no respite from high energy prices and rupee depreciation in sight, the company may continue to face pressure and will not be able to pass on the cost increase to customers. Supply is expected to continue to outstrip demand some time, said an analyst.

The Scheme of Arrangement to merge the cement business of Century Textiles and Industries is awaiting approval from shareholders, the National Company Law Tribunal and other regulatory authorities. It has been cleared by stock exchanges and Competition Commission of India.

Following approvals, UltraTech Cement will issue one equity share for every eight held by Century Textiles shareholders.

Century will demerge its cement business consisting of three integrated cement units in Madhya Pradesh, Chhattisgarh and Maharashtra and a grinding unit in West Bengal and merge it with Ultratech. This will take, UltraTech Cement’s capacity to 111.1 mtpa.

Having integrated 21.2 mtpa of JP Cement capacity acquired last July, UltraTech proposes to invest in Waste Heat Recovery Systems at these plants, said the company.

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