UltraTech Cement, one of India’s leading cement manufacturers, has reported a robust performance in the fourth quarter of FY24, with a significant surge in net profit beating estimates. The company announced a 35 percent increase in net profit, reaching Rs 2,258.58 crore in the January-March period, compared to Rs 1,670.10 crore in the same period last year.
UltraTech Cement’s revenue also witnessed a notable uptick, rising by 9.4 percent to Rs 20,418.94 crore. On a sequential basis, revenue increased by 21 percent, while profit surged by 27.3 percent. The company’s board has recommended a dividend of Rs 70 per share of face value of Rs 10 each for FY24.
The cement sector faced challenges at the start of the quarter due to harsh winters in the north and festivities in the south. Additionally, the east region grappled with fiscal constraints, although signs of recovery emerged towards the end of the quarter. Cement prices experienced pressure in Q4FY24 due to rolled-back price hikes amid subdued demand, with most price hikes initiated in September-October being reversed in recent months.
However, despite these challenges, the cement industry benefited from robust demand driven by healthy government spending on infrastructure and increased affordable housing projects. Consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) rose to Rs 4,250 crore from Rs 3,444 crore last year.
According to market analytics firm Crisil, cement volume growth recovered to a healthy 7-8 percent year-on-year, driven by aggressive volume push strategies. UltraTech Cement, in line with industry trends, recently acquired the cement business of the BK Birla Group’s Kesoram Industries in an all-stock deal. This strategic move will provide UltraTech access to two integrated cement manufacturing units in Karnataka and Telangana, with a combined capacity of 10.75 million tonnes per annum.
Analysts anticipate continued consolidation in the cement industry as major players vie for market share. Despite the ongoing competition and pricing pressures, UltraTech Cement’s strong financial performance underscores its resilience and ability to capitalize on growth opportunities in the sector.
