UltraTech Q2 preview: Up to 100% growth in profit likely; sales may see single digit rise

Analysts said cement makers may show volume growth in the seasonally weak quarter on pent up demand after the phase-wise opening up of the economy, with some estimates pegging industry-wide growth at 3 per cent YoY and 33 per cent sequentially. Pr...

Agencies
The year-on-year numbers may not be comparable as the company acquired the cement business of Century Textiles and Industries effective October 1, 2019.
NEW DELHI: UltraTech Cement is all set to report up to 100 per cent growth in profit for the September quarter.

Analysts said cement makers may show volume growth in the seasonally weak quarter on pent up demand after the phase-wise opening up of the economy, with some estimates pegging industry-wide growth at 3 per cent YoY and 33 per cent sequentially. Prices, on the other hand, remained 3 per cent higher YoY on a pan-India basis at Rs 358 per bag, even as they fell 3-5 per cent sequentially due to seasonality, analysts said.

As per Motilal Oswal Securities, UltraTech may report a 104 per cent rise in profit at Rs 1,181.40 crore. This would be a sequential growth of 30.4 per cent. Sales are expected to rise merely 3.5 per cent year-on-year to Rs 9,956.20 crore. It sees volumes for Ultratech to rise 3.9 per cent YoY to 19.4 million tonne, realisations falling Rs 18 per cent to Rs 5,129 per tonne while Ebitda per tonne rising Rs 287 to Rs 1,314.


"Sales volume should rise 6 per cent YoY. Blended realisation is likely to remain flat YoY. Grey cement realisation is expected to improve 0.8 per cent YoY. Ready mix concrete (RMC) revenue is expected to decline 25 per cent YoY. We expect 10 per cent YoY growth in white cement revenue," Emkay Global said.

This brokerage expects a 97.40 per cent rise in net profit at Rs 1,157.70 crore on a 5.8 per cent rise in sales at Rs 1,01,740 crore. Ebitda margin is seen rising 367 basis points YoY to 23.6 per cent from 19.9 per cent in the year-ago quarter. Ebitda margin stood at 27.2 per cent in the June quarter.

The year-on-year numbers may not be comparable as the company acquired the cement business of Century Textiles and Industries effective October 1, 2019.
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Sharekhan pegs UltraTech's profit at Rs 1,037 crore, up 62.2 per cent YoY.

"Cement volumes are expected to grow 7 per cent YoY at 19 million tonnes. Due to lower costs, Ebitda per tonne is expected to improve by 16 per cent to Rs 1,090," Prabhudas Lilladher said, while expecting 55 per cent rise in profit at Rs 991 crore.
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