The largest cement maker Ultratech Cement has reported a flattish net income at Rs 1,695 crore for the June quarter, even though revenue rose about 2 percent to Rs 18,069 crore, sending its shares tanking.
The company in a statement Friday attributed the poor set of numbers to the general elections, labour shortages due to election-related migration, extreme heatwaves and the economic slowdown in a few states hitting cement demand during the quarter.
The numbers declared during the market hours saw the counter tanking 3.22 percent at Rs 11,272.50 while the broader market shed 1 percent ahead of the budget next Tuesday.
Grey cement sales dropped by 9 percent to 30.29 million tonne sequentially, while it rose by 6 percent on-year.
Sluggish cement demand also impacted prices during the quarter, it said which led cement makers to mostly roll back price hikes that they had undertaken at the beginning of April. That impact was felt in the sales realisations for the quarter, which declined by 5.7 percent to Rs 5,045 per tonne.
The AV Birla group firm's operating margin for the reporting quarter was 17 percent, flat on-year, and lower than the 20 percent reported in the previous quarter.
The bottom line was flat despite a decline in key cost components including power, fuel and logistics. Total expenses for the quarter were Rs 16,128.37 crore, lower on a sequential basis, while being higher year-on-year.
Power and fuel expenses were at Rs 4,493.74 crore, lower than Rs 4,881.20 crore reported in the year ago period, with prices of coal and imported petcoke being on a declining trend since the end of 2023.
Logistics costs, the largest cost component for cement manufacturers, were almost flat at Rs 4,181.29 crore as against Rs 4,100.79 crore a year ago.