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UltraTech profit beats Street, surges 22%

Surpassing market expectations, UltraTech Cement, an Aditya Birla Group company, said its profit after tax for the first quarter of the financial year 2011-12 stood at R683 crore compared with R558 crore in the corresponding period of the previous year, an increase of 22%.

Surpassing market expectations, UltraTech Cement, an Aditya Birla Group company, said its profit after tax for the first quarter of the financial year 2011-12 stood at R683 crore compared with R558 crore in the corresponding period of the previous year, an increase of 22%. Net sales stood at R4,365 crore as compared with R3,990 crore in the corresponding period of the previous year, up 9%. The company said it had recast its results to include the numbers of Grasim Industries cement business, which was merged into UltraTech in August 2010, to provide a like-to-like comparison.

The results, therefore, are strictly not comparable with the corresponding period of the previous year. Shares of UltraTech rose 2.79% on the BSE on Wednesday to close at R1,027.95.

The quarter was adversely impacted by the 30% increase in the domestic coal price in March, 2011. Alongside, imported coal price rose by 30% year on year, resulting in a substantial escalation in costs.

The company has a capital outlay of over R11,000 crore to be spent over the next three years. The capex pertain to a number of projects. These include ? clinkerisation plants through brownfield expansion at Chhattisgarh and Karnataka together with additional grinding units; installing waste-heat recovery systems; instituting bulk packaging terminals and setting up of ready-mix concrete plants. Orders have been placed for major equipment for setting up of the projects. These expansions are expected to be operational by Q1FY14 and will enhance the Company?s cement capacity by 9.2 mtpa.These projects will be funded through a judicious mix of internal accruals and borrowings. ?The surplus scenario is likely to continue over the next 2 to 3 years resulting in the selling prices remaining under pressure.

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First published on: 28-07-2011 at 02:01 IST
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