UltraTech Cement, India's largest cement maker, has beaten estimates for a consecutive quarter. Higher realisations, coupled with better demand, helped the company counter the impact of rising input costs in the third quarter.
The Aditya Birla group company posted a whopping 93.4 per cent rise in net profit at Rs 617 crore during the quarter, compared with a net profit of Rs 319 crore in the year-ago period. The brokerages' consensus estimates of the company's profitability was about Rs 450 crore in December quarter. Net sales rose 23 per cent to Rs 4,572 crore from Rs 3,715 crore in the year-ago period.
The company's shares rallied 6.33 per cent in the last eight trading sessions. On Friday, shares closed at Rs 1,211.20 on the Bombay Stock Exchange. Foreign institutional investors raised their stake in the company to 16.10 per cent as on December 31.
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Chief financial officer K C Birla told Business Standard, "The northern and western markets did well during the period, in terms of demand and prices. These regions take care of 65 per cent of our sales. We got a major boost from states like Gujarat and Maharashtra." Gujarat reported a growth of 30 per cent in cement dispatches, while Punjab and Rajasthan reported double-digit growth.
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The company's net realisation stood at Rs 3,900 a tonne, a rise of 17 per cent over the same period last year. "The variable costs increased by 16 per cent," Birla said.
"Demand is likely to grow around eight per cent. However, the surplus scenario is likely to continue over the next three years....Growing input costs will result in a squeeze in margins," the company said.