UltraTech Posts Flat Q3;Biz Outlook Challenging

Published: 24th January 2015 06:00 AM  |   Last Updated: 24th January 2015 05:00 AM   |  A+A-

MUMBAI: UltraTech Cement Ltd said its consolidated net profit was marginally changed for the three months ended December 31, 2015 at Rs 400 crore, compared with Rs 395 crore in the year ago period.

The company, a part of the Aditya Birla group, business outlook continues to remain challenging and demand growth in the long term is likely to be around 8 per cent. Net sales rose 14 per cent to Rs 5,835 crore in the quarter to December 31, 2014, from Rs 5,137 crores a year earlier.

Weakness in the infrastructure segment and low urban housing demand impacted overall growth. Weak growth on a low base put a check on revival of growth, the company said.

Cement prices showed a downward trend from the second quarter.

“We are seeing revival in the demand and expect both capacity utilisation and price realisations to further improve in the fourth quarter,’’ said Piyush Jain, Equity Research Analyst, Morningstar India.

“Price hikes taken in the first half of this year was able to offset the seasonal softening of prices in the quarter.’’

The sector witnessed moderate cement demand growth in the quarter in consideration compared with the first half. Over the longer run, key drivers will remain housing and infrastructure spends.

“Long term demand for building materials remains attractive as the Indian government pursues its spending on infrastructure and housing,’’ said Jain from Morningstar.

UltraTech is in the process of acquiring two cement plants from Jaiprakash Associates with an annual capacity of 4.9 tons per annum to increase its capacity to 65 mt from 60 mtpa. UltraTech will issue non-convertible debentures worth Rs 4,538 crore and will also acquire debt of Rs 626.50 crore and negative working capital of Rs 160.50 crore.

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