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Below the Views on UltraTech Cement Q4 FY24 Result by Parth Shah, Research Analyst, StoxBox

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UltraTech Cement showed robust profit growth owing to operating efficiency kicking in and lower energy costs, despite pricing pressure in the industry. Grey cement and white cement volumes recorded double digit growth amid robust demand environment. Lower power and fuel cost due to lower pet coke and coal prices offset the declining realisations. The quarter did not see sustained prices hikes which lead to pricing pressure and lower realisations. Going forward, the blackout out period due to election is expected to result in further price wars as companies try to sell-off inventory. During the quarter, strong growth was seen in north and central regions owing to growth in rural housing and ongoing government infrastructure. The company has planned for Rs. 9,500 crores capex for the next financial year, inline with its goal reaching 183.5 MTPA capacity by FY27. With market leadership and pan-India presence, we believe that the company is better placed than its peers to withstand the current headwinds and should be the first to recover once the tide turns, especially post-monsoon.

UltraTech Cement Ltd. – Q4FY24 Result First Cut – Performance beats estimates; Robust profit growth owing to operating efficiency and lower input costs

* UltraTech Cement reported revenue of Rs. 20,419 crores, up 21.9% QoQ / 9.4% YoY, led by continued demand for building materials and decreasing operating costs.

* Domestic sales volume saw a growth of 30% QoQ / 11% YoY which stood at 33.91 MT. The company achieved good volume growth in domestic sales of grey cement and white cement. The consolidated sales volume stood at 35.08 MT.

* Domestic sales of grey cement saw a growth of 11% YoY, owing to robust demand environment.

* Company’s EBITDA grew 25% QoQ / 23% YoY to Rs. 4,250 crores due to lower input costs and increase in demand. Ultratech Cement recorded an EBITDA/tonne of Rs. 1,185 for its domestic operations, down 1.9% QoQ / up 10.5% YoY.

* PAT increased 27% QoQ / 35% YoY to Rs. 2,259 crores which is the highest ever quarterly PAT and beat consensus estimates of around Rs. 2,000 crs.

* Energy power and fuel expenses stood at Rs. 1,420/tonne which were down by 16% YoY and 3.8% QoQ. The reduction in costs can be attributed to lower coal and pet coke consumption and efficiency improvement during the quarter.

* Logistics costs remained largely flat and did not show any movement on a quarterly basis. The lead time also remained flat at 400 kms in Q4FY24.

* Raw material cost declined 4.75% QoQ but remained flat on yearly basis.

* Other costs were up 4% YoY,  owing to higher brand building and CSR expenses. However, it decreased significantly on a sequential basis by 24% as operating benefit kicked in and seasonally low plant maintenance.

* The company commissioned additional grey cement capacity for 7.8 MTPA, taking the total domestic capacity to 140.8 MTPA.

* The board has recommended a dividend of Rs. 70 per equity share.

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