UltraTech Cement Q2 net flat on higher input cost

Our Bureau Mumbai | Updated on October 18, 2021

Revenue from operations was up 16 per cent

UltraTech Cement, an Aditya Birla Group company, reported that its net profit for the September quarter was almost flat at ₹1,310 crore, largely due to higher production cost.

Revenue from operations was up 16 per cent at ₹12,017 crore (₹10,387 crore). Overall expenses jumped 17 per cent to ₹10,209 crore (₹8,724 crore). Production volume was up 8 per cent at 21.64 million tonne.

Power and fuel cost increased 37 per cent to ₹2,520 crore (₹1,845 crore) while freight cost was up 16 per cent at ₹2,673 crore (₹2,300 crore).

Coal and pet coke prices nearly doubled pushing up energy cost by 17 per cent to ₹1,099 a tonne while logistics cost increased 7 per cent to ₹1,219 a tonne. Raw material prices were up three per cent at ₹518 a tonne.

The resulting impact on the company’s operations was partially offset by a reduction in power consumption and continuing focus on operational efficiencies, UltraTech said in a statement. The company expects to commence mining operations at its Bicharpur coal block in Madhya Pradesh in the December quarter which will help reduce coal purchase from the open market, it added.

The company has commissioned 12MW of Waste Heat Recovery System and 21 MW of solar power. With this expansion, the company’s green energy share has gone up to 15 per cent.

UltraTech has added fresh cement production capacity of 1.2 mtpa in October as part of first phase of the 19.5 mtpa capacity expansion announced last December.

Patliputra Cement Works in Bihar and Dankuni Cement Works in West Bengal have added 0.6 mtpa of capacity each taking their overall production capacity to 2.5 mtpa and 2.2 mtpa, respectively. UltraTech’s domestic cement manufacturing capacity has now increased to 112.55 mtpa.

The company expects steady increase in input costs such as coal, pet coke and diesel to pose a challenge for the industry.

UltraTech is confident of weathering the rising operational cost by improving efficiency and increasing the selling prices.

The recovery in rural housing, higher minimum support price for Kharif crop, a third consecutive normal monsoon, and pick-up in infrastructure-led construction activity will drive cement demand, it added.

Published on October 18, 2021

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