UltraTech Cement Ltd is likely to report a 20-27 percent decline in its consolidated profit after tax (PAT) on July 22 when it will share its numbers for the June 2022 quarter.
UltraTech Cement’s consolidated revenue, however, is expected to grow 20-25 percent from the June quarter of 2021, a poll of brokerages that Moneycontrol got access to, shows.
The Aditya Birla Group flagship company is expected to report a consolidated PAT of Rs 1,280–1,370 crore for the reported quarter, while revenue is expected to improve to Rs 14,200–14,700 crore, the poll shows.
On a sequential basis, analysts expect the company to report a subdued performance due to moderation in demand from the real estate over rising input costs. Sequentially, the consolidated PAT is seen declining 45-50 percent, as revenue is likely to be lower by 7-10 percent.
The company reported a consolidated PAT of Rs 1,700 crore in the year-ago quarter and achieved a revenue of Rs 11,830 crore.
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During the January-March period, the cement maker reported a consolidated PAT of Rs 2,454 crore and revenue of Rs 15,767 crore.
Brokerage Views
Volume & Realisation
Brokerages expect healthy growth in cement volumes over the low base of the previous year, while sequentially, volumes will be lower due to a decline in demand from the real estate sector, which was impacted by higher commodity prices in the previous quarter.
The blended realisations are seen moving upwards, both on yearly as well as sequential basis due to the numerous price hikes affected by the company to absorb the rising operating costs.
Motilal Oswal Financial Services expects “sales volumes to rise by 12 percent YoY on a 36 percent and 12 percent increase in white and grey cement volumes respectively”. It expects total volumes of 24.15 metric ton (MT) for the quarter.
It expects the average blended realisation at Rs 5,992 a tonne, which will be an improvement of 9.1 percent on year and 5.2 percent over the previous quarter.
Motilal Oswal expects the consolidated revenues to increase 22.3 percent to Rs 14,471 crore from the year-ago quarter.
Phillip Capital, on the other hand, sees volumes growing by 13 percent on year, and decline 12 percent from the previous quarter. It sees blended realisations improve by 6 percent on year and by 2 percent on QoQ basis, with expected consolidated revenue of Rs 14,200 crore.
Costs & margins
The April-June period was marred by higher prices of coal, pet coke and crude, which inflated the input costs for the sector and the company.
Motilal Oswal expects the variable costs per ton to surge by 47 percent year on year, while freight costs could increase by 2 percent. Other expenses are likely to jump 5 percent a ton, while employee costs are likely to dip 2 percent on a yearly basis.
Earnings before interest, tax, depreciation and amortisation (EBITDA) per ton are expected at “Rs 1,148 v/s Rs 1,536 YoY and Rs 1,110 QoQ”, Motilal Oswal said in the report.
Phillip Capital estimates EBITDA to be slightly lower at Rs 1,069 a ton, a decline of 30 percent on year and 4 percent on quarter.
“We estimate cement EBITDA/ton to decline to Rs1,045/ton (-9 percent QoQ, -34 percent YoY) led by higher variable costs, partially offset by higher realizations”, a report from Kotak Institutional Equities said.
At 1.59 pm, UltraTech was trading at 6,045.90 on the National Stock Exchange, down 0.71 percent. The stock has declined 18.2 percent over the past year but gained of 12 percent over the month.
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