UltraTech Cement increased by 7% in Q11 on good operational results

The company reported a consolidated EBITDA of Rs 2,353 crore, as against an average analyst estimate of Rs 1,702 crore

UltraTech Cement increased by 7% in Q11 on good operational results

Shares of UltraTech Cement moved higher by 7 percent to Rs 4,136 on the BSE on Tuesday after the company reported better-than-expected operational performance in the April-June quarter of FY21 (Q1FY21).

The company reported a consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs 2,353 crore, as against an average analyst estimate of Rs 1,702 crore. Ebitda margins improved to 31 percent from 27 percent in the previous year quarter. A volume decline of 22 percent year on year (YoY) at 14.65 MT was also better than analyst estimates of around 34 percent.

“The 'overheads control program' initiated by the management helped to cut fixed costs by 21 percent YoY. Prudent working capital management and control on cash flows are reflected in a reduction of net debt by Rs 2,209 crore during Q1FY21,” Ultratech Cement said in a press release.

In the available 68 operating days during this quarter, the Company kept tight control on costs and cash flow, and achieved effective capacity utilization of 60 percent across its network of 54 plants around the country, it said.

The company’s consolidated net sales were at Rs 7,563 crore against Rs 11,229 crore over the corresponding period of the previous year. The normalized Profit after tax was Rs 906 crore compared to Rs 1,281 crore in the corresponding period of the previous year.

Analysts on an average had expected net sales of Rs 7,478 crore and net profit of Rs 507 crore for the quarter.

“During 1QFY21, cement Industry surprised positively both on volumes and realizations front (in the background of a pandemic). The volume growth trend in the monsoon quarter would be key to determine how FY21 may shape up. Prices were robust in 1QFY21 vs. 4QFY20. If the positive (or even a flattish) demand growth trends sustain during monsoons, there is a possibility of upgrades to our FY21 estimates,” Antique stock broking said in quarterly preview report.

Source: Business Standard

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