UltraTech Cement Q3 results preview: UltraTech Cement, the country’s largest cement manufacturer, will today report its financial performance for the quarter ending December 2024.
Industrial Dynamics
Cement prices in the country, which started to rise in July-August, although moderated after the start of the festive season in November. However, for the quarter, the All-India average Cement prices per 50 Kg bag at ₹370 were higher compared to ₹357 in the previous quarter and ₹359 in the previous fourth year.
The quarter also saw some moderation in crude costs. Although demand in certain pockets and regions saw a temporary impact due to state elections, job availability in festive season, rains and floods in the South India, and construction bans in Delhi NCR and some other regions to curb pollution. Overall demand trend in the country remains strong and expected to accelerate.
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There are the best realizations. Lower costs are likely to support earnings for Cement manufacturers such as UltraTech.
Q3 result Expectations
UltraTech has already announced its volume growth numbers. The Sales volume in the domestic markets for UltraTech during the quarter at 26.06 9 million tons) grew 5% year on year and 2% consecutively. Consolidated sales volume for UltraTech (including overseas) at 27.32 grew 6% year over year and 2% sequentially.
Analysts at Motilal Oswal Financial Services estimate blended realization to increase 3% year-on-year and sequentially as well.
Hence the net incomes around ₹16810 Crores is estimated to increase 8.3% year on year. Ready Mixed Concrete (RMC) revenue is expected to increase 26% YoY and white cement revenue is expected to grow 18% YoY.
With raw material costs coming down, the operation is likely to get a further boost. Variable cost per tonne is expected to decrease 10% per year (4% sequentially). They expect Operating Expenses per ton to decrease 4% YoY and (3% sequentially for UltraTech.
No wonder MOFSL expects Ebitda (earnings before interest tax depreciation and amortization) to grow 45% YoY and Operating margins to increase 5 percentage points YoY to 20%.
The Ebitda per ton is estimated to reach ₹1,236 vs ₹903 in the year before quarter and ₹956 in the previous quarter.
MOFSL sets net profits for UltraTech ₹1910 Crores rising 80.9% year on year.
Elara Securities India Pvt Ltd pegs net profit growth of 60% for UltraTech.
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Kotak Institutional Equities factors in volumes at 26.1 million tonnes (up 5.7% indeed and 1.5% sequentially) for UltraTech during the quarter with strong growth in October 2023 offset by weakness in November 2023. They estimate mixed realizations to rise 3% sequentially (up) . 2.1% yoy) due to price increases during the beginning of the quarter.
Kotak estimates costs per tonne for UltraTech to decline by 1.3% sequentially (3.1% year on year) led by lower energy fuel costs, operating leverage partially offset by higher freight costs on a sequential basis. They estimate that Ebitda per tonne will increase to Rs1,200 a tonne (up 32% year-on-year and 26% sequentially) mainly driven by higher prices.
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Published: 19 Jan 2024, 11:08 IST