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UltraTech Cement Q3 results | Profit rises to Rs 1,708 crore, beats estimates, revenue grows to Rs 12,985… –

UltraTech Cement Limited, India’s largest cement manufacturer, on January 17 exceeded expectations and reported a consolidated profit after tax (PAT) of Rs 1,708 crore for the quarter ended December 2021, up 7.8 percent from Rs 1,584 crore in the year-ago period. PAT during the previous quarter was Rs 1,314 crore.

“During the quarter, trade sales were impacted more than non-trade sales, as overall cement demand remained subdued. With the onset of the peak season and rising construction activities, cement demand is expected to revive in Q4FY22, driven by a pick-up in the government-led infrastructure and housing projects. Rural and urban demand is also expected to pick up going forward which augur well for the Company”, the company said in its release.


Consolidated revenue (including operating income) met expectations and came in higher by 6 percent at Rs 12,985 crore against Rs 12,254 crore in December 2020 quarter and Rs 12,017 crore in the previous three-month period.

Revenues, net of taxes and excluding operating income were higher by 4.7 percent at Rs 12,710 crore compared to Rs 12,144 crore in the same quarter of last year.

Operating income for the quarter was Rs 275 crore, higher by 133 percent.

Grey cement business generated revenues of Rs 10,629 crore during the current quarter, up 3 percent YoY. White Cement reveues improved by 1 percent on-year to Rs 543 crore, revenues from export and others improved 5 percent YoY to Rs 316 crore while grey cement revenues from overseas business were higher by 13 percent YoY to Rs 593 crore.

The company added 42 new RMC (Ready mix Concrete) plants during the quarter, taking the total plants that produce RMC to 151. This helped in improving the revenues from this business by 17 percent on year to Rs 668 crore.

Volume & realization

The company registered consolidated volume of 23.3 MT (million tonnes) which was down 3 percent on-year. Grey cement volumes at 21.43 MT were down 3 percent YoY, white cement volumes were up 5 percent at 0.41 MT. Export volumes were impacted the most and were down 45 percent at 0.16 MT while overseas business volumes were down 9 percent at 1.24 MT.

While there was a year-on-year decline in volumes, they improved marginally on a sequential basis. Unseasonal rainfall, sand crisis in a few markets of Uttar Pradesh and in East India and a ban on construction activities in the Delhi–National Capital Region hit volumes.

Rural and infrastructure demand in North India registered growth. Demand from infrastructure segment in Central India was down due to near completion of major projects but rural housing witnessed a growth.

Demand for both rural and infrastructure segment was impacted in the Eastern region due to unseasonal rains and festivities.

Mumbai continues to witness strong traction in housing segment while growth in rural housing was strong in all regions of Maharashtra. Gujarat however, lagged behind due to unavailability of labor and panchayat elections.

Cyclonic rains in South India impacted demand from both the housing as well as infrastructure sector except for Andhra Pradesh.

The company was able to improve its blended realizations by 7 percent on year to Rs 5,527/ton which was marginally higher than street’s expectations. This was aided by increase in premium product mix which contributed 15.5 percent of trade volumes and was up 1.1 percent from last year.

Also read: UltraTech Q3 results preview | Weak demand, higher input cost may result in steep decline in margins and profitability


The three main cost components of Raw Material, Energy and Logistics costs jumped higher due to higher prices of coal as well as petcoke and the freight cost due to rising oil prices.

The raw materials cost which constitute 13 percent of the total cost bill, increased by 7 percent on-year to Rs 538/ton due increase in flyash, gypsum and HSD prices. This rise was partly negated by improved operational efficiencies as the company was able to improve clinker to cement conversion ratio by ~1 percent.

Energy costs, constituting 32 percent of total costs, were most impacted and increased steeply by 39 percent YoY to Rs 1,327/ton. On sequential basis, the increase in energy costs was 21 percent.

The average fuel consumption cost for the company during this quarter was at USD 151/ton compared to USD 67/ton in the same period last year.

The impact was cushioned by reduction in power consumption by ~2 percent and by increasing the contribution of green power which stood at 15.6 percent.

The logistics costs constitute 30 percent of total costs and were up 4 percent YoY to Rs 1,229/ton, severely impacted by ~24 percent rise in diesel prices. This was partially mitigated by improved efficiency and favorable rail-road mix. On quarter basis, the logistics costs were up by 1 percent.

Other costs which include packing cost were up 20 percent on year due to 24 percent increase in packing costs while there was improvement in other components. On sequential basis, the other cost was down 4 percent due to higher QoQ volumes.


The higher costs of goods sold impacted the margins significantly as EBITDA (earnings before interest, tax, depreciation amortization) margins came in at 20 percent compared to 28 percent in the corresponding quarter of last year.

EBITDA in absolute terms was down 26 percent on year from Rs 3,362 crore to Rs 2,490 crore.

Net Debt and ratios

The company was able to reduce its net debt by ~8 percent during the nine months of current financial year. Its net debt as at the end of December, 2o21 stood at Rs 6,147 crore basis which the net debt to EBITDA ratio improved from 0.55 at the end of March, 2021 to 0.49 currently.

“During the quarter the Company repaid loans amounting to Rs 3,459 crores. The repayments were funded through internal accruals and have reduced the Company’s exposure to floating interest rate”, said the management of the company.

Return on Capital Employed (ROCE) moved up to 16.1 percent in the current quarter from 15.3 percent on trailing 12 months basis.

Return on Equity (ROE) was down marginally from 15.6 percent to 15.1 percent on trailing 12 months basis.

The investors responded to the strong performance by the company as the stock closed at Rs. 7,870, up Rs. 209.6 from its previous day’s close at the National Stock Exchange on January 17. It has generated returns of 44.4 percent during past one year and 7.3 percent during the last one month.