Ultratech Cement Q2FY18: Higher interest, depreciation drag bottomline

Ultratech Cement reported weak results for the quarter ended September 30, 2017 on Wednesday. Total sales for Q2FY18 came in at Rs. 6,936 crore. This represents a 12.5 per cent sequential decline and 6.6 per cent YoY increase. 

Operating profit (EBIT) for the recently concluded quarter amounted to Rs. 872.9 crore and the EBIT margin stood at 13 per cent.

The company reported PAT of Rs. 424 crore which represents a sequential QoQ decline of 52.8 per cent and a YoY decline of 31 per cent. Increased depreciation and higher interest cost relating to the acquired cement plants of JP Associates (21.2 MTPA) resulted in a decline in net profit.

This being the first quarter of operations post-acquisition, the company has injected the much-needed working capital. The company expects government spending on infrastructure, rural and affordable housing will be the key demand drivers.

UltraTech Cement is the largest manufacturer of grey cement, ready-mix concrete (RMC) and white cement in India. It is also one of the leading cement producers globally. With the acquisition of JPA and JCCL, its total cement capacity has reached 93 MTPA.

On Wednesday, the stock opened at Rs. 4,096.90 and touched an intra-day high and low of Rs. 4,180 and Rs. 4,053, respectively, on the BSE.