NEW DELHI: UltraTech Cement on Monday reported net profit of Rs 1,710 crore in the December-ended quarter as against Rs 1,585 crore logged in the same period last year on the back of one-time tax write-back of Rs 535 crore.
Analysts were expecting the Aditya Birla company to report profit after tax between Rs 1,200 crore and Rs 1,500 crore for the third quarter. The company’s consolidated net sales came in at Rs 12,710 crore as compared to Rs 12,144 crore over the corresponding period of the previous year.
The company said that after gaining pace in October 2021, demand slowed down substantially in November, 2021 as a result of the construction ban in the NCR, extended monsoons in the south and a few states in the north, sand issues in the eastern region as well as in parts of Uttar Pradesh, and the Diwali holiday season.
Pet coke and international coal prices have started softening during this quarter, though the rates are still at elevated levels YoY, it added.
Ultratech’s board at its meeting on Monday approved capex of Rs 965 crore towards modernisation and expansion of capacity at Birla White from the current 6.5 LTPA to 12.53 LTPA, in a phased manner.
The capacity expansion will help Birla White strengthen its presence in the growing white cement market.
The company said that 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 infra and housing projects.
Bullish build up post Q3 results
Ultratech’s better-than-estimated third-quarter profit spurred the creation of fresh bullish bets by derivatives traders.
The active futures contract saw traders’ outstanding positions, known as open interest (OI), jump 12.7% as the contract’s price rose 3% to Rs 7,902. From the day’s low of Rs 7,512.05, it closed at Rs 7,902.
The underlying stock is just 5% away from its 52-week high of Rs 8,269 on NSE and analysts expect it to test the 52-week high on Tuesday or Wednesday.
Monday’s price action enabled the stock to close above a key 200-day simple moving average of Rs 7,597.69, 100 SMA at Rs 7,646.37 and even the 50 and 20 SMAs, as per HDFC Securities’ data. This makes the outlook for the stock bullish.